branding essay 2

Student Number: 08009949 Module Code: BUSM3401

University of Worcester

Accenture Strategy 2010

Analysis of the Branding/Corporate Identity Strategy

Student Number: 08009949

12/15/2010

Executive Summery - Accenture is a global management consulting, technology services and outsourcing company. Committed to delivering innovation, Accenture collaborates with its clients to help them become high-performance businesses and governments. With deep industry and business process expertise, broad global resources and a proven track record, Accenture can mobilize the right people, skills and technologies to help clients improve their performance. IBM due to their long standing within the technological market has taken leadership of the market, whilst Mckinsey & Co’s heritage depicts their strategy to compete on traditional ‘values’ within the management consulting sector. The recession has introduced new competitors into the market in the form of Infosys Technology, who are targeting the price conscious business owner via outsourcing initiatives.

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ContentsContents.....................................................................................................................................1

Section I – Current Competitive Position..................................................................................2

1.1 – Potential Market Entrants – (Barriers to entry).................................................................2

Section II - Obtaining Competitive Advantage through Branding.........................................3

2.1 Competing with IBM.....................................................................................................3

2.2 - Competing with Infosys Technologies via outsourcing initiatives.............................5

2.2.2 Competing with Infosys Technologies on price.........................................................6

2.3 Measuring Brand Equity................................................................................................7

Section III – Obtaining Competitive Advantage through Corporate Identity.....................8

3.1 Competing with Mckinsey & Co’s ‘traditional’ values................................................8

3.2 Measuring Brand Personality......................................................................................10

Evaluation..........................................................................................................................10

Glossary.............................................................................................................................11

Reference List....................................................................................................................12

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Accenture is known for its global scale and strong implementation competency (Kaikati,

2009). Accenture’s image was achieved through a successful corporate identity (CI)/branding

campaign that followed arbitration from Anderson Consulting (AC) (Kaikati, 2009).

Therefore, this paper will explicate as to how branding and corporate identity can be

enhanced in order to construct a level of competitive advantage within the market that

Accenture resides, evaluate the impact of these corporate identity and brand management

initiatives, the impact of these within the global market and explicate as to mechanisms that

will protect the brand.

Section I – Current Competitive Position

1.1 – Potential Market Entrants – (Barriers to entry)

Accenture’s competitive position can be determined through Porter’s, (1985)

‘Competitive analysis model’ specifically the ‘Barriers to entry’ segment. In order to

ascertain the current position of Accenture the BCG Matrix is used to determine the balance

of the business in terms of the relationship between market share and market growth (David,

1999). Accenture is a company in a market that due to the current economic downturn has

resulted in their market share decreasing (Hale, 2009). Hale, (2009) states that ‘IT and

process management’ segments, grew less than forecasted even though the ‘potential cost

savings from outsourcing usually keeps this market segment buoyant’ (Hale, 2008). Due to

the economic downturn, buyers are hesitant in committing to long term requirements of

outsourcing contracts (Hale, 2009). However, Hale, (2009) suggests that the IT market is

monopolistic and therefore has low barriers to entry and high growth demonstrated by

Accenture’s ability to become the third largest IT vendor in 2009 with only a 2.9% market

share worth $23.7 billion. This large amount of capital that Accenture commands reduces the

ability for new companies to compete on the same level. Therefore, in the short run

Accenture have been able to utilise its market power to generate profit. However, in the long-

run, with the low entry barriers, other firms will enter the market and the benefits of

differentiation decrease with competition; the market therefore evolves into perfect

competition where firms cannot gain economic profit.

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However, unlike perfect competition, the firm maintains its level of capacity allowing

Accenture to differentiate on their economy of scale. In-line with the characteristics of a

monopolistic market, Accenture has a degree of control over price and can use this to

demonstrate points of difference. The low barriers to entry have resulted in an increased level

of competition from overseas within the outsourcing sector. Accenture’s current outsourcing

substitution competitor, India based Infosys Technologies (INFY), has created points of

parity against Accenture by their ability to obtain labour at a reduced cost.

Within the technological services sector, Accenture competes with IBM, specifically

its ‘Global services business unit’. According to Hale, (2008) IBM leads Accenture by a

substantial margin in terms of revenue, profitability and economies of scale. Economies of

scale are the advantages of large scale production that result in a lower cost per unit (Turner,

2002), such as the size in IBM’s scale of operations. This includes increased labour, plants,

equipment, skills and technology at their disposal, thus increasing their reach over the market.

By being the market leader IBM can influence the market prices in accordance with their own

strategy. Within Management Consulting, Accenture competes with ‘traditional’ strategic

consulting groups like McKinsey & Co (Hale, 2008).

Section II - Obtaining Competitive Advantage through Branding

2.1 Competing with IBM

Murphy, (1997) defines the characteristics of branding as being the ‘perceived

functional and emotional benefits.’ This definition concentrates on the organisation’s internal

environment to create intangible assets that create a distinctive image in the client’s mind-set

(Murphy, 1997). Kaikati, (2009) refers to Accenture’s internal structure as its core

‘competency,’ which was a central dimension of Accenture’s rebranding/repositioning after

arbitration. Strategy, change management, process, and technology, were the organisational

business processes that Accenture used to increase its knowledge base among its

stakeholders. ‘Depersonalised knowledge’ such as; ‘technology infused capabilities,’

‘industry knowledge’ and ‘uniquely creative, re-usable assets’ (Kaikati, 2009) encapsulated

the functional values of Accenture, which transmitted to clients a perceived market position.

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However, Kaikati (2009) suggests that Accenture lacks technical expertise which

hampers its market position and, in turn, Accenture’s ability to compete with market leader

IBM. To increase its competitive advantage (CA) Accenture can use its

knowledge/experience in management consulting/strategy to supplement its weakness

regarding technical skills by partnering with leading hardware, software developers. This

combination of skills will allow Accenture to establish points of parity with technology firms

such as IBM and prevent technological complications emanating from internal/external

sources, whilst simultaneously achieving differentiation. Therefore, by partnering with

industry leaders, Accenture will transmit ‘depersonalised’ values such as expertise,

knowledge, creative, inventive, resourceful, High-Tec and modern. Expertise, knowledge and

creative will enhance the current ‘depersonalised’ values that Accenture transmit to the

customer. Whereas inventive, High-Tec, resourceful and modern will enhance the brand

equity as these values will be deferred onto Accenture and increase Accenture’s CA over

IBM, by increasing the level of ‘depersonalised’ knowledge within the customers’ mindset

and position the organisation further in-line with IBM’s capabilities. In order to increase the

level of the perceived market position that Accenture holds in line with that of IBM, the

customer’s mindset must develop a cognitive persuasion to those values that encompass

Accenture as inventive. This can be obtained by creating initiatives within their services

catalogue to demonstrate points of differences between Accenture and IBM. Resourceful will

be obtained through Accenture’s ability to create a joint enterprise with a market leader in the

software/hardware sector. High-Tec and modern will be deferred from the merging with a

market leader whose values can demonstrate that it is up-to-date with market and

technological trends.

By creating a joint enterprise with another global brand within the software/hardware

industry, Accenture can incur values from where they were formulated (Turner, 2002).

Therefore, a developer situated in china can accommodate for values of tradition and

innovation thus allowing Accenture to cater for different cultures and needs within the global

market thus strengthening their global position and competitive advantage. Accenture’s

merger with overseas brands will increase its existing assets and capacity thus increasing

their economy of scale more in line with that of IBM increasing their CA.

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However, with the volatile nature of IT and the increasing level of competitors within

the market, the ability of the developer to maintain a leading position may be in jeopardy.

Therefore, what could be seen as a method of protecting the brand could result in the brand

damaging the values that Accenture transmits. This would demonstrate that their ‘industry

knowledge’ is limited and their ‘technology infused capabilities’ were not in line with that of

the changing market conditions. This would show they were not able to demonstrate a

‘creative’ method of retaining their position, and thus negatively impacting on the customers’

mindset and Accenture’s core competency i.e. the internal structure, resulting in a mindset

that suggests Accenture does not have the capabilities to devise initiatives to aid the

technological expansion of customer businesses. This will tarnish Accenture’s perceived

market position and impact on market share/position, therefore, diminishing the competitive

advantage that the merger with a developer had obtained and therefore Accenture’s ability to

compete with IBM will be impeded.

2.2 - Competing with Infosys Technologies via outsourcing initiatives

Outsourcing services to foreign organisations allows organisations to meet the

demands of the price conscious customer, a need which has arisen from the downturn. This

keeps costs relatively low in comparison with a country that has high inflation and taxes, and

would therefore result in a decrease of resource costs, which will in turn, boost profit margins

(Bickerton, 2000), something Accenture would benefit from due to it being based in the

USA, which is situated in a comparatively mature market to India (Bickerton, 2000).

Therefore, the USA market sustains growth by demanding a higher expenditure on resources

and as the law of the USA demands, businesses must abide by laws that are in the interest of

fairness that India, a developing country, has yet to integrate (Melewar et. al, 2000). For

instance the minimum wage is lower than that of the USA; therefore the low cost of resources

translates into low cost for customers (Melewar et. al, 2000), allowing Infosys to compete on

price. As a consulting firm, Accenture's most important resource is its workforce. Given

Accenture’s focus on technology, its success is dependent on its ability to hire and retain

technically skilled individuals. In order to compete with the low cost that outsourcing to India

holds, Accenture have emphasised the growth of its labour force in India in order to maintain

its competitive advantage (Accenture, 2003). However, with the increasing level of

companies outsourcing to India, the demand for labour has driven costs up.

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In addition, the economic growth of India has increased salary inflation which will hamper

Accenture's ability to continue its rapid expansion, and put pressure on Accenture’s margins.

The decrease in margins will affect the profitability of the business and detract from the

‘depersonalised’ knowledge transmitted by the Accenture brand. Therefore in order to

obtain/retain skills of a workforce Accenture must demonstrate points of parity and position

the brand in such a way that justifies a level of commitment. This can be achieved by a

consistent communication strategy that increases the level of brand equity. Douglas, (2001)

defined branding as a ‘holistic company or organisational brand’. This definition stresses the

need for consistent communication (Douglas, 2001). This will allow Accenture to

obtain/retain workforces that relate to the ‘depersonalised’ values, and, in turn, demonstrate

to stakeholders a consistent communication strategy. This will result in an increase of brand

equity by manipulating levels of cognitive awareness/understanding thus, stakeholder

personas evolve into ‘billboards’, increasing the global visibility of Accenture’s vision and

purpose among stakeholders.

The channels in which Accenture choose to distribute their services through oversees

in order to protect the brand from being out performed on price, may impede there expansion

by demonstrating a lack of clarity with the vision of Accenture, and its core values, and

therefore hamper their global communication strategy.

2.2.2 Competing with Infosys Technologies on price

By outsourcing to India, Accenture has increased its reach over the global market and

its ability to compete within (Douglas, 2001). Accenture faces growing competition from off-

shore service providers whose revenues have grown upwards of 30% a year (Wood, 1999).

Such companies offer similar services at extremely competitive prices. For example, the

average cost per employee at INFY is $34,000, while Accenture has an average employee

cost of $110,000 (Wood, 1999). While these numbers are skewed by Accenture's upper level

management in the United States (Wood, 1999), they reflect the large CA of Indian firms.

These firms compete with Accenture by outsourcing and systems integration areas. Therefore

in order to justify the higher price Accenture need to integrate initiatives to create points of

difference from INFY. In order to command a higher price Accenture need to increase their

level of brand equity which adds to the value of the brand.

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This can be achieved through Porter’s (1985) generic strategy and specifically the

differentiation framework, which is the development of a product or service that offers

unique attributes and that customers perceive to have added value than a competitors, thus

creating a CA. Accenture’s ‘depersonalised’ values create attributes within the services that

they offer. These values encompass values of quality, however by outsourcing the workforce

to India it allows Accenture to compete on price. This is in-line with Bowman’s strategy

clock model, namely the hybrid model. Bowman’s strategy clock model is a way of analysing

a company’s position in comparison to the offerings of competitors (Murphy, 1997), this

enables Accenture to establish methods of CA. The hybrid strategy allows Accenture to

achieve differentiation within the saturated market at a price lower than its competitors, by

investing in a low cost strategy and differentiation, (Murphy, 1997). In the case of Accenture

this requires a strategy that focuses on design of services/low cost. However, by outsourcing

to India this depicts that there current workforce in the USA is not adept enough to handle

operations, which detracts from the quality value and thus detracts from the brand equity,

which affects the perceived global position of the firm and therefore resulting in Accenture

being unable to justify their CA and, in turn, their ability to command a higher price for

services.

2.3 Measuring Brand Equity

In order to evaluate the brand equity Accenture can assess the consumers' brand

knowledge by profiling their customer base. Under certain situations, consumers may feel

that it would be socially unacceptable or undesirable to express their true feelings (Van Riel,

1997). As a result, they may demonstrate stereotypical answers that they believe would be

acceptable or expected by the interviewer (Van Riel, 1997). For example, it may be difficult

for consumers to admit that the Accenture brand name has prestige and enhances their firm’s

image. As a result, consumers may instead refer to some particular product feature as the

reason why they like or dislike the brand (Van Riel, 1997). Alternatively, it may be that

consumers find it difficult to identify and express their true feelings when asked directly (Van

Riel, 1997). For either of these reasons, an accurate portrayal of brand knowledge structures

may be impossible without implementing the unconventional research method of projective

techniques (Van Riel, 1997).

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Projective techniques are diagnostic tools to uncover the true opinions and feelings of

consumers when they are unwilling or otherwise unable to express themselves on these

matters (Van Riel, 1997). Projective techniques provide insights into the relationship between

the consumers and the brand. The idea behind projective techniques is that consumers are

presented with an incomplete stimulus and asked to complete it or given an ambiguous

stimulus that may not make sense in and of itself and are asked to make sense of it (Van Riel,

1997). In doing so, the argument is that consumers will reveal some of their true beliefs and

feelings (Van Riel, 1997). Thus, projective techniques can be especially useful when personal

motivations or personally or socially sensitive subject matters may be operating (Van Riel,

1997).

Section III – Obtaining Competitive Advantage through Corporate Identity

3.1 Competing with Mckinsey & Co’s ‘traditional’ values

Van Riel et. al, (1997) definition of CI presupposes that organisations follow a set

structure, this is based on the premise that organisations behaviour, communication and

symbolism, are the prerequisites required to meet management objectives (Van Riel et.

al,1997). Balmer & Soenen, (1998), however, established an ‘organic’ composition of CI

composed of the mind, soul and voice. The use of metaphorical imagery that assigns human

characteristics to an organisation allows Accenture to develop a ‘personality’ and, by

focusing on characteristics that exemplify the organisation as an autonomous being, means

that CI becomes integral to the corporate strategy.

The ‘soul’ consists of the subjective elements such as the values (Balmer & Soenen,

1998) that an organisation, such as Accenture transmits. Within Management Consulting,

Accenture competes with ‘traditional’ strategic consulting groups like McKinsey & Co (Hale,

2008). The ‘traditional’ value that this brand transmits, demonstrates a heritage and

knowledge of the sector, something that Accenture as a comparatively young organisation

cannot compete with. Therefore, in order to aid the differentiation and positioning process

Accenture should demonstrate characteristics that personify the organisation as innovative,

smart, collaborative and passionate (Krauss, 2009).

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The smart value will arise from Accenture thought leadership and ability to rapidly develop

and execute strategies and collaborative due to its partnerships with clients and the manner in

which Accenture shares its knowledge and expertise. Accenture can retain the passionate trait

from its previous positioning, as it remains driven to help clients succeed and embrace

challenges. To ensure the success of the branding initiative to retain/obtain employees

Accenture can use the passionate trait to encourage employees to “live’ the positioning and

bring it to life’, (Krauss, 2009), thus aiding the globalisation and its ability to gain CA over

Mckinsey through its workforce and retain consistent communication through its employees.

According to Balmer & Soenen, (1998) the ‘mind’ consists of an organisation’s

managerial vision/strategy. The managerial vision for Accenture will be to differentiate itself

from Mckinsey and within the managing consulting market (Kaikati, 2009).

The ‘voice’ is the symbolism used within corporate communication (Balmer &

Soenen, 1998). Accenture differentiated itself by accentuating the name with a distinct visual

symbol (Kaikati, 2009). The ‘greater than’ sign (Kaikati, 2009) emphasised Accenture’s

vision to point the way forward and exceed client’s expectations. This differentiates

Accenture from the ‘traditional’ values exhumed by Mckinsey by demonstrating that they

have the capabilities to foresee future global market trends, something that a ‘traditional’

characteristic does not transmit. Mckinsey ‘traditional’ values depicts that they are likely to

have to a centralised structure and a hierarchy that does not accommodate for ‘free-thinking’,

and that any changes would be slow to integrate, and therefore would not be able to

accommodate for the dynamic global environment thus benefiting Accenture’s CA.

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3.2 Measuring Brand Personality

In order to assess the brand personality of Accenture, Fournier

(1999) model of Brand Relationship Quality (BRQ), will indicate the

strength and depth of the person–brand relationship. The intimacy facet

refers to the psychological closeness between the relationship partners

and the knowledge about the brand. Personal commitment means loyalty

to the brand in terms of faithfulness and willingness to make small

sacrifices. Passionate attachment refers to the integration of the brand

within the stakeholder’s mindset. Self-concept connection reflects the

extent to which the brand is part of the self, part of the self image, and

refers to the question whether there is continuity between the stakeholder

and the brand.

O'Malley and Tynan (2001), however depict the suitability of the

relationship metaphor: ‘under which circumstances does a consumer–

brand relationship exist?’ They suggest that close relationships are

unlikely to exist between all consumers and all brands, because close

relationships are special and therefore rare. Also some brands are

naturally more suited for a relationship than others, for instance because

of the importance of the brand to the consumer (Dowling, 2002) or

because of the personalities of the consumer and the brand (Aaker et al.,

2004. Consequently, its diagnostic value for strategic decision-making in this case is

limited.

Evaluation

In order to evaluate the performance and competitive position of Accenture Remult, et

al’s (1994) model for ‘Evaluating Strategic Options’ will be used. Accenture are consistent

with their efforts to increasingly develop initiatives to strengthen the repositioning of

Accenture, however, Accenture has yet to gain significant market share (Krauss, 2009),

which depicts that the repositioning is not congruent with Accenture’s business processes.

Accenture’s consonance is apparent through their commitment to implement strategic options

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that are in-line with competitors, thus, constituting to a trend in operations. The feasibility of

Accenture gaining a significant market share is low at present, with the increasing number of

competitors within the market and with IBM’s substantial lead over the competition and with

the global economy in a fragile state Accenture do not have time to implement extensive

repositioning initiatives.

Glossary

Infosys Technologies - (INFY)

Competitive Advantage – (CA)

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