Deloitte’s mission is to help clients and people excel.
Deloitte is a provider of professional services. The company operates four reportable business segments:
In 1845 William Welch Deloitte started an accounting business in London. In 1896 Charles Waldo Haskins and Elijah Watt Sells founded Haskins & Sells in New York, the first major auditing firm to be launched by American accountants. In 1898, George Touche started his own accounting firm in London, then partnered with John Ballantine Niven in 1900 to form Touche Niven.
Deloitte experienced significant growth, and over time launched operations in the U.S. In 1952 it merged its U.S. division with Haskins & Sells to form Deloitte, Haskins & Sells. Touche Niven also had success, and after a series of mergers had become Touche Ross in 1969. By the 1970s Touche Ross was the third biggest accountancy in the UK, with over 74 offices and 450 partners.
The 1980s saw much turmoil in the industry, with economic disasters such as the savings and loan scandal contributing to increased scrutiny and threats to revenues. Taking this into account, Deloitte, Haskins & Sells considered merging with Touche Ross in order to strengthen both their businesses. This was viewed oddly, as Touche was known as a maverick, while Deloitte was viewed as stuffy.
Despite their contrasting styles, the two agreed to integrate, completing the deal in 1989 to form Deloitte Touche Tohmatsu Ltd. (DTTL). They both brought Fortune 500 clients to the table – Deloitte had P&G and GM, while Touche had Macy’s and Chrysler. Deloitte largely took control, with its chief J. Michael Cook taking over as CEO of the new entity. It is now one of the top accounting firms.
Business model of Deloitte
Deloitte has a mass market business model, with no significant differentiation between customer segments. The company targets its offerings at firms that seek consulting and advisory services.
Deloitte offers three primary value propositions: accessibility, innovation, and brand/status.
The company creates accessibility by offering a wide variety of options. A significant element of its strategy is growth through acquisition. This has enabled it to add many capabilities to its portfolio.
The company places a strong emphasis on innovation. It operates Deloitte Innovation Centers, a collection of programs designed to generate creative solutions in various industries. The specific centers are as follows:
- Deloitte U.S. Center for the Edge
- Deloitte Center for Energy Solutions
- Deloitte Center for Financial Services
- Deloitte Center for Health Solutions
- Deloitte Center for Regulatory Strategies
The company has established a strong brand as a result of its success. It has the second-largest professional services network globally in terms of revenues and is one of the “Big Four” accounting firms, along with EY, PwC, and KPMG.
It has over 225,400 employees serving over 150 countries and territories, works across 20 industries, and generated $35.2 billion in revenues in 2015. Its clients include 80% of the Fortune 500.
Lastly, it has won many honors, including recognition as one of the “100 Best Companies to Work For” by Fortune (2016) and as a market share leader by Gartner.
Deloitte’s main channel are the customer relationships of its partners. The company promotes its offerings through its social media pages, seminars, workshops, briefing series, webcasts, Deloitte Life magazine, sponsorships of sports teams and events such as the Olympics, and participation in forums and conferences.
Deloitte’s customer relationship is primarily of a dedicated personal assistance nature. Customers receive one-on-one guidance from its employees. That said, there is also a self-service component.
The company’s website has a section called “Detroit University Press” that includes self-help resources such as articles, reports, periodicals, infographics, and case studies.
Deloitte’s business model entails designing and developing problem-solving services for clients.
Deloitte maintains business alliances with over 45 leading firms through which it jointly develops solutions and services to benefit mutual clients. Specific partners include AT&T, BMC, Cisco, Dell, EMC, Guidewire, Hewlett-Packard Enterprise, IBM, Informatica, Kira, NetSuite, and Salesforce.
The company also operates the Innovation Partnership Program (IPP) in collaboration with Singularity University and the XPRIZE Foundation. Through this initiative it gathers Fortune 500 senior executives to learn from the brightest minds of Silicon Valley (entrepreneurs, technologists, innovators, and business strategists) and encourage them to come up with disruptive solutions. The program is membership-based and invite-only. Specific partners include Wells Fargo, Tata Communications, Dentsu, Genentech, Dow, Barclays, Google, Caterpillar, and Coca-Cola.
Deloitte’s main resources are its human resources, who include consultants, accounting professionals, and other professional services personnel with deep industry expertise.
Deloitte has a value-driven structure, aiming to provide a premium proposition through significant personal service. Its biggest cost driver is likely cost of services, a variable expense. Other major drivers are in the areas of sales/marketing and research/development, both fixed expenses.
Deloitte has one revenue stream, the fees charged to its clients for its selection of services. These fees vary by individual project and type of client.