Price Waterhouse Coopers Supply Side Report
I need this report to be edited and about 1000 words added on.
The maximum word limit is 2200 words. (Not including title page and references).
Most of the information provided is correct but can be re-worded/edited.
i will upload documents for your reference. REFER TO POWERPOINT SLIDES in regards to what to include.
Progress Report/Information Report.
Each member will be allocated a phase of the Marketing Project and will provide a progress report on that particular phase.
The assignment acts as a progress report of the final project to demonstrate understanding of the relevant Phase of the Group Marketing Project and as such detailed feedback will be provided by tutors.
You are required to complete an analysis of the marketing strategy of our Client Partner – Price Waterhouse Coopers, focusing on the particular marketing issue (what does PWC look like in 2-5 years?) related to the organisation. Blue Ocean Strategy (BOS) will be applied to the marketing issue and the framework provided by BOS used to formulate a marketing solution supported by other marketing concepts and analytical tools.
The analysis must demonstrate:
(a) understanding of the predominant marketing systems in the Client Partner industry
(b) the potential to develop ‘blue-ocean’ strategies for the Client Partner
(c) application of the analysis to the Client Partner.
Report Phase 3 – Supply Conditions and Intermediaries, Environment and Observers
Supply Conditions including for example:
• What are the conditions for supplying the product? Number, type, size and location of direct and indirect competitors supplying the product or service (including both domestic based and international import suppliers) i.e. What are the supplier alternatives?
• What is the concentration or lack of concentration of ownership and trends in supply. Use Supplier Power analysis from Porter’s 5 Forces.
• Nature of value creation and delivery system linking producers and consumers for this type of product or service (including channels of distribution, key input suppliers, key complimentors and other relevant intermediaries that impact on the cost of the product)
• Government actors involved and their role
• Environmental Impacts on Supply – contraints and enablers: Including, socio-cultural, economic and material environment, regulations, technology, and relevant infrastructure (transport, communication, finance etc)
• Any marketing models or frameworks applied to the supply conditions you consider appropriate.
• Use appropriate Blue Ocean Strategy theory and models to evaluate the supply conditions. (See Appendix 3 for Model and Chapter Table)
Intermediaries, Environment and Observers
• Nature of Intermediaries (e.g. distributors, transportation, logistics, warehousing, retailers) predominant in the industry and their role.
• Industry Observers Outside the Firm and Service Organisations and their influence/role such as: Industry Studies, Unions, Business Press (BRW), Local Org. Chambers of Commerce, State Governments, Federal Government, Domestic Trade Bodies/Statistics and International Organisations, e.g. OECD; World Bank, etc. Service organisations such as trade associations, investment banks, consultants, advertising agencies, etc
Suppliers and Intermediaries
(Supply Side) Other Marketing Frameworks
– Relevant macro level impacts on industry competition (PESTL)
– Porter’s 5 Forces: Supplier Power
– Porter’s Value Chain
Price Waterhouse Coopers Supply Side Report
In this paper, I propose an analysis of the marketing strategy of Price Waterhouse Coopers (PwC) that focuses on the particular marketing issue – that is, what PwC would like in the next 2 to 5 years – related to the organization. The supply conditions, intermediaries, the environment and observers are analyzed exhaustively. PESTL and Porter’s Supplier Power are described pertaining to PwC’s supply side. The Blue Ocean Strategy (BOS) will be employed to the marketing issue and the framework provided by BOS used in formulating a marketing solution supported by other concepts and analytical tools.
1.0 Supply Conditions and Intermediaries, Environment and Observers
PwC is an international professional services network, and it is currently the second largest professional services network in the world as measured by its revenues of the year 2014. Along with Ernst & Young, KPMG, and Deloitte, PwC is one of the Big 4 auditors worldwide (PwC 2014). With regard to the conditions for supplying the service – auditing, tax, advisory, and consulting services –, the main competitors to PwC include KPMG, Deloitte, and Ernst & Young. Out of four biggest auditors in the world, Deloitte is the largest. In the year 2012, the world revenue of Deloitte was $32.4 billion; PwC had aggregated gross revenues of $32.09 billion; Ernst & Young had combined revenue of $25.83 billion; and in the fourth place was KPMG with worldwide revenue of $23.42 billion (Saito & Takeda 2014, p. 205).
Deloitte, KPMG, and Ernst & Young are each a network of firms, and they are managed and owned independently. They have entered into accords with other member companies in the network to share common quality standards, brand and name. Each of these networks has created an entity for co-coordinating the network’s activities. In most instances, these 3 major competitors to PwC have member firms in countries all over the world. Deloitte, KPMG, and Ernst & Young have separate legal entities in India, Europe, Americas, Africa, the Middle East, as well as the Asia-Pacific region in countries such as Japan and Australia. (Strahler 2013, p. 19). As such, Deloitte, KPMG, and Ernst & Young are the main direct competitors to PwC not only nationally in Australia, but also internationally. Besides these three main competitors, PwC also faces direct competition from many small auditing firms nationally and this impacts on PwC’s financial bottom-line.
Effectual value creation and delivery is marketing that PwC requires considering highly towards achieving the set 2-5 years development policy. For a lengthy period of time there has existed a disconnection between ways in which PwC creates services value along with ways in which the consumers receive the same value. The company needs to bridge the gap between value creations through a number of strategies: firstly, PwC must ensure the attainment of the brand promise at all times, that is, matching the marketing slogans to the firm’s service delivery (Voima & Grönroos, 2011. Secondly, the proposition price, this regards what the consumers have to pay to acquire the service. Thus, PwC should ensure that the service provided is equal if not better than the pay: this is an effectual marketing strategy.
The 4P marketing strategy is an additional aspect that PwC requires to adopt, that is product, promotion, place and price. Certainly, 4P marketing has been able to impact positively when used along with other marketing methods. PwC by recognizing the information asymmetry within the value creation channel will enable it market its services in an efficient manner. Giving the consumer value for their money must remain core to the firm’s marketing policies: this is because consumers are known to be best in comparing notes, ultimately promoting the best services provider between the many (Voima & Grönroos, 2011. Additionally, PwC must move with the evolving marketing strategies work towards adopting and investing heavily internet advertising. Internet advertising should involve ad placement on the trendy business corporate sites to capture and market the services online.
There many fairs organized by companies in Australia and other nations, addressing issues from sustainability to corporate investments. These form some of the mostly important avenues that a company such as PwC has to participate in to sell its services and smartly outdo its competitors.
Increasingly, individuals are looking out for companies that are sustainable in their operations. This includes companies that offer services and who for long have done little in addressing the sustainability subject and practice: PwC as a marketing and promotional strategy needs to participate and lead in promoting a sustainable environment. This can be done through procuring sustainable equipment and materials that are used within the firm as well as participating in community environmental sustainability projects: this presently forms a major marketing strategy (Chimhanzi & Morgan, 2005). Additionally, suppliers have been known to affect the company’s reputation therefore PwC require partnering with ethical suppliers and who are certified as a way to maintain and promote the firm’s reputation. In so doing the supplied material and equipment utilized in offices will be sustainable, durable and dependable to enable efficient service delivery, which will market the company.
Competition in every industry is inevitable. Despite the fact that PwC rates second in terms profitability, it enjoys presence diversity in many nations. In the approaching 2-5 years period the firm should aim penetrating other markets within the globe, bettering the services in the available markets and clients (Chimhanzi & Morgan, 2005. The existence of the company in numerous nations indicates its strength, which requires to be used as a marketing channel to clients within those nations’ economies’ as well as the regional economies.
Government is the major regulator in all the activities concerning every firm. The state has put in place laws requiring companies to deliver quality services to the end consumer. In order for PwC to maintain the good relations with the regulator it requires adopting measures pointed towards self regulation: self regulation to the authority places the firm at highly esteemed position. This is a wonderful position to take geared towards preparations for the approaching expansion period. In addition conforming to the rules and regulations, is a marketing strategy since when the ratings of the best firms that conform to the state’s standards are produced PwC will rank among the highest.
The main environmental impacts on supply consist of regulations, economic, socio-cultural environments. Accounting firms and auditors face market discipline that works towards a decreased likelihood of future accounting scandals. The Auditing and Assurance Standards Board develops guidance and standards for auditors and accountants. The regulations set by the Australian Securities and Investments Commission must be observed which are intended to ensure that Australia’s fiscal markets are transparent and fair, supported by informed and confident consumers and investors (Francis, Michas & Yu 2013, p. 1629).
Technology and especially the mass media have been a great enabler and platform towards attaining marketing aspirations. PwC has wide range of prospective channels that can be used to channel marketing messages from the internet to the mass media. Mass media forms one of the mainly popular avenues of advertising, this is because it reaches numerous individuals inclusive of corporate members. Presenting the firms strategies and achievements on mass media is a great strategy to the catch the eye of the prospective clients (Chimhanzi & Morgan, 2005. The company within its planned expansion and growth plan requires preparing towards conforming to the socio-cultural environments in various parts of nation and the globe as a whole. Some of the firms within the nation originate from diverse nations which observe their cultures even within the company operations. As marketing strategy PwC should market its capability towards observing and respecting cultural components of the firms whilst delivering its services. Taking into account the firm will require to penetrate other global markets, preserving the local cross cultural perspective’s is good marketing strategy which will guarantee continued existence within the said nations.
Blue Ocean Strategy (BOS) theory
This theory postulates that there are unexploited markets as well as the opportunity for higher growth without having to eat away at the competitors’ profits. Competition is not relevant according to the Blue Ocean Strategy, since the rules of the game are yet to be laid down. With supply being more than the demand in many industries, to compete for contracting markets would not be adequate in sustaining high performance (Kim & Mauborgne, 2005). With the use of BOS, PwC can be able to succeed not by fighting with the competitors in the marketplace, but through the creation of blue oceans of uncontested market space. Such strategic moves would lead to a leap in value for Price Waterhouse Coopers, its staffs, and clients, whilst unlocking new demand and rendering the competitors irrelevant.
Blue Ocean Strategy eliminates the customary corporate fights regarding particular clients. For an advanced company like PwC, marketing should be more responsible and innovative, BOS extends this provision. The back and forth wars results in wastage of resources which could be used effectively in exploiting the untapped areas or industries. Further, in order to ensure a national presence and extend a considerable impact PwC can exploit the lower end firms and offer attractive and competitive services. The lower end firms are a sector that has been disregarded by numerous multinational auditing firms such as the PwC’s competitors making a valuable strategy for consideration. The BOS theory can aid the firm in identifying areas of opportunities in the developing markets especially in Africa and Asia. PwC’s can use this as growth strategy towards penetrating these markets to offer the ever increasing demand for audit services (Kim & Mauborgne, 2005). It is true that particularly African market has been underutilized and PwC could take this advantage and make its way to the inadequately serviced nations.
2.0 Intermediaries, Environment and Observers
Nature of Intermediaries
The role of the intermediaries in marketing strategies and maintaining marketing strategies is enormous. The employees of the firm are the distributors of the PwC’s services: distributors play an important role in marketing the service in question. The staffs are able to market the firm through portrayal of ethical and responsible auditing practices. For PwC to ensure the staffs are good marketers they require to be equipped through necessary training to instill the required conduct as well as enlightening them with issues regarding ethical auditing regulations. Logistics would involve delivering the service to the client in most satisfying and timely manner. Despite the fact that these are services, the delivery channel needs to show vigilance and efficiency. The service must be delivered at the agreed upon period and price. This is a good marketing strategy which will retain the current clients and induce the prospective ones.
Industry Observers Outside the firm
There are several organizations that have a considerable influence to the auditing industry in Australia. The Australian Securities & Investments Commission (ASIC) administers the requirements of the Corporations Act as it pertains to auditor independence as well as audit quality. ASIC’s audit oversight activities assist with maintaining and raising the standard of conduct in the profession of auditing. It is of note that whilst these activities have both a compliance and educational focus, enforcement action could be taken when considerable non-compliance is identified (Australian Securities & Investments Commission 2014).
The other industry observers are the Australian and Assurance Standards Board and Australian Auditing Standards, which set the requirements and offer application on other explanatory material regarding: (i) the form as well as content of the auditor’s report. (ii) The responsibilities and duties of an auditor when engaged to carry out an audit of a fiscal report, or complete set of fiscal statements, or any other historical fiscal information (Auditing and Assurance Standards Board 2014). Another industry observer is the Australian Accounting Standards Board (AASB), a statutory, independent agency with the responsibility of creating standards and guidance for auditors as well as providers of other assurance services. The Australian Financial Security Authority (AFSA) administers and regulates the proceeds of crime, personal insolvency system, and trustee services. The Financial Reporting Council (FRC) provides board oversight of the process for establishing standards of accounting in Australia (Australian Government 2014).
A scan of an organization’s external macro-environment may be described in terms of Legal, Political, Economic, Technological, Environmental, and Social factors (Porter 1998).
- Political: at present, there is political stability in Australia and in a lot of other countries in which PwC operates in, and this is favorable to PwC and other auditors.
- Economic factors: the economic growth in Australia was 2.8% in 2013 and the rate of inflation is 3% (World Bank 2014). This is favorable to PwC and other auditors since it illustrates that there is a growing market and opportunity of the services offered by PwC.
- Social factors: in terms of demographics, Australia has a population of about 23.13 million, with 89 percent living in suburbs, cities and other urban areas as of the year 2014. The rate of population growth is currently 1.4 percent, and the education level in the Australia is very high (World Bank 2014).
- Technological factors: technology has a substantial influence and impact on auditing. The incessant evolution of software and hardware provides auditors with the capacity to do more complex calculations with greater accuracy, speed, ease and mobility. Now, auditors can speedily collect data, produce reports, and explicitly communicate the results (Montgomery 2010, p. 50). Some of the new technology available to auditors includes IDEA from CaseWare IDEA Inc., and ACL from ACL Services Ltd, which are software programs for data mining and data extraction.
- Legal factors: these include consumer protection, rules on monopolies and mergers, international trade regulations and restriction, as well as national employment laws in Australia and in other nations around the world wherein PwC operates in. In Australia, PwC must pay its workers no less than the stipulated minimum wage of $16.87 per hour or $640.90 per week as mandated by the Fair Work Commission (Montgomery 2010, p. 42). Auditors must also comply with the regulations established by the government and government bodies such as the Australian Securities and Investments Commission, and the Australian Accounting Standards on auditing quality, standards, and integrity.
Porter’s 5 Forces: Supplier Power – Low
In Porter’s 5 Forces, the supplier power is understood as the pressure that suppliers can exert on business organizations by raising the prices (Gurau 2007, p. 380). At present, the bargaining power of suppliers is not a significant force in such a fragmented industry. Essentially, universities are suppliers considering that nearly all employees in this market come out of business schools. The auditing firms can obtain workers from the many universities and business schools across Australia, and therefore this makes the supplier power to remain low.
The three top competitors of PwC have established cooperation with customers and suppliers in Australia and in many other nations the world over. Ernst & Young, KPMG and Deloitte all work with various universities and business schools, which supply the firm with employees.
Environmental factors affecting competitive and cooperative strategies
The key environmental factors that affect competitive as well as cooperative strategies include state and national governments and regulations considering that policies established by the government can enhance or impede competition strategies and cooperation strategies. All the competitors in this industry must observe the ASIC, and AASB standards, rules and regulations. The companies in this industry take into account the Blue Ocean Strategy and understand that there are unexploited markets as well as the opportunity for higher growth without having to eat into the profits of other players in the industry. KPMG, Deloitte, Ernst & Young have been able to succeed not by fighting with each other and other auditors in the marketplace, but through the creation of blue oceans of uncontested market space (Kim & Mauborgne 2005).
In conclusion, regarding the conditions for supplying the service – auditing, tax, advisory, and consulting services –, the main competitors to PwC include KPMG, Deloitte, and Ernst & Young. Each of these networks has created an entity for co-coordinating the network’s activities both in the Australia and in more than 150 nations globally hence they are PwC’s competitors both nationally and globally. The main industry observers are Australian Accounting Standards Board, Australian Prudential Regulation Authority, and Australian Securities and Investments Commission. The competitors have partnered with suppliers and clients including universities and business schools across Australia. By using Blue Ocean Strategy, PwC can be able to succeed not by fighting with the competitors in the marketplace, but through the creation of blue oceans of uncontested market space.
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