Industry Analysis: Boom Logistics - Case Study Example

Name : xxxxxxxxxxx Institution : xxxxxxxxxxx Title : Industry analysis: Boom Logistics Tutor : xxxxxxxxxxx Course : xxxxxxxxxxx @2010 Industry analysis: Boom Logistics Introduction The company was incorporated in December 2000 as a mode of carrying out future accomplishments. It was formally an Australian Crane Company before it acquired flourishing private businesses that are currently holding strategic positions in Australian Crane industry. Boom logistics Company has the required technical knowhow and experience from the available resources as well as construction sites across Australia. The paper aims at providing an in-depth analysis of the company. Porter’s five forces and the attractiveness of the Boom logistics company Porters five model is a framework for business plan development and analysis of Boom Logistics Industry. It draws on industrial organization economies to obtain five forces which determine the competitive power and thus market attractiveness or the overall business profitability Of Boom Logistics (Arons, H., 2001). The five forces consist of forces that are affecting the ability of the Boom Logistics Company to serve consumers and make profit. According to Yilmaz, (2009), the five forces include threat of entry of fresh competitors, the intensity of competition, threat of substitute services or products, bargaining force of consumers and the degree of competition. These factors have in one way or the other affected the growth of Boom Logistics Company. Intensity of competition According to Luo (2002), the wide range of industry segments served by Boom logistics offers the company with a natural defense against rivalry in these sectors. The crane industry has an association which offers training to and guidelines on Australian standards in the crane industry. It offers guidance on occupational safety and health and promotes the commercial and industrial interests of its customers and this increases rivalry among crane hire companies. The ability of the Boom Logistics to thrive in the competitive market makes it highly attractive (Smith, & Grimm, 2006). Degree of competition According to Fritz, (2008), industry attractiveness of the Boom logistics company is the ease and magnitude of making a profit, in contrast to the involved risks, that an industrial unit offers and it is dependent on competitors, their comparative strength, and the rate of industry growth in demand for its services and goods. Murman (2003) argues that the Boom logistics limited is crane hire industry that provides lifting solutions and after sales services. The company is highly attractive because it offers several lifting solutions including crawler cranes and mobile cranes for long term and short term hire. It also offers engineered lifting solutions, engineered shift and lift solutions and packaged solutions comprising heavy haulage and tower crane. Majority of construction companies opt for tower hire because it is expensive to buy one (View, 2006). Threat of substitute products or services The Boom Company operates on a variety of industry sectors mainly on industrial maintenance and this offers the firm with a defence against competition in the market. The company does not receive much threat from new entrants since it offers a wide range products and it has also established and marketed itself in the country. The company has entered into many industrial maintenance sectors and serves a variety of main resources like gas and oil groups with provision of the lifting services to enhance efficient and planned turnarounds, shutdowns, onsite crane lifting, and regular maintenance requirements. The size and decentralisation of its fleet, professionalism and consistency of its services along with its appreciation of human resources and safety issues proves the attractiveness of the large company in resources and mining sector (Walker, 2004). The presence of products or services outside the Boom Logistics Company will increase the tendency of consumers to shift to alternatives. Boom has acquired a huge market in Australia and accounts approximately 20 percent of 20% overall access market which has enabled it to be more competitive over other crane hire companies. Bargaining power of consumers It is significant to apply porters five models in combination with SWOT analysis which is a strategic planning procedure used to assess the strengths, weaknesses, opportunities, and threats that are involved in a business project (Hill, & Westbrook, 2002). It entails specification of the goal of the Boom Logistics Company and identification of external and internal features that are unfavourable and favourable to attain that objective. The Boom logistics company has increased its attractiveness through the application of the SWOT analysis through the environment, safety, and quality and health charter. The primary objective of this charter is to make sure that the firm adheres to best practices in establishing systems and policies underpinning the obligation to offering a healthy and safe working environment. It has implemented best practice protection management scheme along with quality management scheme and this has given the company the benefit of accreditation by its main customers to carry its operations on major processing, mine sites and refinery plants. The accreditation provides the company with a significant benefit over other firms competing which are not able to fulfil the stern requirements. Boom Logistics as a turnaround business Business turn around refers to the process of shifting form a stage of low profitability or losses to a more profitable phase (Lenahan, 2005). A turn around can be activated by several factors such as improved utilization of Boom Logistics assets or through development of fresh services and products. Boom had experienced challenges in the past years due to fast economic growth. The company has experienced problems in accessing novel equipments, and with deliverance of novel cranes. The company had to handle the adverse weather conditions, with harsh cyclones on west and east costs. Open pit excavation which is usually vulnerable to disruption by wet weather and iron procedures and coal operations were all negatively affected at diverse times View (2004). In spite of these challenges, the competitiveness of the company enabled it to deliver a 10.6 percent increase in after tax benefit at 36.6 million dollars in the year 2005. The company made a number of acquisitions which positioned the company for future development. The biggest acquisition was James Group which the company purchased in 2006, offering a considerable dry hire crane business along with a significant business of crane sales. The company also acquired GM Baden crane business service; D & D cranes and the Moorland general access equipment hire business. The integration of the acquired businesses into Boom Company gave it the opportunity to offer distinctive services ranging from crane servicing, crane supply, crane hire and dry and wet and used and new crane sales. Recommendations The company should ensure that everyone whether customer, employee or the entire community who interface with it should not be harmed because good business is good safety. It will ensure that process and planning skills are in place, and that the company will be able to look in detail and mitigate hazards associated with its work, gat people involved in its task and promote communication along with team morale. In this regard, the company should focus on promoting wide business listening, communication and ensuring that people who are in the frontline have a voice to improvement and change. The company should continue moulding its fleet and its systems around the needs of the customers and make sure its customers contact is reliable and quick. The company is supposed to deliver extra benefits to customers based on excellent fleet mix and ensure that customers gain access to experience and knowledge of its technical people. This will usually translate into minimized project hazard and reduced time line benefits for its customers. The best means for people to learn and improve their skills in the Boom environment is through exchanging information with each other. Therefore the company should accelerate information sharing in several business sectors and amongst its schedulers, supervisors and engineers Conclusion The overall attractiveness of Boom Logistics Company is determined by its level of competition and the working environment that increases the confidence of customers. The Boom logistics company is greatly attractive since it has is highly competitive by offering a wide range of services and products. The company has established systems of safe and healthy working environment and this has increased its benefits over competing companies. Bibliography Campbell. D., 2002, Business strategy: an introduction , 2nd Edition, Butterworth-Heinemann Publisher, Oxford. Yilmaz, K., 2009, Basics of Major Strategic (and Analytic) Tools: Goal Setting and Strategy Process, GRIN Verlag Publisher, Munich. 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