International Construction Analysis of Fletcher Construction

Running head: INTERNATIONAL CONSTRUCTION
International Construction Analysis of Fletcher Construction
Name of the Student:
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Table of Contents
1. Introduction.........................................................................................................................2
2. Identify and describe the company based on core business, capability, financial
capability and current market offerings.....................................................................................2
3. Selection of country where the company is mobilise.........................................................4
4. Development of matrix identifying the mobilization risks.................................................6
5. Identify and describe key tasks and activities need to put in place in order to minimise
these mobilisation risks............................................................................................................13
6. Discussion of strategies appropriate to take the company from current business model to
target company.........................................................................................................................17
7. Conclusion........................................................................................................................19
References................................................................................................................................20

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1. Introduction
The report is based on leading Construction Company which is operating in New
Zealand. The selected company for this study is Fletcher Construction. The report discusses
on the international construction market as part of the company efforts in order to
internationalise its business model. The core business, capability, financial capability and
current market offerings of Fletcher Construction is discussed in this study. PESTLE analysis
is performed into the current market situation to analyze its external and internal business
functions in other country where it is wished to mobilise. The key activities is identified for
minimizing mobilization risks into the company. Finally, main strategies are also discussed
which are accurate for taking the company from its current business models.
2. Identify and describe the company based on core business, capability, financial
capability and current market offerings
The selected company for this study is Fletcher Construction, which is the business
unit in Construction Division of Fletcher Building Limited, which is listed on the stock
exchange market of New Zeeland and Australia. The company is structured into four business
units which are managed by the General Manager and senior leadership teams. The core
business units of this construction company is building and interiors, south pacific as well as
infrastructure. In recent years, the company has expanded with acquisition of Higgins, which
is a leading construction company designs, constructs as well as maintains the road and
infrastructure (Fletcher Construction, 2019). The construction company consists of 20,000
employees with its market capitalization of Fletcher Construction is around $9 billion. The
three business units of Fletcher Construction are summarized as below:
Fletcher Infrastructure: It has completed various iconic infrastructure as well as
transport projects in market of New Zealand over years included roads, railways, bus

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connections stations, waste water services, bridges and others (Fletcherbuilding, 2019). This
business unit is a foundation of the problems and solve the customer’s requirements while
managing key designs delivery and other construction tasks.
Fletcher South Pacific: It is active in South Pacific since the year 1946, By means of
building of collaborative relations throughout South Pacific islands, the construction
company becomes leading in quality builder into the particular regions
(Fletcherconstruction.co.nz, 2017).
Fletcher buildings and interiors: The leading construction company has undertaken
works widely in usage as well as scale in the main structures plus commercial interior fit
outs.
The financial capability of Fletcher Construction is that there is total sales of
approximately $3,468 million, and the revenue of the company for financial year of 2017 is
$9,471 million and net earnings are $(190) million. The capital expenditure is $304 million
with customer engagement is 70% (Fletcherconstruction.co.nz, 2018). The largest company
of New Zealand, Fletcher Building had a year loss of $190 million. It compares a profit of
$94 million in the financial year of 2017. The gains are more than offset by increasing in
costs as well as the company is required to invest for meeting higher than anticipated market
demands, As per the company, there are losses into the building and interior divisions which
are maintained at $660 million which was announced to market in the year 2018.
The current market offerings of the company are product innovation, service and
channel innovation, productivity of labor as well as global supply chains. The company is
offering green as well as efficient buildings work with regulation along with charging the
customer’s preferences drive innovation into energy efficiency buildings
(Fletcherconstruction.co.nz, 2017). In service and channel innovation, there is growing in

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personalized service expectations with the customers are interacting with brand. They are
offerings new low cost entrants and digital services plus online purchasing for the customers.
The pre-assembled structures of buildings will lead to reduce need of onsite labors and it
speed us the construction time. Finally, in global supply chains, there is low cost country
sources for inputs which can continue to present larger cost reduction opportunities
(Fletcherconstruction.co.nz, 2018). There is also globalization competitions from low cost
country producers as well as western players.
3. Selection of country where the company is mobilise
The Construction Company is like to mobilise in Asian countries. Asia is the largest
continent in entire world with a surface area greater than 8.7% of the Earth. It hosts close to
4.3 billion of individuals with ranked a leading continent in the total population growth rate.
The continent is being characterized based on various cultures, political systems as well as
economic systems in addition to physical environments (Fletcherconstruction.co.nz, 2017).
The report shows a background research of the country by using PESTLE analysis to identify
current market situations of the country so that the researcher can identify if it is better to
mobilise in the country or not. Below table will show the PESTLE analysis of Asia as:
Factors Details
Political
factors
 Most of the nations are transforming from the conservative one
party political systems to the western style democratic systems.
 Under constant pressure, the country is transformed into western
style of the governmental systems.
 It leads to promising government for foreign companies seeks to
invest into Asia. (Kırılmaz & Erol, 2017).
 The country is under one-party political system which is
suppressing efforts by means of democratic movements to changes

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into the governmental systems.
 There are significant control across Asia which can hinder entire
economic freedom.
 The country has significant lack of the true market freedoms.
Economic
factors
 Asia has rapid growth into economy.
 The country has stronger purchasing power parity and it is ranked
second after Europe in this case (Yang, 2017).
 Most of the Asian countries are overtaking various leading
economics into the world with rapid expansion of the continent
nominal GDP.
 Most of the state governments are concentrated to enhance into
economic developments.
 It creates satisfied environments in area of investments to be
flourished (Edirisinghe & Andamon, 2018).
Social factors  There are huge population which is estimated to be 4.3 billion.
 The country gas strong human development index which is
enhanced by improvements into the healthcare, educations and
economic factors (Shin & Song, 2015).
 There is an increase per capita incomes.
 There is significant differences into social classes.
 The firms are located into areas with targeted population for
success into the business.
 Asia has ethical groups as well as cultural practices across the
regions.
Technological  There is intensive networks of the roads as well as inroads.