Business Case Analysis - Essay Example

The accounting industry was controlled by the Big Six firms. These six firms in 1994 obtained $33 billion of the total $43 billion in revenues that the industry generated. One of the advantages of forming Nexia International was that it increased the market presence and branding value of the company. The use of a branding strategy can help attract a lot of business because it creates a reputation and recognition that can be used to gain a competitive advantage. A second advantage of the creation of Nexia International was that the company expanded its reach and clientele base.

Accounting services to a certain extend are homogeneous products that can be easily transferred to other marketplaces. A disadvantage of the formation of Nexia International is that the company increased its overhead due to the fact that the company needed more employees, managerial talent, and physical infrastructure to handle the expansion. Another disadvantage associated with Nexia International is logistical challenges and constraints. Nexia International faces many strategic challenges. The company has not figured out how to effectively take advantages of its resources to serve an international clientele base.

One of the issues that have made things harder for the company is the fact that the different Nexia firms across the world are not communicating or cooperating well with each other. On many instances instead of giving a referral to a Nexia establishment in another country the firm that gets the contract prefers to create a subsidiary in the country to keep the contract themselves. The executive management team of the company lacks the authority to intervene with the network partners. The international management team has little influence over the actions of the members of the network.

The efforts of the offices of Nexia across the world do not seem to be coordinated. In the case study I did not see any evidence or statements in regards to the marketing, public relations, and advertising efforts of the company. For the company to build its brand value and attract many customers the firm has to change its marketing strategy. The company has to become more aggressive and proactive in its marketing efforts. Due to the intense competition in the accounting industry Nexia International has to differentiate itself to ensure that the firm is able to attract and keep more customers.

The biggest threat to the company’s effort is the existence of the Big Six firms. These firms are taking the majority of the business away from small and medium size accounting firms such as Nexia International. Nigel Hodges has the opportunity to transform Nexia International to convert the firm in one of the industry leaders in the mid-tier category. I was astonished when I read that the company does not have the capability at all its locations to prepare computerized financial statements and audits.

A firm that generated $562 million in 1994 had sufficient income to make the necessary investment to improve the software and information technology capabilities of the company. During the 1990s the cost of technological computers solutions was higher than in the 2012, but there is not excuse for the lack of compliance by Mr. Hodges in keeping up with the technological trends in the accounting industry. The firm has to make the capital investments necessary to update the information system of the company.

If the firm lacks the cash