Strategic Management CNP Enterprises - Example

Strategic management CNP Enterprises Name Institution Date Introduction Construction Company is incredibly profitable in the contemporary world. However it is very competitive and requires many resources in terms of capital and growth. The competition is also very high among the construction companies. The company requires sufficient information regarding the market trends so as to remain relevant in the industry. Constant research regarding the market trend is a must and may require a lot of resources. The business environment must be well understood at all times so as to make the right decisions (Wit, 2008) Good business strategies must also be developed so as to ensure that the business rows and it should be able to withstand rivalry and competition that exists in the market. This will mainly require careful study of the market trends. The business strategies should also be good enough to avoid any mistakes during the implementation stage (Scott, 2007). The construction industry is very expensive if it is not well managed. This is mainly due to the high costs of building materials. It will therefore require good management practices to avoid any wastage that may lead to losses. The paper will discuss in details both the internal and external factors that affect the development and growth of the business. The business environment will also be analyzed. The main company being focus in the paper is Hong Kong Construction Company based in China. Analysis of the Business Environment The business environment is quite competitive and various factors surround it. These factors affect the daily operations of the business. They include both the internal and the external factors. The external factors require a lot of efforts to deal with it while the internal factors can be manageable. This is mainly because the external factors are beyond the control of the business and will require very good strategies so as to manage them. The internal factors are easy to deal with provided the management is committed to the process. If the company adopts the measures and strategies that encourage the growth of the business, then the company will be able to satisfy its customers and fulfill its major goals and objectives (Kim, 2005). External factors affecting the business environment Rivalry and competition Over the past few years competition has intensified in the market due to entry of many other companies in the market. This has seen the market share for the company educe which translates to reduced profits. The rivalry forces the company to change its strategies so as to remain relevant in the market. These strategies should be aimed at improving the quality of goods and services offered to its clients. This is mainly done for the sake of retaining the customers. If the clients are not satisfied with the services offered by the company, then they will easily seek services from a rival company (Mulcaster, 2009). Strategies also need to be developed so as to increase the market share of the company. The company should intensify its advertisement strategies internationally so as to have other clients who will add value to the organizations. The company should also know the strategies that are being used y the rivals so as to compete with them without being beaten. Modern construction techniques should be adopted by the company so as increase the capacity of the company. According to Slywotzky et al (1999), this will be important when it comes to competing with the rivals. The clients prefer the se of technological tools and equipment since it is quite accurate. The outcome of the work will also be improved when this tools and equipment are used. Most of the rival companies have not adopted these techniques ad it will therefore be beneficial to the company. Entry of new companies and bargaining powers of the clients The business environment is full of challenges due to the entry of new business enterprises in the market. This also affects the company’s market share and the profits, (Slywozky, 1999). The new companies are very aggressive in their quest to win the already existing clients together with the new clients. This has seen the reduction in the number of tenders awarded to the company compared to the previous years. This may end up affecting profitability. The new companies entering the market also have very good business strategies which easily convince the clients to offer those tenders and contracts. This is mainly attributed to the fact that they are carefully studied the business environment and are thus able to come up with good strategies. They have also identified the weakness that faces the existing companies and thus their easier penetration in the market. This means that the company has to act fast and identify all the weaknesses it has so as to be able to compete effectively with both the new and the existing companies. The business environment has also been modified by the fact that the customers have capitalized on the fact that there are many companies offering the construction services. This means that there bargaining powers has been increased due to the fact that they can seek services easily from any company. This has cause major adjustments in terms of pricing of the goods and services offered by the company. It is therefore important for the company to be flexible enough so as to adapt to this challenge. The company should also ensure that it has more bargaining powers that the clients. This can be achieved when the company strengthens its policies and improve its services offered to the clients (Slywotzky et al, 1999). Regulations and technology The construction industry is quite sensitive and has many regulations. These regulations must be followed closely so as to enable the company to achieve its missions, goals and objectives. The regulations are mainly targeted towards achieving the safety of the workers and the public. This is considering the nature of the activities that are performed at the construction site. These safety standards are also important in determining whether a company will be awarded a contract or not. This is because most clients in the public and private sector will only work with the companies that have the certificate of compliance with all the regulations in the construction industry (Wit, 2008). Although it may be difficult to acquire all the required certification, the company should ensure that it as registered with all the relevant institutions that govern the quality and standards of the works in the construction industry. Nag (2007) observes that with the advancement of technology, the company should ensure that t has adopted all the technological means of carrying out its operations. This should include all the design processes and also the database section. The use of technology will make the work done become much easier and accurate. Most of the clients will also prefer working with the companies that have adopted the modern technology. The current business environment also requires the company to be connected to the entire world. This is mainly for the purpose of monitoring he market trend. The only way to achieve this is mainly through the adoption of the modern technology (Management FAQs, 2012). Internal factors Aggressiveness, innovations and risk taking The business requires more aggression in order to achieve its goals and objectives. This is mainly because the business environment is full of competition. The rate at which a company is aggressive is the main factor that will determine the growth and performance of the company, (Johnson, 2008). This means that the company has to put in more inputs regarding the advertisement and innovations. This is mainly for the purpose of making the company more popular in the market. No business enterprise will succeed in the current environment without popularizing itself or making its influence known in the market. The company should also be involved in innovative ideas in its operations. This is mainly because innovations will be important in terms of saving resources and time taken to complete a project. Innovations can only be made if the company becomes flexible enough and it employs more workers who are conversant with the use of modern technology and have the knowledge and experience in the construction sector. During the bidding process, the company should be more pro active. The company should be prepared to take risks by participating in the tender for major projects. Although it may be required to pay he sums of money which is non refundable, the company should be prepared to take risks since it might be rewarded if it wins such tenders (Management FAQs, 2012). The key drivers to the business environment and their influences According to Schmitt (2003), the business environment has been influenced by various factors to become what it is currently. The factors are however, good for business. The major driving forces for this business environment are the quality of the work done and also the level of the client satisfaction. These are the major drivers of the business environment. The business environment has to change constantly so as to meet the standards set by the clients and the quality required by regulators. Quality The work done by the company has to be of the best quality so as to attract other clients who may want to work with the company. Therefore the company has to put in place the measures to determine the quality of the work done and also the processes the company may be involved in, (Nag, 2007). The quality comes with a price and has to be done accurately. The best strategies to improve the quality of the services offered by the company should be adopted. This is mainly because the clients are more concerned about the quality of the work done than the cost. Most of the clients in the market require that the quality of the work be good regardless of what it will cost. This has also forced many companies to adapt to quality measures which will benefit the company. These measures include the certification by quality standard bodies. Most of the companies have adopted quality management practices so as to be at pace with the set out quality and standards. Some of these quality measures in the construction industry include total quality management practice to minimize waste of materials and to maximize profits. The ISO certification of most of the construction companies has also contributed greatly toward the competition among the companies. Companies that have not been certified by ISO are seen as less efficient in terms of quality and efficiency of their work. Quality management practices have also been adopted and are common among many construction companies to train their workers regarding quality management. The quality of the work done by any company in the industry will affect its reputation. If a company performs well then it will have a good reputation and hence more clients. However if it performs poorly, then its reputation will be damaged and it will have less customers and it may end up collapsing (Mulcaster, 2009). Customer satisfaction This is the major inspiration for the current business environment in the construction industry. No company can operate without satisfying the needs of the clients. This is mainly because the clients will not contract the particular company again (Schimtt, 2003). In the current business environment, the number of architectural designs has increased. This therefore means that different customers will require different designs. This has lead to innovations since no company will want to be left behind in terms of innovation. Any particular design has to be unique from the other so as to ensure that the client will be satisfied. The competition in the market is quite high ad some of the companies have collapsed due to their inability to satisfy the customers (Hong Kong Construction Group, 2012). The company therefore needs to focus more on customer satisfaction so as to remain relevant in the industry. The market environment has also changed greatly due to the fact that the clients have more bargaining power compared to most of the companies. This has been brought about by the fact that most of the companies are competing for clients at any cost so as to avoid losses or staying out of business. The profile of most companies is always defined at the level of customer satisfaction. Most of the companies that have failed to perform or those that have collapsed did not satisfy its clients (Schmitt, 2003). Conclusion According to the paper the construction industry has undergone major changes in the recent past. The competition among the companies has greatly increased. This according to the paper is quite tough for most of the companies in the construction industry. Any company that seeks to enter the market has to prepare good strategies so as to be able to beat its main competitors who have already established themselves. According to the paper, Hong Kong Construction Company has put n place measures necessary to ensure that it remains relevant in the market despite the stiff competition. The paper further explains tat the changes in the market environment have been brought about by the quest for companies to do quality works and also the need for customer satisfaction. According to the paper, any company that does not meet these two criteria will be forced out of business. References Wit, M, (2008) Strategy Process, Content and Context, Thomson Learning Scott J.et al, (2007). Competitor-oriented Objectives: The Myth of Market Share. pp. 116–134. Retrieved on February 11, 2012 from .  Kim, M. (2005). Blue Ocean Strategy. Boston: Harvard Business Press. Mulcaster, W. (2009). Three Strategic Frameworks, Business Strategy Series, Vol 10, No1, pp. 68 –75. Slywotzky, A.,et al (1999). Profit Patterns, Time Business (Random House), New York, 1999. Johnson, G, et al (2008). Exploring Corporate Strategy, 8th Edition, FT Prentice Hall, Essex. Nag, R. (2007). What is strategic management, really? Inductive derivation of a consensus definition of the field. Strategic Management Journal. Volume 28, Issue 9, pages 935– 955. Schmitt, B. (2003). Customer Experience Management, The Free Press, New York, Management FAQs (2012). Strategic management. Retrieved on February10, 2012 from Hong Kong Construction Group (2012). Facts about Hong Kong Construction Group Retrieved on February 10, 2012 from Read More