Company organizations and the largest professional services network

Company
context

1.     Description of the company

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Deloitte is
one of the “Big Four” accounting organizations and the largest
professional services network in the world by revenue and number of
professionals. By the end of 2017, the company earned a record $38.8 billion
USD in revenues. As of 2016, Deloitte is the 6th-largest privately-owned
organization in the United States.

Deloitte has
been ranked number one by market share in consulting by Gartner, and for the
fourth consecutive year, Kennedy Consulting Research and Advisory ranks
Deloitte number one in both global consulting and management consulting based
on aggregate revenue.

“Deloitte”
is the brand under which 263 900 experts and professionals worldwide team up in
independent consulting firms to give audit, advisory, tax, financial advisory
and risk management services to its clients in the following industries:

·        
Consumer and industrial products

·        
Energy and resources

·        
Public sector

·        
Life sciences and health care

·        
Financial Services

·        
Technology, Media and Telecommunications

These
organizations are members of Deloitte Touche Tohmatsu Limited
(“DTTL”), a UK private restricted risk organization (“UK privately
owned business limited by guarantee “). Every member firm provides services
in a particular geological zone by watching the laws and expert controls in
drive in the nation or nations in which it works.

Every member
firm of Deloitte Touche Tohmatsu Limited is organized as per national
legislation, regulations and practices and can offer expert services to its
region through subsidiaries, affiliates and other entities. Not all member
firms provide these services, and a few members may not be accessible for our certification
clients under public bookkeeping regulations.

DTTL and its
member firms are separate legal entities. DTTL and each DTTL member firm must
be held responsible for their own particular acts or omissions. DTTL (otherwise
called “Deloitte Global”) does not offer services to clients.

As more companies and institutions do business in
Africa, Deloitte tries hard to provide clients with a consistent service
through the OneDeloitte approach.

Deloitte is one of Africa’s leading professional
services firm, with offices in 33 African countries, a current presence in 45
and the ability to serve 52 nations on the continent.

Deloitte has
been present in French-speaking African nations for more than thirty years:
Maghreb, West Africa and Central Africa.

Deloitte is
present in Tunisia through two offices, both members of its network:

·        
The firm DELOITTE CONSEIL TUNISIE carries out consulting missions.

·        
The firm MS LOUZIR carries out audit missions.

Deloitte
offers services to its Tunisian and foreign clients. These two firms help
Tunisian companies to contribute to the economic growth of their country and
support foreign companies in their establishment and development in Tunisia.

2.     Mission and Objectives

Deloitte is a
purpose-led organization. In 2015, that purpose was put into words to inspire
Deloitte professionals and help them achieve Deloitte’s global strategy of
being the undisputed global leader in professional services.

The Purpose statement
says:

« Deloitte makes an impact that matters. »

Deloitte’s desire
to make a positive, enduring impact every day for their organization and
stakeholders requires:

·        
Serving clients with quality and distinction, making a
measurable and attributable impact.

·        
Inspiring their employees to deliver value—mentoring
and developing future leaders and colleagues for life.

·        
Making a contribution to society, building confidence
and trust, upholding integrity, and supporting the community.

·        
Leading the profession by challenging themselves to do
what matters most, delivering innovative ideas that reflect their unique
capabilities.

These
Purpose-driven behaviours are guided by their network’s shared values—integrity,
value to markets and clients, commitment to each other, and strength from
cultural diversity.

For Deloitte, good isn’t good enough.
They aim to be the best at all that they do—to help clients realize their
ambitions; to make a positive difference in society; and to maximize the
success of their employees.

(https://www2.deloitte.com/global/en.html)

 

 

3.     Industry structure

Accounting
firms compete in gatherings. Big 4 firms compete against each other for the
corporate work with other top twenty firms trying to get a tiny piece of the
cake.

The top 100
are generally competing amongst themselves for mid-market clients. Everyone
else is either competing in market niches or in geographic areas.

The oligopoly
of the top four largest consulting firms, all with a history in the
accountancy sector, known as the Big Four (Deloitte, PwC, Ernst and
Young and KPMG), hold 40% of the total consulting market that is worth
$125 Billion.
They all work with big clients and they’re all global.

According to Stevan Rolls, a UK-based
partner for global talent at Deloitte:

“The Big Four are pretty similar in
that they’re all large professional partnerships and have a lot in common, but
there are important structural and cultural differences too.”

(https://news.efinancialcareers.com/uk-en/204621/working-for-the-big-four-pwc-deloitte-ey-kpmg)

 

 

Compared to
ten years ago, the Big Four firms have widely increased their market share,
through organic growth and numerous acquisitions. The top 10 consultancies own
52% of the market, while the top 200 service providers with consulting services
hold 79% market share, suggesting a non-fragmented and consolidated market
according to the Consultancy.uk analysts.

 

 (https://www.consultancy.uk/news/2149/10-largest-management-consulting-firms-of-the-globe)

Global consulting market between 2012 and 2014 in
terms of market size and market shares

Source : https://www.consultancy.uk/news/2149/10-largest-management-consulting-firms-of-the-globe

 

 

Revenue, revenue growth and market
share of the 10 largest consulting firms in the world between 2013 and 2014

Source : : https://www.consultancy.uk/news/2149/10-largest-management-consulting-firms-of-the-globe

 

 

Porter’s Five Forces analysis

In the management consulting field,
the environment is competitve, yet is sufficiently substantial for different
players to enter and contend. Be that as it may, the capacity to do this viably
relies upon many variables. Huge firms regularly adopt the strategy of offering
claim to specialty services on an extensive scale. Deloitte, fills in as a
generalist who can convey strategy through implementation
services on a high scale. Then again,
boutique firms may use evaluating power or a more individual way to produce
benefits.

 

While the consulting marketplace is
entrenched, it is a long way from perceiving market saturation. Fracture still
exists, as the demand for consulting needs far outpaces the capacity of even
the biggest firms to fulfill. Be that as it may, the reason for competition is
comparable no matter how you look at it. The cost of services is reasonably
inside the market price range, with firms holding great eminence in their field
by retaining and building a clientele base. Opponents hoping to have a piece of
the pie are regularly compelled to go up against contenders at their own game,
instead of differentiating themselves with distinctive knowledge. Deloitte, for
instance, endeavors to be the pioneer in perceiving changes in the market;
picking up a solid foothold before other large contenders can do so. Slow pokes
are compelled to differentiate themselves by offering a lower price, better
ability, or a superior technique outfitted towards the individual client.
Deloitte was able to differentiate itself from the competition by being a
one-stop shop for all consulting needs and by acquiring firms that were more
skilled in areas where they did not have great market penetration.

At long last, Deloitte has
accomplished economies of scale as by high margins and low overhead; lessening unit cost.

Original thoughts, for example, those depicted above, are imperative in an
industry where there are a couple of barriers to entry, however several hindrances
to stay in it. The greatest boundaries have a tendency to be the capacity to
contend with top-level firms, (for example, McKinsey, Bain, and Boston
Consulting Group). These organizations, while charging higher costs, set up
obstructions through information and customer connections that new contestants
are no able to copy. While the required costs 
to enter the consulting field are not high, industry knowledge is the
most important item. Indeed, even the most prepared advisors, starting their
own independent firm, will not have the assets and proprietary data that
extensive firms have developed over numerous years with a diverse customer
base. Accordingly, new participants are compelled to grow by going up against
smaller clients. Deloitte is regularly ready to expand incomes not through how
they can affect a particular customer, but instead their breadth of past
clients. Notoriety and reputationin this field are absolutely critical.

One of the greatest drawbacks to having the capacity to consistently
contend is the loss of talent. The very notoriety of the firm that builds a
customer base streams down to the experts. These experts frequently gain a
reputation that is firmly connected with their firm. Accordingly, organizations
will hire advisors. This is a substitute that spares them costs, as they can
accumulate comparative mastery without the price increase. This forces
consulting firms to consistently hire and grow new talents to balance this pattern.
A challenge to holding talents is the extended hours and  frequent travelling that is expected of
advisors. It is hard to hold these people for the life of their career.
Deloitte has constantly endeavored to adjust the work-life balance with a
specific end goal to shield representatives from moving on. At Deloitte, it is
uncommon that a professional will move to an alternate firm. It is
significantly more probable that they leave to take a position with a previous
client. Deloitte, and its rivals, must contend not just within themselves for
contracting new talents, (for example, MBAs), however with different
organizations, too.

 

Because of these endeavors to get their own ability to enhance company
strategy, buyer bargaining power remains moderately high. A substantial aspect to
the degree in the case of whether consulting firms can keep on producing
benefits depends on a few components. In the first place, the size of the
client is indispensable. Accenture, for instance, could battle off the negative
impacts of the recession (in any event contrasted with numerous other publically
traded organizations) by serving vast companies. While these companies had
suffering income, it was as of now that they required experts the most. Boutique
firms devoted to smaller organizations frequently did not have this
extravagance. The second angle to fighting off buyer bargaining power is the
passageway to new ventures. Amid the downturn, the government kept on spending
a lot of cash on consulting. Deloitte’s buyout of Bearing Point amid that time
demonstrated that development was conceivable, even in poor monetary
conditions. This outer factor, the prerequisite for governments to be more
proficient and deliver clean monetary records, was a shelter to Deloitte.

While buyer bargaining power is a bit complicated, supplier bargaining
power in this industry is less demanding to understand. The biggest providers
are the consultants. Firms with great notorieties have strong recrutement
processes, allowing them to acquire the best talents. Supply for new talent is
infrequently short for these organizations. Nonetheless, as examined prior,
holding this talent can be a daunting task. Firms, for example, Deloitte put an
expansive accentuation on training. Deloitte University is opened in 2011 and
goes about as the center point for all consulting training in the United States.
Also, proceeding with training hours is required, as is organizing events and
firm improvement. The objective is to make a superior expert but keeping in
mind the end goal to hold top people.

 

Set up consultling firms have an extraordinary place in the market. Amid
monetary downturns, they tend to toll superior to other companies, as their
expertise is required like never before (a low-overhead structure utilized by
firms, for example, Deloitte, is useful too). As economies recuperate,
enterprises will spend more on these services so as to pick up an edge. The
objective of consulting firms is to dependably remain no less than one stage in
front of the industry. Regardless of the back and forth movements, there are
always ways by which a built up firm can keep on improving its place inside the
market.

 

SWOT analysis

 

 

Market segmentation of the Financial advisory services department

 

 

Marketing mix

Product

Clients depend on member firms of Deloitte to provide them with services
that will help in transferring risk to the actual possibility. Deloitte has
several independent firms collaborating with each other to provide products and
services that include :

·        
Consulting- includes services in short-term outsourcing,,
human capital, operations & strategy, technology integration and enterprise
application

·        
Audit- Provides audit and accounting services, IT control
assurance and internal auditing

·        
Risk Advisory- Offers business-continuity management, project
risk, integrity and data quality, privacy and information security and
enterprise risk-management

·        
Financial advisory- Corporate finance services related  including commercial and personal bankruptcy,
conflict management, document review, due-diligence, advisory, capital projects
valuation and consulting services

·        
Legal & Tax- Provides help to clients by undertaking
global tax activities and transfer pricing of multinational companies,
increasing the net-asset-value, minimising taxes, providing advisory related to
tax implications and implementing tax-computer-systems

Place

Deloitte has about 244,000 employees
working under its various companies who provide professional help to its
clients. Its network is spread over one hundred and fifty countries. In the
beginning, the organisation and its member firms were held together as an
unincorporated association, but in 2010, they all came under the umbrella of
Deloitte Touche Tohmatsu or DTTL, a private company from the UK. Each member of
Deloitte keeps its independent and separate legal entity and is subject to
regulations and laws of the country where it operates.

Promotion

Deloitte believes in promoting the
company through the quality of the services that it offers. They also promote
through the newspaper, magazines, internet, etc. They are a company who
believes that if you provide the required quality of services then there would
be no need of promotion.

Deloitte has also performed CSR activities to allow the people to know
about the company and spread the name of their name among those who are not aware
of them.

 

Price

The pricing strategy is
dependent on the required solutions, the manpower used, the geographic location
etc. Deloitte are willing to charge high for the products but they also focus
on offering high quality services to their clients. Deloitte has a variety of
services to offer and each service is charged differently depending on the
areas where the services is provided. The international services are charged
higher than local ones.

 

1. Internship Context and
Topic

The internship
has been carried out in the Financial advisory department which has an
essential role in Deloitte. It conducts financial analysis, firm valuations,
due-diligence missions, mergers and acquisitions, builds financial models and
develops business plans and project finance reports for buy-side and sell side
clients whether they be businesses or high net worth individuals but also for
new market entrants. It ensures the industry analysis, business plan development,
modification, adjustment and update, applying different firm valuation
techniques in order to determine the intrinsic value of a company and provides
investors with insight and recommendations regarding their investment decisions
but also offers the possible to provide them with an integrated service by
working jointly with the tax, legal, risk advisory, consulting and auditing
departments.

 

Basically,
the financial advisory team focuses on recommending investment products and
services that are fit for prospects and clients based on their objectives,
resources, time horizon, risk profile, and preferences, executing and
negotiating the follow through of implementation tools including insurance,
investments, tax planning, debt management, and other tasks quoted to client,
deciding how to build your practice by choosing your clients and the markets
you want to pursue, soliciting clients actively via telephone, mail, referrals,
meetings etc and maintaining the proper documentation that follows pre-set guidelines
established by compliance and management while complying with all industry
rules and regulations.

 

In perfect compliance with this context, our project
aims to advise Deloitte’s client, BX insurance company, interested in investing
in AX who is a service provider, that has recently initiated an OTC process
concerning an opening in its capital. The target company (the seller) has asked
a Tunisian investment bank to assist it in the process of opening up its
capital in order to collude with one or more of its technical partners. In
order to advise the client about his investment decision, MS Louzir (Deloitte),
financial advisory department, aims to provide its client with a financial
analysis and valuation of the service provider AX.

In
order to be able to estimate a realistic value of AX, we will conduct internal and
external analyses of our target company based on the electronic data room
provided by the investment bank to Deloitte for analysis purposes, detect risks
of the target company and describe the provisions that need to be made, valuate
AX using various firm valuation methods and providing the investor with the
real intrinsic value of the target firm in order to allow him to make the best
investment decision possible.

 

Thus,
this financial analysis and firm valuation process consists of 6 steps. First,
we will consult the information provided by the investment bank, run internal
and external analyses of the target company using the SWOT analysis and
Porter’s 5 forces techniques. We will then review the provisional accounts
already established for future years including the assumptions supporting them
and adjust them to make them more realistic and better reflect the future
expectations of the industry and the market in general. In order to conduct the
firm valuation, we will start by identifying comparable companies listed in
countries in the region with similar characteristics and then we will run a comparables
analysis of the firm. After that, we will develop a discounted cash flow model
and determine an indicative range of the company’s values based on the values
found using these two techniques.

 

Our report aims to provide Deloitte’s client with all
the information that is relative to the target company and an estimation of its
current value in order to allow him/her to carefully decide whether it is a
good investment or not and also to have the necessary negotiation arguments if
he/she decides to proceed with the investment transaction.

 

2. General and specific
objectives of the Internship

Based on the Mediterranean School of Business’s
internship guide, we can say that: « The
Internship program recruits highly qualified Master’s students in order to
train them, with the opportunity to incorporate them into full-time employment
upon graduation…The internship program objectives are:

• Produce competent and
contemporary business managers.

• Develop an analytical
approach for problem solving and decision-making.

• Enhance and foster
enthusiastic and persuasive writing and oral communication skills. »

Along these lines, the principle goal of the
internship is to get a genuine vision of professional life and have a solid
approach of theoretical ideas and knowledge gained along the 3 semesters at MSB.
It is additionally a necessity to approve the Master’s degree.

The result of this internship is to deliver a report
that deals with a particular subject that might bring an added value to the
hosting organization.

Additionally, general purposes incorporate creating
business contacts, meeting some of the important professionals of the industry
to increase the possibility of acquiring a potential employment position
identifying the most suitable career by watching the various management and
leadership styles inside the hosting company.

The internship position causes the student to learn
how to deal with and manage various types of individuals inside the work place and
to improve his/ her interpersonal abilities with associates, colleagues,
clients and partners.

Our report aims to provide Deloitte’s client, BX
insurance company, interested in investing in AX who is a service provider with
a clear understanding of the financial, risk, and overall current conditions of
the target company to ensure that he/ she has all the necessary information
that will facilitate the investment decision that is about to be made.

3. Assigned Tasks and
Responsibilities 

As an intern in Deloitte, my personal task was working
on a project aiming to conduct a financial analysis and firm valuation of a
target firm that has recently had an opening in its capital for Deloitte’s
client who is interested in acquiring these newly available shares.

To define the subject of this report, I had to speak
to the manager of the Financial Advisory department and some of my colleagues
in order to find out about their current needs and missions that I would be
able to participate in, taking into account the confidentiality restriction
that I was facing as an intern.  

On 18 January 2018, I had the opportunity to attend an
important training session along with all the financial analysts and managers
of the Financial Advisory department discussing issues related to the
calculations of net debt and adjusted net debt that are very important
considerations to take into account when conducting due-diligence and adjusting
the financial statements of a company in order to have more accurate valuation
results.

During these last three
weeks, the tasks that were assigned to me were mostly about conducting industry
analyses, translating client presentations, understanding the specific