+1 862 207 3288 Read the below article from Construction News (14.01.2015) on three SMEs and their plans for 2015. For the purpose of this assignment,
you need to choose one of the three companies addressed in the article and develop a comprehensive analysis of the company’s strategic
position as well as the areas of growth. In more detail your assignment should address the following:
Part I: What does the article and any other sources (e.g. http://www.ardemolition.co.uk/;http://www.lakesmere.com/ and http://www.van-
elle.co.uk/ ) reveal regarding the company’s business direction and focus. Assess several factors in the macro environment to identify
how future issues might affect the company.
Part II: Analyse the construction industry with a particular focus on SMEs. Is the industry likely to be attractive for the company?
Part III: Considering the company’s capabilities, identify the organisation’s strengths and weaknesses and carry out a SWOT analysis.
What is your conclusion from the SWOT analysis?
Part IV: Identify company’s strategic business units (SBUs) and discuss corporate strategy choices regarding potential growth areas for
its different SBUs.
Part V: What are the current marketing strategies for the company’s market segments? Develop a marketing strategy for the corporate
strategy choices suggested in Part IV.
Guidelines
1. Please include diagrams to support your work.
2. As references and for further reading (other than the lecture slides) you can refer to the following books and articles:
A. Johnson, Scholes, and Whittington (2011), Exploring Strategy, 9th Edition, F T Prentice-Hall.
B. March (2009), Business Organisation for Construction, 1st Edition, Taylor and Francis.
C. Green, S. D., Larsen, G. D. and Kao, C. C. (2008) Competitive strategy revisited: contested concepts and dynamic capabilities,
Construction Management and Economics, 26(1), 63-78. ISSN 0144-6193.
D. Kao, C., Green, S. D. and Larsen, G. D. (2009) Emergent discourses of construction competitiveness: localized learning and
embeddedness, Construction Management and Economics 27(10).
E. Jobber D. & Ellis-Chadwick F. (2013), Principles and Practice of Marketing, 7Edition, McGraw-Hill Education.
Formatting criteria
• Font: Times New Roman font, 12 pt.
• Page size: A4 portrait
• Margins: 2.5 cms
• Line spacing: Single
• Harvard referencing system.
SMEs look to grow in 2015 as opportunities return (http://www.cnplus.co.uk)
14 January, 2015 | By Anna Cafolla
2014 proved to be a decent, if difficult, year for many SMEs. Anna Cafolla speaks to three specialist contractors about their plans for
the year ahead and what challenges they expect to face – as well as what opportunities they will exploit.
• AR Demolition
• Lakesmere
• Van Elle
As 2015 begins, many SMEs are looking forward to the year ahead with cautious optimism.
The worst of the downturn appears to be behind the industry, particularly for the hard-hit SME sector, but few are claiming that boom
times are here again. Three specialists operating in three different sectors are all increasingly busy again and are now eyeing
opportunities to grow.
AR Demolition
AR Demolition owner Richard Dolman sees a stronger manufacturing industry as an area to explore. “There is more manufacturing happening
and it’s on the up, which generally means there is investment happening,” he says. He has also noticed an increase in demand for
northern contractors on southern projects, speculating that local firms “are perhaps at capacity or seem to be charging a lot more”.
“Finding staff of a calibre that we like to have is challenging and the market is very competitive” said Richard Dolman, AR Demolition.
Capacity is, of course, a major issue for many firms, with staffing and skills proving in shorter supply. “Finding staff of a calibre
that we like to have is challenging and the market is very competitive,” Mr Dolman says. Another threat he cites is “getting a client
to understand where they are actually getting value for money” and the time it takes to produce high-end products. “I hope clients take
a more pragmatic view on value for money, rather than just turning to the back page of a proposal,” he says.
AR Demolition refuses to work to small margins to snare bigger projects, but Mr Dolman does concede that the looming election will mean
“government purse strings tighten”, slowing down the flow of work.
Lakesmere
While the public sector may face a hiatus, some SME contractors have seen improvements in the commercial arena, and Chris Horsfall,
development director at cladding and building envelope specialist Lakesmere, believes this will continue this year. The firm will
continue to focus on the commercial sector, with a focus “on high-rise façade work, cladding and unitised walling”.
However, SMEs will also remain under pressure from staff shortages and markets constraints, and MrHorsfall cites recruitment and
limited resources as major challenges to boosting turnover over the coming 12 months. “Even with the cash going forward, the problem is
having the resources to carry out work,” he says. However, he is hopeful the recently announced swathe of rail projects will generate
demand for surrounding construction. MrHorsfall still sees the market as “depressed”, hoping that interest rates and material costs
will rise, as well as the quality of projects and rates of pay across the industry.
Van Elle
Deputy managing director Vic Handley says ground engineering specialist Van Elle is concentrating on rail and infrastructure as 2015
kicks in, having invested £14.5m in the past two years in its own rail division, with a further £8.5m to come over the next 24 months.
The rail sector is “recession-proof” because of Network Rail’s budgets, adds Van Elle financial director Paul Pearson. “There’s that
much activity in those markets that we’re trying to map our investment to our growth and opportunities,” he says.
In April 2014, Van Elle revealed turnover of just under £47m and expects this figure to reach between £60m and £64m by April 2015.
Above all, however, Mr Handley says that Van Elle is not an “ego-trip” company and always looks to make a profit.
Regional expansion will be on the minds of many SMEs in 2015, and Van Elle is among the firms looking to expand into new areas. With
established operations in England and Wales, Mr Handley says they are increasing their operations in the “burgeoning area” of Scotland.
Group development director Mark Williams says he believes Van Elle’s success is because “we have spread our risk across so many
markets”. “If there is a downturn or anything happens within a single market, we’ve got more than enough work to keep us busy,” he
says.
With such an investment in infrastructure, Van Elle is watching the unfolding build-up to the general election with interest. The run-
up to May will be a cautious time for contractors for fear of governmental changes causing indecision on projects. The “five-year shelf
life” of governments, Mr Pearson says, may well hinder promised developments.
The next government needs to maintain “the confidence to go forward and we need stability for the industry, as well as investment” Mr
Handley says.
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