Business environment and strategic planning - Essay Example

Various factors which are specific to the industries in which firms operate such as - economies of scale, product differentiation, degree of concentration of various firms in that industry as well as barriers to market entry; significantly affect their performance (Hoskisson et al., 2008). This paper aims to discuss the impact of reclassification of a firm’s industry sector, on the industry, and the factors affecting its strategic management. It also includes an analysis of the company’s value chain; five forces analysis of the industry it operates in; core competencies and key issues the five forces framework.

The leading construction firm – Carillion Plc., UK is selected for the purpose of this study. Carillion Plc., is one of UK’s leading support services companies, with a substantial portfolio of Public Private Partnership (PPP) projects and extensive construction capabilities. It has its business operations in various countries including the UK, Middle East, Canada, North Africa as well as the Caribbean, employing about fifty thousand people worldwide, and annual revenues worth more than £5bn.

It operates in various market sectors such as – defence, education, health, building, facilities management and services, roads, rail, civil engineering and utilities services etc. (Carillion, 2010a). Its key business strategy is to aim for sustainable growth in the support services and PPP projects; create, develop and market bespoke integrated solutions to its customers in the areas of project finance, design and construction as well as maintenance and lifetime asset management solutions.

It also aims to maintain a strong and selective construction capability for long-term support service customers. As a part of this strategy the company has undergone significant changes over the years, primarily in the industry sector to which it belongs. Carillion has been reclassified as a