Report: Price Waterhouse Coopers Supply Side
You are required to complete an analysis of the marketing strategy of our Client Partner �
PriceWaterhouse 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.
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Report: Price Waterhouse Coopers Supply Side
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
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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
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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
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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
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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
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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.
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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).
PESTL
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).
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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
- 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
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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.
Cooperative strategies
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
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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).
5.0 Conclusion
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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References
Auditing and Assurance Standards Board 2014, Australian Auditing Standards.
