Student Number: 08009949


Module Code: BUSM3401

Accenture Strategy 2010
Analysis of the Branding/Corporate Identity Strategy
Student Number: 08009949 12/15/2010

Executive Summery - Accenture is a global management consulting, technology services and outsourcing company. Committed to delivering innovation, Accenture collaborates with its clients to help them become high-performance businesses and governments. With deep industry and business process expertise, broad global resources and a proven track record, Accenture can mobilize the right people, skills and technologies to help clients improve their performance. IBM due to their long standing within the technological market has taken leadership of the market, whilst Mckinsey & Co s heritage depicts their strategy to compete on traditional values within the management consulting sector. The recession has introduced new competitors into the market in the form of Infosys Technology, who are targeting the price conscious business owner via outsourcing initiatives.
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............ .......... 3 2.................................................... . .......... ........... ....... ............. .......... 2 1... ............. 1 Section I ± Current Competitive Position .............Competing with Infosys Technologies via outsourcing initiatives ........... .............................................................. 2 Section II .......................... ......................................1 Competing with Mckinsey & Co¶s µtraditional¶ values..............................2 Competing with Infosys Technologies on price .................................................. 7 Section III ± Obtaining Competitive Advantage through Corporate Identity.......... 11 Reference List ..........................2................2 Measuring Brand Personality ..........3 Measuring Brand Equity .. ........ 8 3.............................1 Competing with IBM ..........................................Student Number: 08009949 Module Code: BUSM3401 Contents Contents .... 5 2....................... ................................................ ............................................................................. . .. ...... .............................................. 8 3..................................................... 6 2.......... ...................... ...... ... ............1 ± Potential Market Entrants ± (Barriers to entry) ...................... 3 2............................................................ .... 10 Evaluation ......................... 10 Glossary .......Obtaining Competitive Advantage through Branding.........................................................................2 ........ 12 1|P age .... .......... ....................................

in the longrun. Accenture is a company in a market that due to the current economic downturn has resulted in their market share decreasing (Hale. Due to the economic downturn. 2|P age .Student Number: 08009949 Module Code: BUSM3401 Accenture is known for its global scale and strong implementation competency (Kaikati.1 ± Potential Market Entrants ± (Barriers to entry) Accenture¶s competitive position can be determined through Porter¶s. (2009) suggests that the IT market is monopolistic and therefore has low barriers to entry and high growth demonstrated by Accenture¶s ability to become the third largest IT vendor in 2009 with only a 2. Hale. However. buyers are hesitant in committing to long term requirements of outsourcing contracts (Hale. (1985) µCompetitive analysis model¶ specifically the µBarriers to entry¶ segment.9% market share worth $23. other firms will enter the market and the benefits of differentiation decrease with competition. 2009). this paper will explicate as to how branding and corporate identity can be enhanced in order to construct a level of competitive advantage within the market that Accenture resides. Accenture¶s image was achieved through a successful corporate identity (CI)/branding campaign that followed arbitration from Anderson Consulting (AC) (Kaikati. This large amount of capital that Accenture commands reduces the ability for new companies to compete on the same level. the impact of these within the global market and explicate as to mechanisms that will protect the brand. Therefore. In order to ascertain the current position of Accenture the BCG Matrix is used to determine the balance of the business in terms of the relationship between market share and market growth (David. 2009). in the short run Accenture have been able to utilise its market power to generate profit. However.7 billion. grew less than forecasted even though the µpotential cost savings from outsourcing usually keeps this market segment buoyant¶ (Hale. with the low entry barriers. 2009). evaluate the impact of these corporate identity and brand management initiatives. Therefore. Section I Current Competitive Position 1. 1999). (2009) states that µIT and process management¶ segments. 2008). the market therefore evolves into perfect competition where firms cannot gain economic profit. Hale. 2009).

1 Competing with IBM Murphy. 2002). Section II . According to Hale. process. specifically its µGlobal services business unit¶. This includes increased labour. unlike perfect competition.¶ which was a central dimension of Accenture¶s rebranding/repositioning after arbitration. 1997). such as the size in IBM¶s scale of operations.¶ This definition concentrates on the organisation¶s internal environment to create intangible assets that create a distinctive image in the client¶s mind-set (Murphy. 2008). equipment. thus increasing their reach over the market.¶ µindustry knowledge¶ and µuniquely creative. 3|P age . the firm maintains its level of capacity allowing Accenture to differentiate on their economy of scale. Accenture¶s current outsourcing substitution competitor. Accenture competes with IBM. (1997) defines the characteristics of branding as being the µperceived functional and emotional benefits. plants. (2008) IBM leads Accenture by a substantial margin in terms of revenue. Kaikati. By being the market leader IBM can influence the market prices in accordance with their own strategy. re-usable assets¶ (Kaikati. Accenture competes with µtraditional¶ strategic consulting groups like McKinsey & Co (Hale.Student Number: 08009949 Module Code: BUSM3401 However. 2009) encapsulated the functional values of Accenture.Obtaining Competitive Advantage through Branding 2. India based Infosys Technologies (INFY). Economies of scale are the advantages of large scale production that result in a lower cost per unit (Turner. which transmitted to clients a perceived market position. µtechnology infused capabilities. (2009) refers to Accenture¶s internal structure as its core µcompetency. µDepersonalised knowledge¶ such as. profitability and economies of scale. Strategy. In-line with the characteristics of a monopolistic market. The low barriers to entry have resulted in an increased level of competition from overseas within the outsourcing sector. and technology. Within the technological services sector. skills and technology at their disposal. Accenture has a degree of control over price and can use this to demonstrate points of difference. Within Management Consulting. change management. has created points of parity against Accenture by their ability to obtain labour at a reduced cost. were the organisational business processes that Accenture used to increase its knowledge base among its stakeholders.

Resourceful will be obtained through Accenture¶s ability to create a joint enterprise with a market leader in the software/hardware sector. Accenture¶s merger with overseas brands will increase its existing assets and capacity thus increasing their economy of scale more in line with that of IBM increasing their CA. inventive. Accenture¶s ability to compete with market leader IBM. software developers. 4|P age . Kaikati (2009) suggests that Accenture lacks technical expertise which hampers its market position and. Therefore. High-Tec. Expertise. In order to increase the level of the perceived market position that Accenture holds in line with that of IBM. Accenture will transmit µdepersonalised¶ values such as expertise. 2002). the customer¶s mindset must develop a cognitive persuasion to those values that encompass Accenture as inventive.Student Number: 08009949 Module Code: BUSM3401 However. This can be obtained by creating initiatives within their services catalogue to demonstrate points of differences between Accenture and IBM. Accenture can incur values from where they were formulated (Turner. By creating a joint enterprise with another global brand within the software/hardware industry. This combination of skills will allow Accenture to establish points of parity with technology firms such as IBM and prevent technological complications emanating from internal/external sources. knowledge. High-Tec and modern. Whereas inventive. knowledge and creative will enhance the current µdepersonalised¶ values that Accenture transmit to the customer. by partnering with industry leaders. by increasing the level of µdepersonalised¶ knowledge within the customers¶ mindset and position the organisation further in-line with IBM¶s capabilities. High-Tec and modern will be deferred from the merging with a market leader whose values can demonstrate that it is up-to-date with market and technological trends. whilst simultaneously achieving differentiation. resourceful. a developer situated in china can accommodate for values of tradition and innovation thus allowing Accenture to cater for different cultures and needs within the global market thus strengthening their global position and competitive advantage. in turn. resourceful and modern will enhance the brand equity as these values will be deferred onto Accenture and increase Accenture¶s CA over IBM. Therefore. creative. To increase its competitive advantage (CA) Accenture can use its knowledge/experience in management consulting/strategy to supplement its weakness regarding technical skills by partnering with leading hardware.

This will tarnish Accenture¶s perceived market position and impact on market share/position. a need which has arisen from the downturn. al. However.Competing with Infosys Technologies via outsourcing initiatives Outsourcing services to foreign organisations allows organisations to meet the demands of the price conscious customer. 5|P age . As a consulting firm. the USA market sustains growth by demanding a higher expenditure on resources and as the law of the USA demands. 2000). which will in turn. diminishing the competitive advantage that the merger with a developer had obtained and therefore Accenture¶s ability to compete with IBM will be impeded. Given Accenture¶s focus on technology. which is situated in a comparatively mature market to India (Bickerton. resulting in a mindset that suggests Accenture does not have the capabilities to devise initiatives to aid the technological expansion of customer businesses. Therefore. with the volatile nature of IT and the increasing level of competitors within the market. This would show they were not able to demonstrate a µcreative¶ method of retaining their position. 2000).Student Number: 08009949 Module Code: BUSM3401 However. therefore the low cost of resources translates into low cost for customers (Melewar et. a developing country. 2000). allowing Infosys to compete on price. 2000). what could be seen as a method of protecting the brand could result in the brand damaging the values that Accenture transmits. Accenture's most important resource is its workforce. 2. the demand for labour has driven costs up. has yet to integrate (Melewar et.e. 2003). Accenture have emphasised the growth of its labour force in India in order to maintain its competitive advantage (Accenture. the internal structure. with the increasing level of companies outsourcing to India. businesses must abide by laws that are in the interest of fairness that India. the ability of the developer to maintain a leading position may be in jeopardy. al. something Accenture would benefit from due to it being based in the USA. This keeps costs relatively low in comparison with a country that has high inflation and taxes. For instance the minimum wage is lower than that of the USA. This would demonstrate that their µindustry knowledge¶ is limited and their µtechnology infused capabilities¶ were not in line with that of the changing market conditions. and would therefore result in a decrease of resource costs. In order to compete with the low cost that outsourcing to India holds. therefore. and thus negatively impacting on the customers¶ mindset and Accenture¶s core competency i. Therefore. its success is dependent on its ability to hire and retain technically skilled individuals.2 . boost profit margins (Bickerton.

they reflect the large CA of Indian firms. Accenture has increased its reach over the global market and its ability to compete within (Douglas. (2001) defined branding as a µholistic company or organisational brand¶. stakeholder personas evolve into µbillboards¶. In order to command a higher price Accenture need to increase their level of brand equity which adds to the value of the brand. Such companies offer similar services at extremely competitive prices. the average cost per employee at INFY is $34.2 Competing with Infosys Technologies on price By outsourcing to India.000. Accenture faces growing competition from offshore service providers whose revenues have grown upwards of 30% a year (Wood.2. For example. These firms compete with Accenture by outsourcing and systems integration areas.Student Number: 08009949 Module Code: BUSM3401 In addition. The decrease in margins will affect the profitability of the business and detract from the µdepersonalised¶ knowledge transmitted by the Accenture brand. and put pressure on Accenture¶s margins. 1999). While these numbers are skewed by Accenture's upper level management in the United States (Wood. This can be achieved by a consistent communication strategy that increases the level of brand equity. Therefore in order to obtain/retain skills of a workforce Accenture must demonstrate points of parity and position the brand in such a way that justifies a level of commitment. demonstrate to stakeholders a consistent communication strategy. may impede there expansion by demonstrating a lack of clarity with the vision of Accenture. The channels in which Accenture choose to distribute their services through oversees in order to protect the brand from being out performed on price. while Accenture has an average employee cost of $110. 1999). 2001). This definition stresses the need for consistent communication (Douglas. increasing the global visibility of Accenture¶s vision and purpose among stakeholders. and therefore hamper their global communication strategy. in turn. This will allow Accenture to obtain/retain workforces that relate to the µdepersonalised¶ values. Douglas. 2001).000 (Wood. and its core values. Therefore in order to justify the higher price Accenture need to integrate initiatives to create points of difference from INFY. 2. This will result in an increase of brand equity by manipulating levels of cognitive awareness/understanding thus. the economic growth of India has increased salary inflation which will hamper Accenture's ability to continue its rapid expansion. 6|P age . and. 1999).

consumers may feel that it would be socially unacceptable or undesirable to express their true feelings (Van Riel. These values encompass values of quality. by investing in a low cost strategy and differentiation. it may be difficult for consumers to admit that the Accenture brand name has prestige and enhances their firm¶s image. which detracts from the quality value and thus detracts from the brand equity. This is in-line with Bowman¶s strategy clock model. consumers may instead refer to some particular product feature as the reason why they like or dislike the brand (Van Riel. Accenture¶s µdepersonalised¶ values create attributes within the services that they offer. Bowman¶s strategy clock model is a way of analysing a company¶s position in comparison to the offerings of competitors (Murphy. As a result. The hybrid strategy allows Accenture to achieve differentiation within the saturated market at a price lower than its competitors. 2. 1997). For either of these reasons. 1997). Alternatively. For example. 1997). (Murphy. 7|P age . In the case of Accenture this requires a strategy that focuses on design of services/low cost. which affects the perceived global position of the firm and therefore resulting in Accenture being unable to justify their CA and. 1997). their ability to command a higher price for services. Under certain situations.Student Number: 08009949 Module Code: BUSM3401 This can be achieved through Porter¶s (1985) generic strategy and specifically the differentiation framework.3 Measuring Brand Equity In order to evaluate the brand equity Accenture can assess the consumers' brand knowledge by profiling their customer base. this enables Accenture to establish methods of CA. by outsourcing to India this depicts that there current workforce in the USA is not adept enough to handle operations. However. they may demonstrate stereotypical answers that they believe would be acceptable or expected by the interviewer (Van Riel. which is the development of a product or service that offers unique attributes and that customers perceive to have added value than a competitors. As a result. 1997). an accurate portrayal of brand knowledge structures may be impossible without implementing the unconventional research method of projective techniques (Van Riel. 1997). 1997). in turn. namely the hybrid model. it may be that consumers find it difficult to identify and express their true feelings when asked directly (Van Riel. thus creating a CA. however by outsourcing the workforce to India it allows Accenture to compete on price.

Within Management Consulting. Thus. The use of metaphorical imagery that assigns human characteristics to an organisation allows Accenture to develop a µpersonality¶ and. in order to aid the differentiation and positioning process Accenture should demonstrate characteristics that personify the organisation as innovative. smart.1997). 1997).Student Number: 08009949 Module Code: BUSM3401 Projective techniques are diagnostic tools to uncover the true opinions and feelings of consumers when they are unwilling or otherwise unable to express themselves on these matters (Van Riel. projective techniques can be especially useful when personal motivations or personally or socially sensitive subject matters may be operating (Van Riel. The µsoul¶ consists of the subjective elements such as the values (Balmer & Soenen. are the prerequisites required to meet management objectives (Van Riel et. Balmer & Soenen. the argument is that consumers will reveal some of their true beliefs and feelings (Van Riel. (1997) definition of CI presupposes that organisations follow a set structure. 1997). Therefore. Accenture competes with µtraditional¶ strategic consulting groups like McKinsey & Co (Hale. The µtraditional¶ value that this brand transmits. something that Accenture as a comparatively young organisation cannot compete with. collaborative and passionate (Krauss. communication and symbolism. al. such as Accenture transmits. established an µorganic¶ composition of CI composed of the mind. Projective techniques provide insights into the relationship between the consumers and the brand. 2008). Section III Obtaining Competitive Advantage through Corporate Identity 3. soul and voice. 1998) that an organisation. The idea behind projective techniques is that consumers are presented with an incomplete stimulus and asked to complete it or given an ambiguous stimulus that may not make sense in and of itself and are asked to make sense of it (Van Riel. 2009). al. means that CI becomes integral to the corporate strategy. 1997).1 Competing with Mckinsey & Co¶s µtraditional¶ values Van Riel et. In doing so. 1997). however. 8|P age . (1998). by focusing on characteristics that exemplify the organisation as an autonomous being. demonstrates a heritage and knowledge of the sector. this is based on the premise that organisations behaviour.

1998). 9|P age . (Krauss. 2009). Mckinsey µtraditional¶ values depicts that they are likely to have to a centralised structure and a hierarchy that does not accommodate for µfree-thinking¶. Accenture can retain the passionate trait from its previous positioning. According to Balmer & Soenen. something that a µtraditional¶ characteristic does not transmit. To ensure the success of the branding initiative to retain/obtain employees Accenture can use the passionate trait to encourage employees to ³live¶ the positioning and bring it to life¶. The µgreater than¶ sign (Kaikati. and therefore would not be able to accommodate for the dynamic global environment thus benefiting Accenture¶s CA. thus aiding the globalisation and its ability to gain CA over Mckinsey through its workforce and retain consistent communication through its employees. This differentiates Accenture from the µtraditional¶ values exhumed by Mckinsey by demonstrating that they have the capabilities to foresee future global market trends. and that any changes would be slow to integrate. Accenture differentiated itself by accentuating the name with a distinct visual symbol (Kaikati. (1998) the µmind¶ consists of an organisation¶s managerial vision/strategy.Student Number: 08009949 Module Code: BUSM3401 The smart value will arise from Accenture thought leadership and ability to rapidly develop and execute strategies and collaborative due to its partnerships with clients and the manner in which Accenture shares its knowledge and expertise. The µvoice¶ is the symbolism used within corporate communication (Balmer & Soenen. 2009). 2009) emphasised Accenture¶s vision to point the way forward and exceed client¶s expectations. The managerial vision for Accenture will be to differentiate itself from Mckinsey and within the managing consulting market (Kaikati. as it remains driven to help clients succeed and embrace challenges. 2009).

however depict the suitability of the relationship metaphor: µunder which circumstances does a consumer±brand relationship exist?¶ They suggest that close relationships are unlikely to exist between all consumers and all brands. Also some brands are naturally more suited for a relationship than others. Passionate attachment refers to the integration of the brand within the stakeholder¶s mindset. Accenture¶s consonance is apparent through their commitment to implement strategic options that are in-line with competitors. 2004. The intimacy facet refers to the psychological closeness between the relationship partners and the knowledge about the brand.. part of the self image.Student Number: 08009949 Module Code: BUSM3401 3.2 Measuring Brand Personality In order to assess the brand personality of Accenture. 2009). and refers to the question whether there is continuity between the stakeholder and the brand. however. Evaluation In order to evaluate the performance and competitive position of Accenture Remult. which depicts that the repositioning is not congruent with Accenture¶s business processes. Personal commitment means loyalty to the brand in terms of faithfulness and willingness to make small sacrifices. thus. for instance because of the importance of the brand to the consumer (Dowling. Accenture are consistent with their efforts to increasingly develop initiatives to strengthen the repositioning of Accenture. constituting to a trend in operations. et al¶s (1994) model for µEvaluating Strategic Options¶ will be used. Fournier (1999) model of Brand Relationship Quality (BRQ). because close relationships are special and therefore rare. O'Malley and Tynan (2001). its diagnostic value for strategic decision-making in this case is limited. 10 | P a g e . Accenture has yet to gain significant market share (Krauss. 2002) or because of the personalities of the consumer and the brand (Aaker et al. will indicate the strength and depth of the person±brand relationship. Consequently. The feasibility of Accenture gaining a significant market share is low at present. Self-concept connection reflects the extent to which the brand is part of the self. with the increasing number of competitors within the market and with IBM¶s substantial lead over the competition and with the global economy in a fragile state Accenture do not have time to implement extensive repositioning initiatives.

(INFY) Competitive Advantage ± (CA) 11 | P a g e .Student Number: 08009949 Module Code: BUSM3401 Glossary Infosys Technologies .

Mick D. NJ: Prentice-Hall. 12 | P a g e .accenture. Dowling G. Balmer. New York: McGraw 0/Accenture_Forrester_MandA_Capabilities. 2004 When good brands do bad. Journal of Consumer Research. Upper Saddle River. R. 2009. S.. Brasel B. pp. often less is more. Accenture Provides Truly Integrated M&A Services. Available at http://www. European Journal of Accenture. Corporate reputation versus corporate branding: the realist debate¶.htm [15/12/10] Hale.. Strategic management: Concepts (7th Ed.G. 2008.16. 5 (1) pp. Murphy. J.87±104.10] Melewar & Saunders.09. Journal of Consumer research. J. Fournier.C. p. The Handbook of Strategic Public Relations & Integrated Communications. 2000 Global corporate visual identity: using an extended marketing mix. Bickerton. D. Lessons from Accenture¶s 3Rs: rebranding.. 42±48. [online].10].. 282. Corporate Communications.. 44(3) pp.Student Number: 08009949 Module Code: BUSM3401 Reference List Aaker J. J E. and Soenen. 1997.).. Marketing and Communications in the Management Consulting Industry. 2000. Rediscovering on [17. 1999.10] Krauss. (1999). A new approach to corporate identity [20. restructuring and Repositioning. Journal of Management Strategies. J. 2003. T.pdf [18.09. Available at http://newsroom.L. International Centre for Corporate Identity Studies.. Backed By Strong Industry Expertise. and Saunders. [Online]. 35 (8). 2002 Customer relationship management: in B2C markets. Fournier S. European Journal of Marketing. Accenture Selects Tiger Woods To Launch High Performance Business Strategy. 31 (1) p.. F.computerweekly. [Online]. Inc. 254-301.09. HP and Accenture suffer most as IT services spend declines.1insaat. 43(5) p. G.. 34 (5/6) pp. David. [Online] Available at http://www. G. Available at http://www. 538±550. 2009. D. 1998.

E. Tynan C. 13 | P a g e . Competitive Advantage. E. D. Journal of Interact Marketing. 2(3) pp. Fundamental issues in strategy: A research agenda. & Teece.. 240±6. S. 1994.Student Number: 08009949 Module Code: BUSM3401 O'Malley L. New York: Free Press Remult. M. P. Schendel. London: McGraw Hill. MA: Harvard Press Turner. Porter. Boston. J.. (2002) Tools for success: a manager¶s guide. 2001 Reframing relationship marketing for consumer markets. R.. 1985. D.

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