Strategic Management of Basil Construction Company - Case Study Example

TITLE: Strategic Management Report Of Basil Construction Company 1. INTRODUCTION: As far as the construction industry is concerned, studies reveal that, with the passing years, the relationships in the industry are altering. There are greater demands for the construction products that include motorways, railways, and airports. With greater demands, there are greater dissatisfactions among the customers that are being reported in the industry as well. There are several uncertainties and costs involved in designing of buildings while a plan is being executed. Thus, every organization needs to focus on taking innovative measures such that challenges affecting the successful implementation of work may be overcome. This would require the construction companies to think differently on the measures of construction, add value to the current jobs, benefit from the knowledge available in the industry, and make some differences in order to also gain competitive advantages (Blockley, Blockley & Godfrey, 2000, pp.2-3). CASE STUDY: BASIL CONSTRUCTION COMPANY As far as the UK construction industry is concerned, recent news reveal that the industry reflected a lower output with down “11.3% year-on-year and 2.6% from the second quarter as government spending cuts and a struggling housing market continued to take their toll” (UK construction industry output at 13-year low, 2012). However, there are hopes of recovering this stage as well. This reflects on the negative aspects of the industry that can eventually have significant effects on the construction companies in the country. In the present study, the focus has been placed on one of the construction companies in the UK; which is, the Basil Construction Company, of which an environmental analysis has been conducted on the company so as to realize its present status in the construction industry and any necessary developments that the company might require to incorporate. By an environmental scanning, the internal and external factors have been studied that are most likely to affect the performances of the company (Environmental Scanning- Internal and External Analysis of Environment, 2012). A BRIEF OVERVIEW: Basil Construction Company in the United Kingdom and is part of the Basil group of Companies that has been in existence for the past 99 years. It has been known ever since to give project delivery techniques, which are rationalized and competent as a result, produce thriving projects that are on time and within the targeted budget range for its clientele. With this in mind, the construction company exists of an organized group of construction experts who have wide-ranging experience in the field of construction and architectural designing that enhances the extra aesthetic particulars that eventually determined the general accomplishment of the project. In addition to that, for the company goals to be achieved, the management and other staff enforce high values on all members of the construction and designing team. Moreover, the company is constantly looking to devote its resources to maintain construction timelines as it advances its techniques and building expertise to advance its output standards. It can be noted that, Basil’s most significant driving factor is clientele satisfaction. Therefore, in order to ensure customer satisfaction, Basil Construction Company makes use of high-tech expertise software programs that guarantee consistent, complete diagrams that precisely mirror the actual design intended. As a result, it enhances the designing and building process through increasing efficiency. Generally, Basil Construction Company strives to come up with expert architectural designs, and other engineering services of a wide range of buildings within the budgeted timeline while using up to date technical improvements in building methods and resources as they generate correct and brief indenture credentials so as to show professionalism in the services offered by the organization. ENVIRONMENTAL ANALYSIS OF BASIL CONSTRUCTION COMPANY Considering the environment of UK construction firms; international diversification is part of the industry that has been in existence since a long period of time. This has eventually led to several opportunities for the construction companies in UK. With the effects of recession and global decline in the economy, the companies have started differentiating their projects and services considering their focus more on the markets niche, and in difficult projects. These factors are associated with the financial condition of the country that would pay for the project (Langford & Male, 2008, pp.123-124). Environmental scanning of an organization is essential in order to find out the internal and external factors that affect an organization’s performances. This includes the study of the micro and the macro environments in which the organization exists and executes its operations. Thus, SWOT analysis and PESTEL analysis reflect an understanding of the strengths, weaknesses, opportunities and threats of an organization as well as the political, economic, social, technological, environmental and legal factors affecting an organization (Morrison, 2006). Thus, in order to understand the environment of Basil Construction these factors are essential to be studied and understood. SWOT ANALYSIS OF BASIL CONSTRUCTION COMPANY As far as the strengths of the company are concerned; the most important strength of the company, lies in its position in the industry. The company is already in a leading position serving its customers fulfilling their expectations that can be considered to be the greatest strength of the company in attracting and retaining their clients. In addition, their positive and long lasting relationships with their partners prove to be beneficial for the positive outcomes of the company. The strengths of the company may also be realized from the various news of the company reflecting its activities over the recent years. The strength of the company has been known to have increased throughout, Hampshire, Isle of Wight, & Dorset regions. The working group has been fortified by the management organization that is steady and at the same time is to some extent deep, since it has been in existence for 99 years and has reputed itself as one of the region’s foremost building contractors. Basil Construction Company had recorded £80 million as revenue from its head office the Christchurch as they managed with economic strains largely from work in progress, also from voluntary joblessness of a number of the extended term senior staff. This allowed the company to create more opportunities not only for career purposes, but also for the expansion of the company. Another significant strength of the company is its corporate social responsibilities that it fulfills and considers as one of the major operations of the company culture. In spite of the strengths that Basil construction has; there are certain weaknesses too that accompany the performances of the company. This involve the factors of complexities, the cooperation from the government, as well as confidence of the market, that can at any time lead to failure of the company. Even if, it performs well there are complexities related to the transition to low carbon content in the environment and other such factors that the company may not be able to encounter with success. Moreover, if there is lesser cooperation from the government, then the company would not be strong enough to keep up its position in the industry. In such cases, there may be a failure in the market and the confidence may lose market share as well as the confidence of the customers. It is of doubt whether the company is strong enough to handle such situations effectively (Low Carbon Construction, 2010). However, the company also has several further opportunities in the industry. While some of the big contractors have been found to shrink or lose their position, Basil construction has plans to take advantage of the recruitment opportunities, and gain a top position in this area. For instance, as per recent news, Basil is seeking to expand its branches to the rest of the UK region as a result; there will be growing workload in the company. Also, if the company is involved in big projects, it naturally opens up other greater offers for projects that serve as huge opportunities for the company. Other opportunities for the company include expanding the sheltered housing market and obtain more work from its clientele who are the local establishments among others. Also, for the company to increase on its standards, they can collaborate with subcontractors, architects, designers, and consultants. The threats for the company largely include the government’s initiatives to reduce the carbon content in the environment and hence the UK government has also declared limits for carbon contents in the air that construction companies need to keep in focus while they execute their projects (Graham, 2011). Thus, managing this demand of the government might hamper the execution of the projects of the company causing threats. Other threats might include the rising global competition in the industry with newer entrants trying to enter the market. PESTEL ANALYSIS OF BASIL CONSTRUCTION COMPANY The PESTEL analysis allows an understanding of the macro-environmental factors like the political, economic, social, technological, environmental and legal factors that can affect the performances of an organization. The study of these factors would enable an understanding of how Basil Construction may be affected by these factors. POLITICAL AND ECONOMIC FACTORS: Concerning the construction industry in UK, there are significant concerns that are always required by the construction companies since there are uncertainties in the political and economic conditions of the country. These include the rising growth in the emerging markets that has been considered as one of the major factors in the forthcoming economy of the country. The different economic difficulties that the country has encountered include fiscal reduction, weak consumer spending and a weak investment recovery. The effects of the global recession have also left debts and crisis in the country. Other factors include new growth frontiers, rising inflation rates, increasing pressure on construction prices, rising risk of aggressive international currency competition, the global cost of capital, challenges to shift from vertical to horizontal construction, loss of skills and expertise, and industry consolidation and loss of productive capacity (Langdon, n.d.). SOCIAL FACTORS: With respect to the global factors, globalization is one of the major issues that significantly affect the operations of the construction companies in UK, including Basil. The global connections include associations between individuals, communities, public and private institutions, businesses as well as states. Globalization, made possible through technological developments and developments in communication, is also connected with global processes that include improved importance and rate of the movement of currency, resources, people and information across the world between countries, regions and local areas. Such flow in the connections allows growth in the global society as well and enables growth where social connections are developed between individuals and communities (Hanley, 2011). These in turn influence the growth in the industry through rising demands of particular construction projects and products. TECHNOLOGICAL FACTORS: Considering the technological factors, the newer innovations and uses of technological advancements are the factors affecting the industry. The uses of new techniques for construction are continuously evolved in the industry. In order to overcome competitors, it is necessary that companies make efficient use of such techniques. Thus, companies like Basil also need to incorporate these technologies. This lead to the need for new working practices in the company thus affecting the working culture that is existent in the present times. This also includes “constructing more component systems in factories rather than on the building site” (Competitive advantage through sustainable product development in construction, 2012). ENVIRONMENTAL FACTORS: The environmental issues mainly concern the level of carbon dioxide in the air that needs to be kept limited. In this regard, there is a need for construction companies in UK to meet the Kyoto agreement. Carbon dioxide that is produced from the burning of fossil fuels and waste from landfills is a cause of major concern and hence construction companies are strictly asked to manage these wastes and contents of carbon dioxide in air accordingly (Competitive advantage through sustainable product development in construction, 2012). LEGAL FACTORS: The governments of UK and European consider that the construction industry is extremely disjointed and “the only way to improve the performance of the industry in terms of safety and environmental performance is to increase legislation” (Competitive advantage through sustainable product development in construction, 2012). Thus, while the UK government considers such legislative powers and any changes thereby, Basil construction being located in the country can be said to be affected. USEFULNESS OF ENVIRONMENTAL SCANNING As far as Basil Construction Company is concerned, the environmental scanning can be said to have significant usefulness for the company since the internal and external factors associated with the company could be studied and understood. Through an understanding of the internal strengths and weaknesses of the company, the company should be able to focus on the necessary issues accordingly, while trying to overcome the weaknesses, and strengthening on the positive factors. Also, from the opportunities available in the market, and the threats prevailing in the industry, Basil would be able to take advantage of the opportunities and consider effective measures to remain prepared to encounter and overcome any threats that come in the way of their operations. Also considering the political, economic, social, technological, environmental, and legal factors, the study proved beneficial for Basil construction since these are the external factors that can have severe effects on the performance of the company. Hence, understanding of these factors proves essential for the company. From these studies, it could be obtained that Basil Construction Company in the present times is in a favorable stage of its performance leading the markets in the country. However, since the global competition is rising, along with negative impacts of global recession, it is necessary for every organization to consider all positive and negative factors while executing their plan. Basil should also be aware of all factors such that any new problem or issue does not get ignored by the company. Due to the environmental analysis of the company would provide effective understanding of the current situation of the company and the market in which the company is playing. CONCLUSION AND RECOMMENDATION: From the above study, it can be said that the Environmental Analysis Or Environmental Scanning of an organization is an essential tool for providing the organization with an understanding of the different factors- internal and external- that might affect the performances of the organizations. The present study considered Basil Construction Company, and from the study the strengths, weaknesses, opportunities, and threats of the company could be realized. Depending on these factors, the company can focus on its respective measures accordingly. The PESTEL analysis also provided with the external factors that are relevant in understanding the construction industry in UK based on which Basil needs to plan its ventures and projects. It could be learnt, from the study that in the present times, the company is doing very well within the industry, serving the needs and expectations of its clients, and providing with best construction solutions. However, it is to be recommended that the economic conditions of the world as a whole are highly fluctuating. With declining conditions, as was the case in the recent recession, there are global effects affecting the performances of every sector, and all organizations. Hence, in order to keep its position up in the industry, Basil should make a detailed environmental analysis before making its future plans and projects. REFERENCES Blockley, D.I., Blockley, D. & P. Godfrey (2000), Doing it Differently: Systems for Rethinking Construction, London: Thomas Telford Competitive advantage through sustainable product development in construction (2012), businesscasestudies, available at: http://businesscasestudies.co.uk/corus/competitive advantage-through-sustainable-product-development-in-construction/understanding-the external-environment.html (accessed on November 10, 2012) Environmental Scanning- Internal and External Analysis of Environment (2012), managementstudyguide, available at: http://www.managementstudyguide.com/environmental-scanning.htm (accessed on November 8, 2012) Graham, B. (2011), Construction, prospects, available at: http://www.prospects.ac.uk/industries_construction_future_trends.htm (accessed on November 10, 2012) Hanley, T. (2011), Globalization, UK poverty and communities, jrf, available at: http://www.jrf.org.uk/sites/files/jrf/poverty-community-globalisation-summary.pdf (accessed on November 10, 2012) Langdon, D. (n.d.), Key issues for the global economy and construction in 2011, davislangdon, available at: http://www.davislangdon.com/upload/StaticFiles/EME%20Publications/Other%20Resea ch%20Publications/10_Key_Issues_2011.pdf Langford, D. & S. Male (2008), Strategic Management in Construction, New Jersey: John Wiley and Sons Low Carbon Construction (2010), BIS, available at: http://www.bis.gov.uk/assets/BISCore/business-sectors/docs/l/10-1266-low-carbon construction-IGT-final-report.pdf (accessed on November 10, 2012) Morrison, J.L. (2006), Environmental Scanning, UNC, available at: http://horizon.unc.edu/courses/papers/enviroscan/ (accessed on November 10, 2012) UK construction industry output at 13-year low (2012), heraldscotland, available at: http://www.heraldscotland.com/business/markets-economy/uk-construction-industry output-at-13-year-low.19379120 (accessed on November 8, 2012) Read More