Professional Career Development - Essay Example

Task Professional Career Development Introduction Like any other sector in a free market, building and construction is controlled by the natural forces of the market, among which is competition. Fellows et al (17) defining the market situation must involve the competitive forces which include; threats posed by new entrants and substitution, bargaining power of buyers and suppliers as well as competitors’ rivalry. Some of these forces are more elaborate in the building and construction industry than others. For instance, threat of substitution is very minimal when compared to the other factors because a certain building or structure needed has a very low substitution capacity by a different one. According to Best and De Valence (25), there are certain determinants that characterize the form of the building that a client gets. Economic and legal requirements are by far the most compelling factors, but the other factors including technology, materials, functional and climatic factors affect the project. Client’s specifications on the building are based on the circumstances surrounding these factors. Risk distribution between the constructor and the client can be assessed for various projects to determine the impact that client type has on design and construction elements of a project. In the following three client types, study has been conducted to highlight the intricacies involved in the determination of risk distribution and the impact passed on to the entire project procedures. Three sectors of the industry have been chosen discussed in the section. The Domestic Housing Market Domestic construction market is characterized by private ownership and individual preferences. The domestic building and construction market can further be divided to include various client types, for instance a family which needs a small house, medium and big home builders. First time builders and luxury house builders across the size demands of buildings are also observed in the market. The direct involvement of the client in the project is increased by the direct ownership factor which also increases accountability on the part of the client. Domestic Housing Market versus Industrial, Infrastructure? Transportation Markets Due to the fact that the domestic housing competition is heightened by the slender barriers of entry of new competitors enables the clients to enjoy the benefits of a competitive market. Some of the benefits enjoyed include lowered costs and a variety of service providers to choose from, which enhances preference. Such a diverse market features a variety of risk distribution, project duration, location preferences as well as and costing flexibility. The domestic market also has a slightly smaller section of construction work that involves repairs and maintenance service. Diversity is therefore exhibited in the nature of client needs which require minimal technicalities due to the fact that there are fewer issues involved. When compared to industrial or infrastructure construction markets, domestic demands are by far the least in project technical parameters and regulations involved. These and other factors influence the construction parties’ decisions and the final decision making rates the owner at a higher status than the constructor. Despite there being a relatively higher flexibility in the domestic housing market, the cost and risk distribution method adopted is still governed by the market structure determinants. The above forces of the building market that directly determine the distribution of costs incorporates the market evaluation and study as detailed by the competition analysis (Fellows et al, 19). Bargaining elements in domestic housing are defined by the fact that there are housing associations whose organization has reduced the number of direct constructors that the market has in the UK (Boyd and Chinyio, 247). Social housing organizations determine the level of competition that the market has in the UK, which increases the bargaining power of the constructors. Suppliers’ power of bargaining is increased if there are only a few of them, which is facilitated by formation of associations. Since the clients’ base is relatively greater than the suppliers, their bargaining power is accordingly lowered. Domestic Housing Project Case Studies Case Study 1: Residential Project in Loughton An overview of the project reveals that the project was located in a plot of land in Loughton, Essex with a residential neighbourhood. The particular site had a bungalow that the client wanted demolished and a new smaller size house constructed in place. The clients (Mr. and Mrs. Harvey) gave their ideas of the design to the constructor (Custom Homes) to complete the project for their own living house. Legal and other construction compliance requirements were dealt with and the project kicked off. The client’s reservations were pivotal in the design and construction processes. The bedrooms, kitchen, garage, galleried staircase, lounge, staircase, games room are some of the specifications that the client’s attention was particularly positioned. The duration of the project was set to take eight months at the cost of slightly less than four hundred thousand UK Pounds. This translates to about £1000/m2 as applied in high specification properties. In terms of final valuation, the house is estimated at around one and a half million UK Pounds. The main challenge encountered was in the arrival of the final design to fit the client’s preference, which was tackled by use of design outsourcing services as well as partnering with SIPS Eco Panels for fabrication needs (Koegh, 2). Case Study 2: Montrose Social Housing Development Located in the coastal resort of Montrose in Angus, the project involved the construction of 29 housing units under the Code of Sustainable Homes (CSH) Level 3. The clients were tenants in a neighbouring location and needed to relocate to the new houses on the plot that they had acquired, once constructed in one and a half years time. Much of the design work was to come from the constructor, but the general structure positioning was contributed by the clients. External architects were hired to collaborate with the contracted constructor where the provisions for the Code for Sustainable Homes were largely used to determine the design and building procedures. The initial challenges were largely design and material selection for the different units to cover the CSH standards (Barr, 1). Infrastructure Sector The nature of the infrastructure industry is characterized by the rigorous tendering procedures necessitated by the funding agencies among which the government is included. Perfect competition is realized in the infrastructure sector since the requirements regulating the market ensure that certain elements of the market. Stringency levels are high and they dictate the manner in which awarding of tenders is conducted. Bargaining power from the clients is relatively higher than the supplier bargaining power which ensures that the costs of project performance are kept as low as possible. Most of the projects touching the public sector are tendered to private sector players who operate on higher efficiency levels. The role of politics in the construction of infrastructure projects is sometimes questioned but with a good risk appraisal system, the confidence levels can be raised. Design as well as spare capacity are however inflexible in many instances, even if risk appraisals are carried out accordingly (Perry and Thompson, 16). Case Study 1: Manchester Metrolink Phase I The project involved the construction of the thirty one kilometre tramway that was finished and opened in 1992 at a cost estimate of over forty million UK Pounds. The projects were initially being funded by sponsorship from a non-governmental agency but the government reigned in and reduced some of the influence that the sponsors had. A concession was established and the funding was changed to be met exclusively by public funds. The type of the concession was Design, Build, Operate and Maintain (DBOM) and it was going to be operated on a fifteen year period. Expansion of the project into the second phase was done using public funds and the first segment of the third phases is also underway fully funded by the government. The main challenge involved is funding since the government expenditure is overstretched; the third expansion plan had to be divided into two (KPMG, 11). Case Study 2: Teesside Power Plant Approved and initiated in the year 2008, the gas fired engine power station funded by the government was targeted at producing over one thousand megawatts of energy to the country. Its location is Seal Sands in Teesside and scheduled for completion within four years. The main challenge to the project is funding, which could be enhanced to facilitate efficient service delivery especially in the current energy demands (CIOB, 2008). Commercial Developments Case Study 1: Brooklyn Motors Car Showroom at Worcester The construction of commercial developments can be illustrated by such projects as the over tow million UK Pounds worth Worcester car show room embarked by Brooklyn Motors. The project was also to include a workshop for the Brooklyn Motors. Competitive bidding was performed and the John Parrot (JP) Group of Companies won the tender under the construction division. The project took a period of twenty six weeks to completion. Case Study 2: British Petroleum (BP) Petrol Filling Station at Tewkesbury Tendered out to several companies and won by the JP Group of Companies, the project to build an oil filling station for BP at Tewkesbury at a value of about six hundred and twenty five thousand UK Pounds commenced in 2000. The site initially had old unused buildings which belonged to BP and had to be demolished for erection of the new construction structures (JP, 2010). Challenges and Opportunities Faced by the UK Construction Industry Today The UK construction industry is characterised by design-bid-build regarding procurement of construction services at almost level, especially for the infrastructure and industrial sectors. In the overall rating in Europe, UK leading firms rank at around position thirteen illustrating the investment lag in the industry with regard to other European construction giants. According to Madigan (4), research, education and funding in the UK are some of the issues that pull the industry behind of other leaders in European construction industry. The UK lacks in a clear connectivity between design and management of the industry, which is a strength enjoyed by the other continental competitors. Among the major challenges facing the UK construction market, the civil engineering sector fragmentation places the industry at a poor position than other engineering areas. Market bargaining power favours the clients in the UK market which effectively reduces investment incentives needed to polish up the rewards. Overseas competition is continually exerting pressure to local construction industry, a good example involving the Japanese. The challenges existing in the UK market by far outnumber the opportunities and therefore pose a serious threat to the industry. Due to the economic pressure exerted by the market events, the construction industry is likely to experience a huge shift of parameters, among them competition. Due to mixed fortunes in global economic progress in the years to come, investment patterns in various sectors of the economy are likely to be greatly altered. The shifting in national economic foundation, for instance from manufacturing to largely service oriented foundation will impact in the trends of consumption for construction services. It is therefore a clearly illustrated point that market volatility in other sectors of the economy will greatly impact on the building and construction industry. For instance, if there is little investment in the manufacturing industry due to continued investment preference for the service sector, demand for industrial construction in manufacturing industry will considerably fall. The main recommendations that that can be raised to the UK construction market are basically on the industry opportunity perspective. The world construction players are mainly three including the European Union, Japan and the USA. The UK has a huge opportunity presented by the overseas emerging economies as ready markets with a huge capacity to improve all sectors of their economy. Infrastructure for instance, is a clearly well established market not well exploited by the industry players. Investment incentives must be availed at all levels to facilitate capacity building for market diversification in order to reach overseas markets alongside the home market. Works Cited Barr, P., “Montrose Social Housing Development Completed to CSH Level 3.” 10th April 2010. Web. 20th Nov 2010 < http://www.uksips.org/assets/casestudy-sipbuild-montrosehousing-ref.cs10201004.pdf> Boyd, D., & Chinyio, E., Understanding the construction client. Oxford, UK: Wiley-Blackwell, 2006. Print Chartered Institute of Building (CIOB), “UK Approves Big Gas-Fired Power Plant in Teesside.” 29th Aug 2008. Web. 20th Nov 2010 < http://www.ciob.org.uk/news/uk-approves-big-gas-fired-power-plant-teesside > Fellows, R., Langford, D., Newcombe, R., & Urry, S., Construction management in practice. London, UK: Wiley-Blackwell, 2001. Print John Parrot (JP) Group of Companies, “Construction Division Case Studies.” 2010. Web. 20th Nov. 2010. < http://www.jp-group.co.uk/construction_case.aspx > Koegh, P., “Self-build Residential Project in Loughton Completed Using SIPS Eco Panels.” 4th Aug 2010.Web. 20th Nov 2010 < http://www.uksips.org/assets/casestudy-customhomes-harvey-ref.cs08201004.pdf> KPMG International, “Success and Failure in Urban Transport Infrastructure Projects.” 2010. Web. 20th Nov 2010 < http://www.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/Documents/Success-and-failure-in-urban-transportation-infrastructure-projects.pdf > Madigan, D., “A SWOT Analysis of the UK Civil Engineering Industry.” Bath, UK: University of Bath, 1997. Web. 20th Nov. 2010. < http://www.bath.ac.uk/management/larg_agile/publications/pdf/cnu97-34.pdf > Perry, G. J., & Thompson, T., Engineering construction risks: a guide to project analysis and assessment implications for project clients and project managers. London, UK: Thomas Telford, 1992. Print. Read More