Businessmodel of KPMG

Customer Segments

KPMG has a mass market business model, with no significant differentiation between customers. The company targets its offerings at firms of all industries and sizes desiring audit, tax, and advisory services.

Value Proposition

KPMG offers three primary value propositions: accessibility, performance, and brand/status.

The company creates accessibility by offering a wide variety of options. It has actively pursued acquisitions in order to expand into new areas. Acquired companies include Link Analytics, a provider of scalable business analytics applications, and Cynergy, a provider of mobility services and digital experiences. These moves have enabled it to add new capabilities to its portfolio.

The company has demonstrated strong performance through results for clients. High-profile examples of this include the following:

• Helped a global industrial manufacturing conglomerate develop a logistics target operating model to help save it $100 million in three years
• Created benchmarking and scenario models for a recently acquired HVAC manufacturer that identified opportunities for it to save 11% in operational costs
• Transformed the retail sales process for a top wireless provider, which in turn increased sales reps‘ engagement and output
• Overhauled and updated Cigna’s financial and IT instructure, facilitating easier financial reporting at a lower cost
• Developed and implemented a human capital management system for Baylor Scott & White Health that had reduced manual activity and cost of ownership The company has established a powerful brand as a result of its performance. It is one of the “Big Four” audit firms, along with Ernst & Young, Deloitte, and PwC. It generated $24.4 billion in revenues in 2015, up 8.1% from the prior year. It has over 174,000 employees operating in 700 offices in 155 countries. It serves over 80% of the Fortune Global 500 and over 75% of the Forbes Global 1000. Lastly, it has won many honors, including ranking as #2 in the “World’s Best Outsourcing Advisors“ list by IOAP (2011), induction in the Working Mother Hall of Fame (2011), International Tax Review Asia Tax Awards (2010) and ranking as #2 in Consultancy Rankings by OpRisk & Compliance (2009).

Channels

KPMG’s main channel are the direct customer relationships of their partners. The company also promotes its offerings through its social media pages; webcasts; sponsorships of athletes such as Phil Mickelson, Stacy Lewis, Magdalena Forsberg, and Alexandre Bilodeau; and attendance of conferences.

Customer Relationships

KPMG’s customer relationship is primarily of a dedicated personal assistance nature. The company has its teams work closely with clients to solve their problems. It also offers “KPMG Learning”, a program consisting of training and executive education classroom courses covering various industry topics. Most of the courses qualify participants for continuing professional education credits. KPMG also provides phone and e-mail support as well as an International Hotline for more serious concerns.

Despite this orientation, there is a self-service component. The company’s website offers online versions of its classes as well as web-based self studies. It also includes a section called “KPMG Institutes” that features self-help resources such as articles, reports, podcasts, and webcasts on emerging industry trends, risks, and opportunities. Furthermore, it includes a glossary and a feature called “TaxNewsFlash” that offers summaries of recent tax developments.

Key Activities

KPMG’s business model entails designing and providing problem-solving services for clients.

Key Partners

KPMG maintains the following partnership programs:

Strategic Alliances – The company works with top service and technology providers to develop solutions that benefit its clients in areas such as data and analytics, regulatory change, disruptive technology, cyber security, and transformation. Specific partners include Microsoft, IBM, SAP, Oracle, Dun & Bradstreet, Flexera Software, Appian, Coupa, MetricStream, Nuix, and Thomson Reuters.

KPMG Capital – The company invests in other firms in order to foster innovation and commercialize new software solutions leveraging its strengths. Specific partners include Bottlenose, Astrus, Customer Compass, Financial Microscope, and Label Insight.

Key Resources

KPMG’s main resources are its employees, who include accounting professionals, consultants, and training specialists. The company also maintains important physical resources called Global Innovation Hubs. One type of hub is its collection of “Insights Centers” that enable customers to interact directly with their data and watch solutions come to life.

These are located in London, Frankfurt, Paris, and Hong Kong, with additional locations planned for Sydney, Melbourne, and New York. Another type of hub is its set of “Insights Labs”, research and development facilities where data scientists investigate D&A applications, incubate ideas, and develop proofs of concept while creating technology for use across regions and functions. They are located in the U.S., UK, and India.

Cost Structure

KPMG 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 customer support and operations and sales/marketing, both fixed costs.

Revenue Streams

KPMG has one revenue stream, the fees charged to its clients for its range of services. These fees vary by type of client and individual project.