Key Success Factors in the Accounting Industry - Case Study Example

Proposed Sports Accounting Firm (SAF) Student Name Institutional Affiliation Executive Summary The Sports Accounting Firm was created to serve emerging sports marketing firms. The sports industry is growing and sports marketing firms are increasing in number hence will require adequate financial planning. SAF will operate in Armidale Australia, but will open to nationwide jurisdiction with future growth. The company’s list of products include accounting, financial planning, audit services, bookkeeping and tax advisory services. This feasibility report describes the identified services that SAF will provide to its customers, the identified products, identifies competitors and their key success factors and outlines the operational plan for the accounting business. a) A description of the business The proposed Sports Accounting Firm will provide accountancy and related consultation within a specified industry. Accounting requires a high level expertise and formal qualification where the personnel who are providing accounting services need to adhere to accountancy best practices to lead their clients to positive financial gains. Accountancy industry has continued to grow and the industry is experiencing steady growth with more small firms increasing in number to serve the market of small and startup businesses. With a focus on the sports clients, SAF aims at providing services including auditing, accounting and bookkeeping with regard to financial reporting, taxation and auditing. Businesses, especially start-ups and small business require more cost-effectiveness within the current environment to succeed hence the need for best practices in accounting standards that SAF aims to offer. With regard to SAF’s target consumers, sports is a section of the entertainment market, which continues to grow. This section of the entertainment has not reached its equilibrium and the audience, fans, casual viewers, sponsors, sports talents and advertisers continue to increase in number in support of sports in several ways. Marketers have understood the growing popularity of sports and are using sports as the centerpiece of their advertisement projects. As the size of national and international sports continue to grow, the sports marketing sector responds with growth. Sports are speculated as events that continue to thrill and attract millions of people hence presenting opportunities for marketers to use sports events as prime platforms for delivering their client’s advertisement messages, (O'Reilly & Rahinel, 2006). Today, Australia is an established sports market. Established sports market means that the market is saturated and the sports teams, sports types and sports associations share a market hence there is little room for expansion even if the sports investors are going to introduce new products. In this context, Australia’s sport’s associations are realizing that green international sports market for this entertainment activity (Victoria State Government, n.d). China is the main destination for sports companies and China is soon becoming the main destination for sports entertainment market. The sports entertainment and sports products and brands are underdeveloped in China. Established sports companies in Australia are looking to explore the international markets that are promising high returns and as a way of improving their portfolio. It is with this reason that Online Sports Enterprise Market is developed to assist clubs, teams and associations look for specific international markets to expand their brands (O'Reilly & Rahinel, 2006). The first main target is China, which is growing its sports enterprise. Teams, clubs and associations that will establish in China early enough will have the advantage of acquiring a significant market share. The proposed company will focus on offering accounting solutions for the target market. The company saw a problem in accounting deficits among startups who want to take up the emerging sports marketing opportunities. Each sport has a specific audience and it is better for marketing firms to focus on a specific consumer market. Therefore, the goal of the firm is to offer adequate accountancy consultations that outline the best accounting standards for startups and small businesses within the sports marketing industry. Key success factors in the accounting industry There are seven standard key success factors in the accounting industry. The success factors include leadership, technology, learning organization, marketing and specific business development, high quality workplace environment, customer satisfaction and firm’s strategy execution. The seven factors listed above have long been used to relate to accounting firm’s management practices that make the accounting firms succeed in the industry. The identified seven factors work in combination to enhance accounting firm’s wide results in revenue growth, profit margins, clients satisfaction, technical experience, staff morale and tenure, professional reputation and enhanced brand value for the accounting firm (Barmouta & Buyya, 2003). The key success factors in the industry guarantees superior results. The most valuable key success factors among accounting firms is leadership. Leadership is valuable to accounting firms because this factor is the cornerstone for adhering to clear set of values, the company’s top management lead by example where performance evaluations are used to determine activity accountability. External Driving forces in the accounting industry The global body for professional accountants lists approximately 100 external drivers that impact the accounting profession. These external factors are considered under eight broad categories, which are economy, politics and law, society, business strategies, science and technology, environmental resources, best practices and the general accountancy profession. The external factors affect the industry in several ways (Fast Future, n.d). First, the critical issues of the economy and the general economic context has uniform demand across all industries and not only the accountancy profession. When the economy is positive, businesses grow in terms of revenue and new entrants into the market. For example, when the economy is positive, the sports business will grow hence increasing the client base that will need accounting consultancy services. Second, politics and law demonstrates the environment that allow free markets. For example, Australian political background is stable suggesting that both accounting firms and sports marketing companies can start and grow without political or legal interference because of the environment that supports new business startups. Third, business strategies are critical within an industry. For example, the accounting industry has a set of standard practices. These standard practices regulate the industry. Industry players find it valuable when they have readily available industry’s best practices that allow positioning. The fourth most impactful external factor is science and technology (Barmouta & Buyya, 2003). The accounting professions relies on technology for analysis of large financial data for the clients. The technology also impacts day to day tasks delivery for accountants and is cost-effective as an accounting firm. Firth, the accounting profession and accounting practices are regulated. The global body of professional accountants (ACCA) approves accountant’s training, develops and approves industry’s best practices that those in the association must adhere to. These guidelines are part of the external factors that influence the scope of the accounting business. Market profile Various strategies are employed to attract sports marketing firms as consumers of the accounting consultancy. The first strategy is developing accounting products and services that startups and sports marketing companies want so that they can enhance their businesses. Before accounting firm’s introduce their products and services, there must be a need from target consumers. In this case, the target consumers are sports marketing firms. Due to many advantages attached to sports activities the government has come up with a detailed outline to promote these activities. There is a recognition that sports activities is no longer more of leisure activities but is now viewed as a business entity by the state, (Flagestad, & Hope, 2001). It is evident that there is an increasing number of registered players in the Youth Soccer Association and the number sports types is increasing attracting more talented athletes. The government through the Australian Sports Commission has ensured that there is a continuous introduction of new sports activities, especially among schools and colleges. For example, there is an introduction of sports activities such as beach volleyball, Nordic skiing, bowling, rodeo, rowing and archery among several other gymnastic sports. An increase of broadcast and internationalization has made sports valuable brands and they are now making up a multi-billion dollar industry. The sports associations need to expand most of their activities to out of the country as especially to China as a way of strengthening their marketing linkages. The business bond between the two nations will become strong and eventually be fostering the economy of both nations, (Shank, & Lyberger, 2014). Arguably, China has a large number of basketball players, and if the two nations have collaboration in the sector, there is a likelihood that they will produce the best players in the world. Since the Asian nations have a large number of basketball players the U.S can use this route to market several sports products and attract high quality sponsors. Moreover, the government will be able to have an enormous increase in the number of followers and they can take the advantage of making it as a professional the way the China government is currently doing it. Thereby, increasing the size of their sports and in the end, promote their entertainment industry. For example, the media will have many activities to broadcast since they will have to provide coverage of what is taking place. Thus, providing a potential of profit making to the media sectors and increase the number of people employed, (Bradish & Cronin, 2009). The international broadcasting in the two countries will provide a good platform to increases sales of both the products and services of sports and entertainment. Competition in the Accounting Industry The Australian Accountants Directory lists approximately 11, 465 accounting firms that are currently operating in Australian. This number is large and the list is growing. This large number of accounting firms offer specialized services and they also have areas of jurisdiction. Therefore, for purpose of competitor benchmarking, market specialization, type of service and area of jurisdiction will be used to select the most appropriate competitors for SAF. SAF wants to venture in the sports industry and the company will be located Armidale Australia. Therefore, this analysis will considered accounting firm competitors and their strategic business maps within Armidale. The following firms are considered the direct competitors of SAF: Malcolm & Associates, Roberts & Morrow, and Skybridge Financial Armidale. Malcolm & Associates Malcolm & Associates chartered accountants offer personal and business accounting services. The firm has narrow product range, but their key success factors include enhancing superannuation for their clients. The company specializes in compiling annual financial statements and assists in meeting tax and compliance obligations with business law. Roberts & Morrow Roberts & Morrow are progressive Chartered Accounting practices that embrace technology among clients across Australia. This company’s success factors come from exemplary and personalized services provision for all their clients across a wide range of financial needs. The firm specializes on providing consultation for superannuation, financial planning, tax advice, accounting, auditing and estate planning. Roberts & Morrow associates have developed their customized technology that assists the firm in customizing accounting services for specific clients. Skybridge Financial Armidale This company is a leading financial services providing firm in Armidale and surrounding areas. The company specializes in assisting its clients with individual tax returns, taxation, accounting, superannuation, book keeping and financial planning. The key success factors for Skybridge is leading in accounting consultation assistance across five specific financial assistance for personal and business firms. OSEM Services positioning a) Customer value creation among sports marketing firms The current companies will introduced and develop the significance of consultancy accounting in the sports industry. The significance of SAF is connecting stakeholders within the industry. Due to the unlimited nature of opportunities available in the sports industry, this industry has opportunities for individuals, teams, advertisers, sponsors and associations. These opportunities will create the needs for accounting services that will be the backbone for financial planning. Emphasis of the significance of SAF accountancy services is to create a market value for individual, groups, teams, sponsors, association and advertisers in the sports industry within the Australian market segment. b) Sustainable competitive advantage SAF aims at providing consultancy to start-up firms. The company will focus on minimizing the cost of accounting services and enhancing total savings that will be an advantageous resource to start ups that are a target clients for SAF. c) The type of product that SAF offer SAF is offering a digital accountancy solution to its clients. This services is considered as providing functional problem solving strategy where sports marketing companies will develop a solid, up to date and future financial planning resources. The cost effectiveness that SAF will offer is associated with accumulating valid and reliable financial reports that can be used to obtain funding for startups. d) The Unique Selling Proposition SAF is using the following USP “SAF, Redefining sports accounting partnership for new markets”. The USP will be the slogan that will be used to advertise SAF to the market of target audience within Australia as a way of developing a marketing branding strategy. OPERATIONAL PLAN SAF will have limited physical asset. The company will start with leasing out a two room office, which will be located in 137 Beardy Street Armidale. The company will start with three employees who will be accounting professionals. After establishment, the company will employ a marketing professional who will development marketing campaigns for the company. Most of the activities of the company will be done online using customized resource planning software and platform. The company is planning to use the website as the business location. A cross functional website portal will be created to integrate the company’s activities. The choice of using an e-commerce website is to enhance the business competitive advantage and synergies that the company is promising. The market of the company’s products will occur across the globe, but the target customers and audience are in Australia showcasing the importance of developing a flexible global sales force. The online platform will have better asset utilization, which will be effective and convenient within the supply chain. The potential of the online system to the company and to the customer is provision of enhanced strategic positioning as part of the key branding and provisions of the strong synergy potential. Higher leveraging exists within a high level of physical and management assets potential. The disadvantages of the online e-commerce system is getting to change the culture of athletes, clubs, associations and sponsors interactions. Also, the target audience have already developed ties to each other and it may be difficult to break the ties and bring the business online from the traditional brick and mortar industry. Also, the target consumers may not trust the online platform as much as they trust the brick and mortar industry interactions and this brings the differences in attracting potential customers to the online platform (Van, Quick, & Daniel, 2002). The online e-commerce website is not considered as cost effective because the advertisement and marketing required during launch is costly. Creating and maintaining a high valuable e-commerce website is costly. Service process The online process is based on the portal’s composite pattern. This pattern utilizes a combination of patterns and integration of patterns that results to a complex and advanced e-business applications (See fig 1). This site will be profile-based where users, athletes, sports associations, teams and sponsors develop their profile. The purpose of developing high valuable profile is to attract to use the platform as one of the marketing platforms. This will be a free service to the clients of SAF. For example, a high profile AFL and Rugby Union super star marketer’s profiles will attract a high profile garment companies from China that will use the signature of the athletes in their products and that means a success factor for the marketing company. Also, a high-level profile sponsor will attract a high-level profile athletes who knows that the sponsor will improve this employee’s particular career. Figure 1: SAF integrated E-commerce platform Flow Chart The SAF system will house the following stakeholders. Sports marketing profiles, sponsor’s profiles and market offerings. Information will flow as described in the flow chart below (see fig 2). Figure 2: Information flow at the SAF website In the flow chart presented, the sports marketing companies will communicate to the sponsor’s through the SAF website. There will be no direct communication until the SAF management approve direct communications. Communication approval is done upon developing a strategic financial plan for the companies’ profiles. The purpose of communicating through the website is to ensure that those communicating are verified and genuine interests in sports marketing and they have the required investment to deal with more serious clients. Athletes, individual teams and association will visit the website for opportunities. If they find an interesting opportunity they will create their profiles and inquire about the opportunity through the SAF customer care who will introduce the athletes to the sponsor client. On the other hand, the process of communication will be utilized from the sponsor’s side. If it is a sponsor who has developed the interest to the athletes or team, this sponsor will utilize the same process of communication through the website to reach their potential athletes or teams. Cost of creating an E-Commerce website and maintenance The SAF E-Commerce website will be created from scratch. The website will be considered as a project for the company hence will require project planning methodology. In this report, it will be sufficient to indicate the project’s program’s cot and the outline of the project planning for the proposed website. This project activities and cost are developed in table 1 below. Project activities Estimated project cost E-Commerce website creation consultation $600 Project planning $1000 Project Development $20,000 Yearly technical maintenance $600 Employee to work as customer service agents Variable Regulations of Sports Marketing platforms in the Australia SAF will be classified as an online business. The company will require an Australian Business Number (ABN) and a Tax File Number (TFN). These two numbers affect small business in Australia and ensure that business comply with regulations in their respective industries as well as protect the property and intellectual rights of business owners. Market, product and technical feasibility of the service idea Sports teams expect changes with regard to marketing in the future. Today, sports teams want more revenue and they can do that through looking at the outside market. More sports organizations want more than quantitative side of their respective sports. Predictive modeling points towards expansion to outside market and creating more products within each sports brand and within each team’s capacity, (Peachey & Bruening, 2011). This competitive advantage that SAF is considering is the efficient of connecting athletes, teams, organizations and sponsors who seem to have more opportunities for the sports services offers. This current proposed business means big opportunities to sports services providers in Australia who will find it difficult marketing their talents to the global market that needs them. The proposed business project utilizes high quality data that was gathered in the field to determine the needs of the athletes, teams, sports association and the sponsors who have un-insatiable needs of talents. The business will utilize the online platform that has never been created to connect sports services providers and their potential sponsors. This business is a low capital venture with high prospective returns. The management of the business has experience in business consultancy industry and want to use that opportunity to bring a long awaited solution to sports investors in the Australia. Reference Bradish, C., & Cronin, J. J. (2009). Corporate social responsibility in sport. Journal of Sport Management, 23(6), 691-697. Barmouta, A., & Buyya, R. (2003). Gridbank: A grid accounting services architecture (gasa) for distributed systems sharing and integration. In Parallel and Distributed Processing Symposium, 2003. Proceedings. International (pp. 8-pp). IEEE. Flagestad, A., & Hope, C. A. (2001). Strategic success in winter sports destinations: a sustainable value creation perspective. Tourism management, 22(5), 445-461. Fast Future (n.d). 100 drivers of change for the global accountancy profession. Accountancy Future Academy. Retrieved on May 4, 2017 from https://www.imanet.org/-/media/e5fedb5944d743b4bb185b2443ca9d55.ashx O'Reilly, N., & Rahinel, R. (2006). 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