Strength

A big 4 accounting firm with leadership positions in other domains

DTTL's is among the Big 4 accounting firms. Being a Big 4 accounting firm, the group is exposed to a
large client base and these companies enjoy a dominant position in the market. Further, the auditing
contracts are generally long term, and the switching of auditors is very uncommon. These factors
indicate that being a large company, DTTL is exposed to recurring stream of revenues which provides
stability and a sustainable competitive advantage. The group also enjoys industry recognition across
its other practices. In September 2021, the company won 26 awards across 30 jurisdictions at the
International Tax Review (ITR) 2021 EMEA Tax Awards. In August 2021, the company was named a
leader in 2021 Gartner Magic Quadrant for Public Cloud IT Transformation Services. Such strong
market position and recognition provides the group a competitive advantage over its peers and
enhances its brand image.

Multifunctional organization with presence across several geographies

DTTL's competitive advantages lie in the fact that the group has wide reach in terms of service
portfolio and geographies. The group's portfolio of offerings includes consulting, audit, tax and legal,
risk advisory and financial advisory. Over the last few years, the group has strategically expanded its
presence in several end markets to increase revenue stability and expand its opportunities for
growth. It enjoys a strong presence in high growth developing and emerging markets. The group has
a strong global position, with its base in mature markets such as the Americas and Europe. It has also
expanded significantly in emerging markets such as India, China, and other emerging Asian markets.
In FY2021, the Americas accounted for 50% of the group's revenue, followed by Europe/Middle
East/Africa with 33.1%; and Asia Pacific with 16.9%. Owing to its depth in service offerings, verticals
and geographies, DTTL is one of the few auditing firms that have the capabilities to offer multi-
functional solutions. Multifunctional solutions refer to the group's ability to integrate all its services
to deliver high value-added services. Some of the group's multifunctional solutions include Deloitte
Analytics, Finance Transformation, Governance, Risk and Compliance, International Financial
Reporting Standards (IFRS), and Mergers & Acquisitions. Similarly, the group's geographical
capabilities also can be tapped to cater to global clients. DTTL's portfolio of offerings and
geographical footprint provides it with the unique advantage of its ability to offer integrated services
which will enable it to enhance revenue generated per customer.

Diversified customer base reduces dependence on any one market

DTTL has a diversified customer base. The group serves clients in more than 150 countries across the
world through its member firms. It provides services to a wide range of customers in a variety of
industries and customer segments, including financial services which accounted for 26.4% of the
group's revenue in FY2021; followed by consumer products (20.7%); energy, resources, and
industrials (14.9%); technology, media, and telecommunications (11.9%); government and public
services (16.7%); and life sciences and health care (9.4%). A diversified customer portfolio reduces
dependence on any one market, which in turn diversifies the group's business risks.

Weakness
Lawsuit and litigations decrease consumer confidence
DTTL is a defendant in a number of legal proceedings. In March 2021, the company faced litigation
on characterization of payments for purchase of shrink-wrapped software/off the shelf software at
the Delhi High Court (DHC). In September 2020, the company was sued by its dormer employee
charging it with violations of the Family Medical Leave Act in connection in its maternity leave policy.
Such lawsuits may damage the company’s brand image and decrease consumer confidence.

Opportunity
Strategic acquisitions offer a strong growth opportunity

Strategic acquisitions offer a strong growth opportunity for DTTL, especially while foraying into new
markets or launching new products or services. In August 2021, the company acquired PDS Group,
an advisory firm. The acquisition would enable the company to meet the demand for advisory and
project management services. In June 2021, the company acquired Aptys Consulting, an SAP Ariba
consulting and implementation partner. The acquisition will reinforce the company’s position in the
SAP market through the addition of a new Center of Excellence SAP Ariba. In May 2021, the
company announced the acquisition of Life Science Consultancy business from Iperion Life Sciences.
The acquisition will strengthen the company’s life sciences consulting offerings. In February 2021,
the company acquired Focus IT, which provides boutique services. The acquisition will strengthen
Oracle consulting capabilities across Southeast Asia. In January 2021, the company acquired
HashedIn Technologies Private Limited, a cloud native software engineering and product
development firm. The acquisition will strengthen DTTL’s cloud technology services.

Strategic agreements to foster growth opportunities

DTTL entered into various strategic agreements to foster growth opportunities. In October 2021, the
company partnered with Vodafone to launch Vodafone Centre for Health. This virtual center will
bring together Vodafone's connected health solutions with Deloitte's healthcare consulting
experience. In the same month, the company partnered with UpLink on Impact Report. In August
2021, the company signed an original equipment manufacturer (OEM) agreement with SAP to
launch SAP Customer Experience Offerings on Hux Platform. The new offerings will enable a
streamlined purchase process and accelerated implementation for clients. In March 2021, the
company partnered with NVIDIA to launch the Deloitte Center for AI Computing. The center is
designed to accelerate the development of innovative artificial intelligence (AI) solutions for Deloitte
clients. In the same month, Deloitte was selected by ASC for their digital transformation program.

Increase in demand for consultancy services in US

The outlook for management and marketing consultancy services is robust globally. According to
inhouse research, the management and marketing consultancy market in the US recorded
US$166,420.7 million in 2020 and is expected to reach US$212,418.9 billion in 2025, representing a
CAGR of 5% during 2020-25 period. Consulting is a key strategic division for DTTL. The company is
looking to enhance the contribution of the high growth advisory services segment to the overall
revenues. Rising demand for management and marketing consultancy services could help the
company in effectively expanding its advisory services.

Threat
Increased scrutiny
After the Andersen's infringement, accounting firms are being subject to amplified scrutiny, and are
potentially at risk from any allegations, which may have a more immediate impact upon business
than was the case in a pre-Enron environment. Enron and WorldCom collapsed in the two biggest
bankruptcies in the US history, and the respective audit firms played important role in the fraud. The
government increased scrutiny of the reports and audits after the collapse. This prompted the
introduction of Sarbanes Oxley Act to govern audit, provide management reports on internal
controls over financial reporting and have outside auditors issue formal opinions on those reports.
Further, Internal Revenue Service (IRS) may take steps that will limit service offerings. The IRS has
singled out various companies for their tax sheltering strategies (by way of which they allegedly
misreported clients' financials to minimize their tax obligations). Moreover, in the recent times,
Anglo Irish Bank, Satyam Computers, and Lehman Brothers accounting scandals negatively impacted
investor confidence on Big 4 auditing firms, including DTTL. The increased scrutiny as a result of rise
in accounting scandals can adversely affect the company's business in the coming years.

Competitive pressure

DTTL operates in a highly competitive industry. The group faces competition from large players such
as Ernst & Young International, McKinsey & Company, PricewaterhouseCoopers, KPMG, Grant
Thornton, and Ryan, LLC. It also competes with management consulting firms in the strategy
implementation and system integration services. The management consulting environment has seen
a propagation of competitors since the 1990s, many formed through divestments with major
financial service firms, particularly accountancy firms. This growth in the number of competitors has
put pressure on the operating environment. These could affect the company’s business due to the
expertise in a particular field and their lower cost proposition. Increase in the demand for different
types of accounting and auditing services in near future may exert considerable pricing pressures on
bigger firms.

Regulatory obligations

DTTL’s businesses are subject to national and local governments and supervisory regulations in both
the UK and non-UK regions, in which the company operates. The company has to comply with
relevant independence, legal, ethical, regulatory or professional requirements. Its earnings could be
affected by the restrictions on transferring funds out of the country and change in the rules in
competition. The change in government policies and regulations could affect the company’s growth
and expansion strategies