Business Development Strategies for Balfour Beatty

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Extended Business Project
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Table of Contents
Introduction................................................................................................................. 3
Company Overview.....................................................................................................3
Competitive Position................................................................................................... 6
Marketing MIX (7 P’s)..................................................................................................6
Conclusion.................................................................................................................. 9
Reference List...........................................................................................................10
Appendix................................................................................................................... 12
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Introduction
The report focuses to evaluate how an organisation is affected form external and
internal factors and create a disruption of the smooth functioning of the company.
The report helps to analyse the different strategies and theories to generate a path
for creating a sustainable organisational structure. The report with the help of SWOT
and the competitive generic strategy attempts to define the macro environment to
help devise a strategic plan for the company. The competitive analysis helps the
company to identify the market level of competition and identify where the company
stands at the given point of time. The marketing Mix of 7P’s helps to evaluate the
marketing strategy of the company Balfour Beatty. The report also provides to
deliver an effective recommendation for the company’s future perspective.
Company Overview
The company Balfour Beatty founded in the year 1909, by Andrew Beatty and
George Balfour. The company started with focusing on general order contracts of the
government and private companies. This further enhanced and expanded during the
World War I, the company had been awarded the contract to create the army camp
buildings. Since then the company has handled several projects like Power Projects,
Dams, Transmission Lines, and Power Station. The company that started with a
capital of £ 50000 today posts a turnover of over £8,234 million in the year 2018
(Balfourbeatty.com. 2019). The company today is the largest construction and
engineering company in the United Kingdom and one of the biggest companies in
the global economy. The company to establish is foothold and enhance its global
presence has ramped up its efforts to enhance the overall efforts of marketing and
CSR activities around the world. The company follows very modern and advanced
tools for management accounting system and other tools to analyse the current
market trends and maintain a very high rate of efficiency. This has helped the
company to maintain its competitive edge in the sector. The same may not be very
effective in the global context with several bigger competitors in the economy.
Competitive advantage can be stated as the methods through which a company is
able to move further in the market. In the particular case of Balfour Beatty, the
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venture is working towards enhancing the construction arena by providing better
materials.
A SWOT analysis is an internal form of the framework through which an
organisation is able to analyze the capabilities that the business has (Gürel and Tat,
2017). There are four aspects of this framework, which includes the following:
Strengths
 Balfour Beatty has a highly
diversified market reach through
which they are able to operate in
multiple geographical areas such
as Edinburgh, South East Asia
Canada, and others.
 Balfour Beatty has over 50,000
employees workings within it.
These diversified employees look
over various aspects such as
human resources and others.
Weaknesses
 The organisation has an
increasing amount of debt. Since
the last year, the company has
paid over 40% towards its gross
debt that encompasses the
repayment that is made towards
convertible bonds
(Balfourbeatty.com, 2019)
 The organisation has an
excessive amount of dependence
upon the United Kingdom in areas
such as Edinburgh, Birmingham,
because of which other markets
are being neglected.
Opportunities
 The business has the chance to
perform an acquisition process on
smaller construction companies
such as Kier Group, Galliford Try
and others (Khatib, 2016).
 Several companies are performing
market expansion in areas where
Balfour Beatty operates; with the
assistance of good marketing
deals with emerging these
companies can be attained.
Threats
 Multiple regulatory pressuring acts
such as The Health and Safety
1974 pose as the framework that
lowers the speed of organisational
operations. This is because
governance and compliance with
laws require more vigilance that
increases decision-making delays.
 Companies such as Carillion,
Laing O'Rourke, Interserve and
other construction companies
operate as a direct threat to
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 The company should use Big Data
technology to optimize use of
resources.
Balfour Beatty with higher
discounts and lower prices.
Table 1 SWOT analysis
The impact of this SWOT analysis:
 The company can configure its product pricing and lower it as per the
discounts of other companies.
Porter’s Generic Strategies illustrates all of the possible competitive avenues that
can be pursued by a particular organization in order to achieve higher levels of
market scope. This strategy illustrates the giving focus on either quality or pricing
and aims towards raising the goodwill and brand value of the company.
There four core strategies within this framework that includes:
Cost Leadership – This strategy helps a company lower the pricing mechanism of
the company by putting a high emphasis on using alternative low costing materials.
The enterprise tries to reach rock bottom prices so that low-income consumers
chose it immediately (D. Banker et al., 2014).
Differentiation – This pathway focuses on pulling up the quality of the products that
are being produced so that there is a higher longevity of commodities. This helps the
enterprise to reach more reputation in the market quicker.
Cost Focus – The method helps the company to reach niche consumers who have
a very specific form of need. These consumers are willing to accept higher pricing
and pay more because of which the company can have higher profits.
Differentiation Focus – This strategy attempts to strike a balance between a broad
market and product uniqueness. There a high degree of resources is put into
research so that information can be attained about the tastes and preferences of the
consumers and what they want (Moon et al., 2014).
Application
In the particular case of Balfour Beatty, after evaluating all of the above-mentioned
choices it has been determined that the best strategy for the enterprise is the
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Differentiation strategy. This strategy will help the company to put more emphasis
on developing aspects such as infrastructure services, construction services, support
services, and others. This will company to create a more premium commodity
through which building with longer shelf life shall be attained. The profits of the
company are expected to rise by at least 30% in the coming year.
The impact of this strategy will be that within the coming one to two years the
likelihood of more revenue coming in within the business will be more. Along with
which, if Balfour Beatty attempts to expand into another market then the chances of
it acquiring more new consumers in a short period is high. It is anticipated that within
the coming years the company will have the change of pursuing a product
development strategy when this predetermined pathway will succeed.
In case other strategies such as cost leadership were chosen, then Balfour Beatty
would have acquired new customers. However, the quality of the products would
have fallen because of which long term consumer retention would not be there.
Furthermore, focusing on quantity would go against the objectives of the company,
which is trying to raise quality (Alstete, 2014).
Competitive Position
The company Balfour and Beatty to maintain its competitive advantage on the
economy has to analyse its prevailing market competition in the economy. To identify
the relevance of the competitive position in the economy a brief Marketing Analysis
of 7P’s is conducted on the company. The different components of the 7P’s are
Product, Price, Place, Promotion, People, Process, and Physical Evidence
(Noormoradia and Mozafarib, 2017). The same is discussed in brief below.
Marketing MIX (7 P’s)
Product The company focuses to deliver engineering and construction
service. The company with its expert skills and knowledge of its
business focuses to deliver very strong results. The products and
services of the company include construction of infrastructure
ranging into variety of spectrum. The company also provides in
engineering the overall design of Dams and Power projects. The
company also shows in designing and engineering Power Grids and
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providing a flawless service to its customers (Balfour Beatty plc.
2019). The company is very specialised and efficient in whatever
project they uptake. The specialised skill and experience gives the
company an edge over its competition.
Price The company follows a premium pricing strategy as the company
occupies a market leadership in the economy. The company also
takes part in several tendered projects around the world, which
require a competitive bidding pricing strategy. The expertise and
prominence of the brand of the company and a vast experience of
various project gives the company an edge over its competition in
the economy (Steeger and Rebennack, 2015).
Place The company headquartered in the United Kingdom has a global
spread and successfully completes projects in the global market.
The company enjoys a global presence with projects in Europe,
United States of America, and Far East. The vide coverage help the
company expand its experience to work in a different terrain and
with variable resources. This helps the company to maintain a
competitive edge in the economy.
Promotion The company focuses to take part in the different CSR activities all
around the world. The company also follows a strategy of green
construction methods to preserve the environment. These strategies
help the company build a very strong Brand name and Brand Value
in the global economy. The widespread global presence helps the
company to communicate through online communication system
and cater to the needs and requirements of the industry.
People The company incorporates highly skilled and trained employees
form all around the world. The phenomena of Globalisation have
helped the company to acquire a host of skilled employees form the
available talent pool globally. The company employs over 26000
permanent employees as of 2018 (Bingham and Druker, 2016). The
major recruitment of the company is done form the campus
recruitment of prominent institution around the world.
Process The company incorporates the most modern technologies and
machineries to finish its projects all around the world. The advent of
modern technologies backed with AI and Machine learning has
highly enhanced the overall functioning of the Company. The
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modern heavy machinery today more capable to complete more
task in lesser times. The advancement in technologies has also
helped the reduction of the human component in the field jobs
where a prevailing sense of danger continuously persists (Bock,
2015). This has not enhanced the quality of work and increased the
safety of the labours involved with the projects. This also gives the
company a competitive edge over its competition in the economy.
Physical Evidence The global presence and the strong and stable perception of the
company provide the company a very strong Brand Name and
Brand Value in the global economy. The strong logo and brand
equity provides the company very stable physical evidence in the
economy.
Table 2: Marketing Mix
Recommendations
Three types of recommendations will be made in the case of Balfour Beatty:
 Market expansion – The company has the ability reach to new markets such
as Russia, Africa and others. Performing this will enable Balfour Beatty to
know what consumers prefer in the wider international market. Furthermore,
different markets can have a varying degree of effect through heritage and
cultural on the operations and management of the enterprise.
 Employee Diversification portfolio – In order to bring in different points of
views within the enterprise different subordinates are required. Balfour Beatty
can focus on implementing both internal and external recruitment methods.
Through both of these methods, subordinates with different abilities will be
able to provide different insights that will increase product and service
uniqueness.
 Raising Funds – In order to raise funds Balfour Beatty can make a public
offering into the market with its shares, bonds, and other financial instruments.
This will allow the company to have more long-term funds for business
activities such as market research, product development and others.
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Conclusion
The report focuses to elaborate the competitive position of the company Balfour and
Beatty. The repost with the help of the brief illustration of different theories like
Generic Strategies, SWOT analysis and the Marketing Mix of 7’P helps to evaluate
the company’s environment. The report in brief discusses the internal and external
environment in the economy. The report evaluates how the same influence the
functioning of the organisation and how they modify its competitive position in the
economy.
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Reference List
Alstete, J.W., 2014. Strategy choices of potential entrepreneurs. Journal of
Education for Business, 89(2), pp.77-83.
Balfour Beatty plc. 2019. Showcase. [online] Available at:
https://www.balfourbeatty.com/showcase/ [Accessed 19 Jul. 2019].
Balfourbeatty.com, 2019. Balfour Beatty – Home [online] Available at:
https://www.balfourbeatty.com/media/318113/balfour_beatty_annual_report_2018.pd
f [Accessed 19 Jul. 2019].
Balfourbeatty.com. 2019. [online] Available at:
https://www.balfourbeatty.com/media/317242/balfour_beatty_ar17.pdf [Accessed 19
Jul. 2019].
Bingham, C. and Druker, J., 2016. Human resources, ethics and corporate social
responsibility: what makes ‘people’count within the organisation’s corporate social
responsibility platform?. In CIPD Applied Research Conference 2016: The shifting
landscape of work and working lives. Chartered Institute of Personnel and
Development.
Bock, T., 2015. The future of construction automation: Technological disruption and
the upcoming ubiquity of robotics. Automation in Construction, 59, pp.113-121.
D. Banker, R., Mashruwala, R. and Tripathy, A., 2014. Does a differentiation strategy
lead to more sustainable financial performance than a cost leadership strategy?.
Management Decision, 52(5), pp.872-896.
Gürel, E. and Tat, M., 2017. SWOT analysis: A theoretical review. Journal of
International Social Research, 10(51).
Khatib, J. ed., 2016. Sustainability of construction materials. Woodhead Publishing.
Moon, H.C., Hur, Y.K., Yin, W. and Helm, C., 2014. Extending Porter’s generic
strategies: from three to eight. European Journal of International Management, 8(2),
pp.205-225.
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Noormoradia, S. and Mozafarib, A., 2017. Investigating Relationship among
Marketing Mix of 7p with Accosting. Journal of Economic & Management
Perspectives, 11(1), pp.1431-1437.
Steeger, G. and Rebennack, S., 2015. Strategic bidding for multiple price-maker
hydroelectric producers. IIE Transactions, 47(9), pp.1013-1031.
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Appendix
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