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Home / Questions / Case: Accenture You may have heard of the Arthur Andersen debacle (involving its doubtful ...

Case: Accenture You may have heard of the Arthur Andersen debacle (involving its doubtful Enron accounting practices and other problems) and the company's demise. Originally, the Andersen Consulting

Case: Accenture You may have heard of the Arthur Andersen debacle (involving its doubtful Enron accounting practices and other problems) and the company's demise. Originally, the Andersen Consulting group was formed as a consulting arm of Arthur Andersen, the huge accounting firm. You might think that Andersen Consulting changed its name to Accenture because it didn't want to be associated with the Arthur Andersen accounting scandals, but that's not how it unfolded. The Andersen Consulting group had been pulling away from the Arthur Andersen accounting firm for some years. A legal decision accelerated the split, necessitating a new name and identity for Andersen Consulting. After that, it was just timing and serendipity. The Arthur Andersen troubles surfaced only after Andersen Consulting became Accenture. Thus, while Andersen Consulting's name change was initiated for different reasons, the disassociation of Accenture from Arthur Andersen was a huge by-product of the change. Win-win! Let's examine the name change. Andersen Consulting became Accenture on January 1, 2001. If the consultancy had been a soft drink, it would have said, "Same great taste, new packaging!" After all, it was still offering largely the same services in the arena of business-to-business marketing: consulting with specialties in technology, systems integration, reengineering, and outsourcing. Yet it was disposing of the old brand name. Usually a new name is the result of a company entering into a new market, or it is motivated by the merging of two companies. In this case, the legal system required the Andersen Consulting group to spin off and separate from Arthur Andersen, the accounting arm. Imagine that. At the time, the legal decision probably annoyed the consulting group. The top executives probably worried that giving up the Andersen Consulting name, which had served them so well, would result in a loss of short-term business. The name had a strong positive brand equity based on a strong positive heritage and reputation in the business marketing world. Andersen Consulting managers knew the power of branding. Yet given the subsequent developments with the accounting arm of the business, the name change was indeed a very fortunate move. Given that the Accenture brand name sounds so different from the Andersen Consulting brand name, few clients or potential clients would connect the two-and, hopefully, none of the negative practices, exposure, or baggage of Arthur Andersen would contaminate the newly named Accenture consulting group. Choosing a Brand Name Accenture wanted to be all that Andersen Consulting was and more. Andersen Consulting had a strong brand name in part because its work was good. However, just being good was not enough for you or me to have heard of it because it was good in B2B services, not consumer services. We heard of Andersen because it had done a thing rare in professional services circles: It had advertised. Was all that money spent building the Andersen Consulting brand name wasted with the name change? No. In the advertisements announcing the name change, the company tried to show the
transition. For example, one ad created for the transition by the Young & Rubicam advertising agency showed the name "Andersen Consulting" with the page looking torn to reveal what looked like the next page, which read "Reborn" and "Renamed." Such ads began to illustrate that what had been Andersen was gone and that now Accenture stood in its place. The emphasis was on the new, but Accenture wanted people to understand its relation to the former company so that it could transfer as much of the old, positive brand equity as possible. When the legal decision came down that the company had to split away and cease and desist using the Andersen Consulting name, a scramble ensued to think up a new and good brand name. The company started in-house, obtaining some 2,500 name recommendations from employees; the side benefit that it got employees thinking even more about forthcoming corporate changes. Next, the company narrowed the list by deleting names it couldn't use (for example, those that were already trademarked or registered online) or shouldn't use (say, those that wouldn't translate well internationally). The partners selected from among the 29 final names and chose "Accenture." They believed that this name captured the brand essence of what they wanted their clients to think about when choosing Accenture for their consulting services. The "Acc" in the name connotes accomplishment or accessibility, and the name sounds like "adventure." Thus, to choose a brand name, you first need a vision. Not just any name will do. In this case, Accenture wanted to use the name change as an opportunity to express its strategy to reposition itself in the marketplace. Beyond the name change, it wanted to tell the bigger story that it would be offering even more services for clients. Yes, it would continue to provide consulting and technology expertise, but it would also provide advice on alliances and venture capital. Marketing Once Accenture decided on the new name, it had many changes to make—from stationery to Web sites to nameplates to flags, and much more. The new services it was providing (for example, alliance expertise) were included in the tag lines. It worked to educate clients that it was adapting to their needs. After spending some $175 million on the rebranding efforts, Accenture achieved almost the same level of brand awareness as its former Andersen Consulting name had (but with none of the negative baggage that the Arthur Andersen group would have brought). The Company Now This professional service consulting firm continues the excellent heritage of its predecessor, Andersen Consulting. Any time Accenture does anything, businesspeople take notice. For example, according to recent Accenture studies: The Global 1000 is expected to grow its marketing expenditures from $825 billion to $1 trillion. Why? The spending is targeted predominantly at customer relationship management (CRM) investments. Firms want to find and target their most profitable
. customers, maximizing their share of wallet and improving their average lifetime revenue per customer. This huge expenditure is in part attributable to the increasing difficulty of getting the attention of customers and having an impact on their attitudes. Accenture points to trends such as multiple media, resulting in the fragmenting of marketing audiences. These days, a consumer is confronted with some 3,000 marketing messages a day, compared with an estimated 650 just 20 years ago. At the same time, return on marketing investment is declining. For example, response rates to direct-mail solicitations for credit cards was a measly 3 percent in 1992 and has now dropped to 0.5 percent. Further, while large CRM investments are required to achieve the aforementioned marketing goals, business executives are facing information technology (IT) investments with increased skepticism: "Don't we have big enough, fast enough computers already?" Accenture is getting together with some big IT players (such as Cisco, Hewlett-Packard, Intel, Microsoft, and Xerox) to form the Information Work Productivity Council, which will address this "prove it" attitude emanating from the boardroom. If companies are paying more for equipment, they're also paying more to hire and hold onto good people. A global Accenture study showed that the number-one priority among business executives was to attract and retain skilled staff. Finally, online is still all the buzz. Accenture identified two of the factors that explain most of the potential and promise of online exchange: (1) aggregation (the opportunity for one firm to do business with a large number of buyers and sellers) and (2) integration (the ability to communicate across organizations and link buyers' and sellers' processes). . . Accenture has credibility people believe their statements and estimates. Further, when Accenture says something like "Other firms in your industry are growing their marketing spending," it makes firms think "Well, then, we must do this also." Accenture makes things happen. Questions 1: What core service does Accenture offer? What supplemental services? 2: What are the b2b marketing tangibles and intangibles that a consulting firm delivers ? 3: How does the client know it's getting its money's worth from the services that Accenture delivers? 4: What makes branding difficult for a professional service within the b2b spectrum? Why is it critical to the firm's success?

Apr 13 2021 View more View Less

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