Elaborative SWOT Analysis of KPMG – One Of The Big 4

Quick Stats on KPMG

Founder	William Barclay Peat, James Marwick & Roger Mitchell
Year Founded	1987
Origin	Netherlands
No. of Employees	265,000
Company Type	Public
Market Cap	N/A
Annual Revenue	$35 Billion (2022)
Net Income/ Profit	N/A

 

Services by KPMG

KPMG offers the following services to its clients globally –

• Actuarial
• Assurance
• Financial
• Legal and tax advice
• Consulting

What’s new with KPMG

Check out some current news about KPMG:

• KPMG Sheds Light on Bitcoin’s ESG Benefits and Dispels Myths in Latest Report.
• KPMG Takes a Bold Step into the Metaverse with $30M Investment in Web3 Employee Training.
• KPMG Reveals Its 2023 U.S. Impact Plan.

Now that we know important facts about KPMG, we can look into the SWOT analysis of KPMG. 

Buyer Persona

Following is a buyer persona for KPMG that will help you understand the target audience.

Now that we have got insights about the company. let us have a look at the 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 265,000 employees.
• Brand Identity: Being part of Big 4 has made it a 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, the 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 that tarnished its reputation including the incident of its 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 resources 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 costs. 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: The 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. 

Before we conclude our study on the SWOT Analysis of KPMG. let us have a look at the competitors of KPMG.

Top 5 Competitors of KPMG

Deloitte

Professional services are where Deloitte excelled, providing extensive services through audit, consulting, tax, and advisory. Covering multiple sectors, their influence extends to more than 150 countries. Competition heats up between Deloitte and KPMG as Deloitte commitment to innovation, digital transformation, and client-focused solutions gains momentum.

PwC (PricewaterhouseCoopers)

Another of the greatest players in the professional services sector, PwC provides audit and assurance, consulting, and advisory services. PwC has a robust technology focus, and innovation drives its efforts, which PwC uses to compete closely with KPMG, particularly in key industries like financial services, healthcare, and technology.

Ernst & Young (EY)

Accounting services from audit to transactions are offered by EY, one of the Big Four firms. A combination of global reach and ESG priorities has earned them a reputation. In alignment with KPMG’s expertise lies EY’s focus on technological advancements and innovation.

BDO International

Member firms of BDO jointly offer accounting, tax, and counseling services worldwide. Although it is not as extensive as the Big Four, BDO has notable sectoral strength in countries with presence and competitive prowess across manufacturing, retail, and healthcare. By focusing on individualized services, they stress the value of market knowledge.

Grant Thornton

Grant Thornton consists of a network of independent audit, tax, and consulting firms. It is their mid-market focus that defines their clientele, covering privately held companies and family-owned businesses. Mid-market sector competitiveness comes down to Grant Thornton’s capacity to adapt via its agility compared to KPMG.

This ends our elaborative SWOT analysis of KPMG. Let us sum up our learning below.