Some time back, we did an extensive SWOT Analysis of Deloitte – one of the world’s big 4 accounting firms. Today we will have an elaborative SWOT analysis of KPMG, which is also one of the other big 4s.
KPMG is a British-Dutch multinational professional services network catering for the needs of various businesses, public sector agencies, not-for-profit organisations, governments and capital markets. It is well recognised for their workspace culture and quality service provided by them to their clients.
Being part of big 4, KPMG has a well established brand value in the field of accounting, consulting and finance. One of the reasons behind the success is its marketing strategies. To know more about the changing scenario of marketing, join our Free MasterClass on Digital Marketing 101 by the CEO and founder of IIDE, Karan Shah.
Do you want to know how KPMG became successful? In this blog, we will get to learn about the SWOT analysis of KPMG. Before proceeding further let us just know more about KPMG as a company.
The name “KPMG” stands for “Klynveld Peat Marwick Goerdeler”, each word representing the name of one of its 4 founding fathers – Piet Klynveld, William Barclay Peat, James Marwick and Reinhard Goerdeler – each one of them have a history of starting, working and leading at separate accounting firms even at a stage where accounting was not accepted as a profession.
The merger of Peat’s firm and Marwicks’ firm – Peat, Marwick, Mitchell & Co. – laid the foundation of KPMG. Various other mergers took place between the 1970s to 1980s and finally on January 1, 1987, one of the largest mergers in the history of accounting took place (PMI & KMG) and KPMG was formed.
KPMG has been recording breaks and growing rapidly. In the 1950s it was one of the first big 5s (now big 4) to publish reports and accounts and also the first one to create value charters. Currently, KPMG operates in 145 different countries and territories offering audit, tax and advisory services to its clients spread all across the globe.
|Founder||William Barclay Peat, James Marwick & Roger Mitchell|
|No. of Employees||236,000|
|Annual Revenue||$32.12 Billion (2021)|
|Net Income/ Profit||N/A|
Services by KPMG
KPMG offers the following services to its clients globally –
- Legal & Tax advice
Competitors of KPMG
Here are the top 5 competitors of KPMG
- Ernst and Young
Now that we know important facts about KPMG, we can look into SWOT analysis of KPMG.
SWOT Analysis of KPMG
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 BCE (KPMG Canada Enterprises) 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 KPMG.
To better understand the SWOT analysis of KPMG, refer to the infographics below:
Below is an explicit guide to the SWOT analysis of KPMG.
Strengths of KPMG
KPMG has numerous strengths that help it to thrive in the marketplace. Some of the strengths of KPMG are
- Extensive Geographic Reach: KPMG has a large client base in a variety of sectors throughout the world. KPMG has partners in approximately 650+ offices across 145 countries with 236,000 employees.
- Brand Identity: Being part of big 4 has made it top-of-the-mind firm when it comes to audit, tax and advisory. Throughout the world KPMG is recognized for its services of world-class quality.
- Core Values: KPMG holds values of integrity, excellence, courage and togetherness. KPMG is also ranked 4th among the list of “50 Best Places to Launch a Career” in 2009 according to Bloomberg Businessweek.
- Growth in Revenue: In FY21, KPMG reported a 10% growth in US dollar revenue as compared to FY20.
- High level of Client Satisfaction: KPMG 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.
- Awards & Recognition: KPMG has been recognized several times including the experienced risk manager award, 2009 top consultancy ranking, 2011 world’s best outsourcing advisor and many more.
- Sponsorship: KPMG brand has an exclusive sponsorship deal with different events throughout the world. By doing so they are gaining more market clarity. Since 2016, it has served as a strategic sponsor of Brain Bar.
Weaknesses of KPMG
Weaknesses are aspects of a business or brand that can be worked upon. Here are some of the weaknesses of KPMG:
- Unapproachable: Being operated at a global level, KPMG is unapproachable in terms of its high fee and expertise.
- No Differentiating Factor: KPMG does not have a clear differentiating factor or USP from other big 4s.
- Reputational Issues: KPMG has been part of several controversies which tarnished its reputation including the incident of their former partner being involved in insider trading.
- Difficulty Expanding Service Segments: Although KPMG is working well in the current services they offer, they face challenges and limited success in introducing additional service segments.
- Lack of Coordination: Due to several sectors working simultaneously there can be a lack of communication and coordination in teams. KPMG has been trying to serve several mid-size companies as well but faces stiff competition which can further lead to slower growth.
- Dependence on Consultancy: Consultancy is a major source of revenue in KPMG, despite having different sector works which can be bad for companies long run.
- Investment in R&D: KPMG has not been able to compete with the leading players in the industry in terms of innovation and R&D. It has come across as a mature firm looking forward to bringing out products based on tested features in the market.
Opportunities for KPMG
Opportunities are potential areas of focus for a company to improve results, increase sales, and, ultimately, profit. Some of the opportunities for KPMG are
- Easy Acquisitions: Since KPMG has already established itself at global level, it’s easier for them to acquire firms with smaller market share.
- Attract and Retain Talent: Everybody looks forward to working at firms where employees have a good working environment, KPMG can use it to select the best of human resource available.
- Big 4 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 them cost. Also, their huge revenues make it easier to make heavy investments in technology.
- Constant Requirement of Services: With regular changes in the various policies and the growing scale of businesses, the demand for audit, tax and advisory services will never be zero.
- Experience in Financing & Auditing: KPMG has technology in financial and auditing experience, which may be of benefit to global financial services.
- Mid-Market Businesses: KPMG has numerous products and services that support many customers and that’s the reason it will reach mid-market businesses. This will provide the company with a lot of opportunities.
Threats to KPMG
Threats are environmental factors that can be harmful to a company’s growth. The following are some of KPMG’s threats:
- Intense Competition: KPMG face cut-throat competition from firms like Deloitte, PwC, Accenture, EY etc and other businesses who provide similar services.
- Changes in Legislation & Regulation: Enactment of laws like the Sarbanes-Oxley Act of 2002 and constant changes in GAAP are a threat to the accounting industry as a whole.
- 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.
- Cyber Security Threat: Since most of the KPMG work relies on technology and the internet, they are prone to cyber crimes.
- Change in Rate of Exchange of Foreign Currency: Since KPMG offers its services to clients in other countries as well, fluctuations in foreign currency can lead to losses.
This ends our elaborative SWOT analysis of KPMG. Let us conclude our learning below.
KPMG, part of the big 4, dominates a large section of its target market because of the reason that it has managed to overcome its shortcomings, carefully monitoring its threats, taking advantage of all the opportunities that come its way and further strengthening its plus points.
KPMG is well known for its global presence, its values, its quality services and the level of client satisfaction it provides. However, the company still needs to establish a differentiating factor from its competitors, take actions to be accessible and approachable to every client and work on building back their image tarnished due to various controversies.
In recent years, KPMG has worked a lot to improve its brand identity and image by advertising, sponsoring many events and using various other digital marketing strategies. If you also wish to learn digital marketing and work with well-known firms, check out the 3 Months Advanced Digital Marketing Course by IIDE to know more.
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