Earlier we evaluated the SWOT Analysis of Deloitte, one of the global market leaders for consulting services. In this article, we will delve into the SWOT analysis of EY – the Ernst & Young company.
EY is one of the top leading consulting firms which have been providing services since 1989. It comes under Big Four Consulting Firms along with Deloitte, PwC and KPMG. Driven by the motive of “Building a better working world”, they have always believed in creating long term values for their clients, people and society.
Due to their intensive marketing endeavours, EY continues to rule in the consulting services area. With such a dynamic environment, it is a must for all businesses to focus on their marketing strategies and cope with the latest trends to succeed over their competitors. If you want to stay updated with the latest trends, check out our Free MasterClass on Digital Marketing 101 by our CEO and founder of IIDE, Karan Shah.
Do you want to know how EY became a market leader in professional services? In this blog, we will cover the SWOT Analysis of EY and learn from it. But before that, let us first understand what the company is about, its history, competitors and much more.
EY, known as Ernst and Young is a private multinational professional service organisation based in London, UK. They have around 700 offices in over 150 countries. The company is one of the Big 4 Accounting firms that dates back to the 20th century. Earlier they specialised in auditing and tax advisors to the world’s largest corporations. In recent years, they have expanded their consulting in legal, information technology and risk management areas.
EY is the result of a number of mergers between US and UK accounting firms over the last century. The key three mergers were between Whinney Smith & Whinney (UK), Ernst and Ernst (US) and Arthur Young and Co. (US). These mergers resulted in a new company called Ernst and Young. Both the founders never really met in real life but their legacies live on. Today, the company has 3,00,000 lakh+ professional employers who provide top class professional consultancy services to their clients.
EY has been ranked #1 professional service employer for the fourth consecutive year In Universum’s 2019 “World’s Most Attractive Employers” annual ranking. EY LLP in India acquired #10 on the 2021 Linkedin top companies list in the US as the best place to grow your career.
|Founder||Alwin C Ernst & Arthur Young|
|Origin||London, England, UK|
|No. of Employees||312,250|
|Market Cap||$168.12 Billion (2022)|
|Annual Revenue||$40 billion (2021)|
|Net Income/ Profit||N/A|
Services by EY
EY offers the following services to its clients globally –
- Tax Advisory
- Digital Strategy
- Strategy Consulting
- Financial Advisory
Competitors of EY
The top 5 rivals of EY are:
Now that we know important facts about EY, we can look into the SWOT analysis of EY.
SWOT Analysis of EY
A SWOT analysis examines the strengths, weaknesses, opportunities, and threats that a firm faces. SWOT Analysis is a tried-and-true tool that enables a company like EY to compare its business and performance to that of its competitors.
It will give us a strategic analysis of its internal and external environment, which is crucial for understanding the SWOT Analysis of EY.
To better understand the SWOT analysis of EY, refer to the infographics below:
Below is an explicit guide to the SWOT analysis of EY.
Strengths of EY
EY has numerous strengths that help it to thrive in the marketplace. Some of the strengths of EY are
- Varied Services: Due to the distinct services offered by the firm such as auditing, tax, legal, consultancy it has retained its dominant position in the market as one of the best consulting firms.
- Global Reach: EY has expanded services to over 150 countries approx making it one of the high-class quality service providers. Also, it employs more than 300,000 employees in over 700 offices.
- Skilled Workforce: EY believes in training and mentoring their employees which results in highly skilled services provided by them. By investing in their employee’s experience, development enables them to focus on what matters most.
- Experts and Professionals: EY has a large number of skilled workers and specialists behind it to get things done, with a customer base ranging from consulting to management services. As a result, EY has established itself as a “specialist” or “expert” in a variety of sectors, employing a large number of industry specialists.
- Renowned Reputation: EY is one of the world’s biggest firms and has had high revenue due to its focus on consultancy, operational services, management, digital, technology and high standards and morals which leads to its high performances.
- Mergers & Collaborations: EY has acquired and merged with many businesses to strengthen its brand’s position, one of them being an acquisition with a consulting firm known as the Parthenon Group. It has lately collaborated with the World Energy Council for innovation in energy.
- Awards & Recognitions: EY has received many accolades over the years and they have been ranked as No.2 Financial Advisor across the league tables 2020 for the 15th year in a row and as the best companies to work for by Fortune magazine for the 23rd consecutive year.
- Sports Sponsorship: Sports sponsorship is the main target of EY and they have sponsored RIO 2016 Summer Olympics, have partnered with British and Irish Lions. These sponsorships have given a huge market presence to EY and increased the reach of its customer base.
- High level of Client Satisfaction: EY has a customer-focused approach. It has loyalty programs for its clients. Clients are loyal because of its customer-focused approach. It has a good environment for employees and a shift in culture that is guided by the management.
Weaknesses of EY
Weaknesses are aspects of a business or brand that can be worked upon. Here are some of the weaknesses of EY:
- Disputes: EY has many lawsuits filed against them such as scandals and fraud cases like one with the Lehman Brothers, that have tainted the company’s image.
- Safety of Client’s Information: EY had once been alleged of passing the client’s information. Such misunderstandings can cost EY customers trust and they can switch to EY’s competitor.
- Investment in R&D: With competitors having their own research centres, EY is lagging behind in their R&D department in terms of innovation even though they are spending a huge amount on this segment.
- Dependence on Consultancy: Consultancy is a major source of revenue in EY, despite having different sector works which can be bad for companies long run.
- Lack of Coordination: Due to several sectors working simultaneously there can be a lack of communication and coordination in teams. EY has been trying to serve several mid-size companies as well but faces stiff competition which can further lead to slower growth.
Opportunities for EY
Opportunities are potential areas of focus for a company to improve results, increase sales, and, ultimately, profit. Some of the opportunities for EY are
- Sustainable Approach: Customers are more cautious towards the environment and they want to have a sustainable way of living. EY believes in sustainability and this will provide leverage over its competitors and gain the trust of the future target market.
- Stable Cash Flow: With the bank having more cash now, the company will be able to invest in new technologies and product sectors. This will provide EY with broader opportunities in other product categories.
- Easy Acquisitions: Since EY has already established itself at a global level, it’s easier for them to acquire firms with smaller market shares.
- Attract and Retain Talent: Everybody looks forward to working at firms where employees have a good working environment, EY can use it to select the best human resource available.
- Big 4 Management Label: This label can help them grab opportunities and ensure growth in emerging markets across the globe.
- Technological Development: Technological advancement could be used to automate their work, which will save cost. Also, their huge revenues make it easier to make heavy investments in technology.
Threats to EY
Threats are environmental factors that can be harmful to a company’s growth. The following are some of EY’s threats:
- Public Disputes: EY had been in several accounting scandals and lawsuits for forming a lucrative business arrangement with its clients. Also, the company had been caught in accusations of sexism against women employees. Such incidents have reduced the reputation of EY.
- Intense Competition: EY faces cutthroat competition from firms like Endava, Boston Consultancy, Accenture, KPMG etc and other businesses that provide similar services.
- Currency Fluctuation: Where currency fluctuation happens, international projects appear to be hitting. Which is a serious challenge to the business.
- Knowledge Centres: This can have a counter effect on consulting firms’ business when firms constitute their in-house knowledge centres.
- Government Policies: Government Policies are the major factors that affect the business of a company like EY.
- Lack of Confidence: With a lot of regulatory actions reported in recent times such as the firm’s global network of affiliates have been involved in regulatory actions as well as lawsuits due to which clients are losing their confidence in accounting firms.
This ends our elaborative SWOT analysis of EY. Let us conclude our learning below.
Ernst and Young are leading in the consulting market but lately, they have been facing a lot of shortcomings. One of the main drawbacks is that they have many lawsuits filed against them. Their frequent scandals and fraud cases have cost them their brand image and customer loyalty.
But with the right marketing strategies, they managed to revive their customer’s trust and remove the taint from their brand. By regularly updating market surveys and collecting feedback, they meet the needs of their clients. EY believes in building a better world and quality over anything they do, and their employees are an integrated part of it. Because of that, their employees are highly trained professionals which gives them an edge over their competitors.
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