Fletcher Construction: Mobilization Risks and Strategies Analysis

This report provides a comprehensive analysis of Fletcher Construction's potential international expansion, focusing on the construction market in Asia. It begins by describing Fletcher Construction's core business, capabilities, financial standing, and current market offerings. A PESTEL analysis is then conducted to assess the political, economic, social, technological, legal, and environmental factors influencing the construction market in Asia. The report identifies and develops a risk matrix for mobilization risks, including staffing, logistics, health and safety, materials supply, and cost and program control. Key tasks and activities to mitigate these risks are outlined. Finally, the report discusses strategies to transition Fletcher Construction's current business model to incorporate operations in the target country, offering recommendations for successful internationalization. The analysis is based on the assignment brief provided, addressing all required aspects for a thorough understanding of the international construction market and the challenges and opportunities it presents.

Running head: INTERNATIONAL CONSTRUCTION
International Construction Analysis of Fletcher Construction
Name of the Student:
Name of the University:

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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.

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factors  There are easier, faster as well as convenient transport to the
interior regions in order to reach people residing into the rural
areas.
Legal factors  Asian countries has well reformed legal systems.
 It can seek to promote justice throughout equitable distribution of
their resources.
 There is establishment of the special courts for settling special
cases into the society.
 There are informal judicial systems where there are solving of
disputes by the local governments into most of the states (Yang,
2017).
 There are localized system which can corrupt as well as
discriminatory: inconsistent with the constitutional rights.
Environmenta
l factors
 There are diverse into the climatic features.
 Asia has attractive physical features for the tourism industry.
 Asia is rich into supply of the natural resources (Shin & Song,
2015).
 Most of the potential investment sources opportunities for the
multinational plus industries.
4. Development of matrix identifying the mobilization risks
While mobilization of the company from one place to other, there are various risks which
are required to manage in establishing new construction business into the target company
which is Asia. Risk matrix is provided in this section where all possible risks are identified
along with its mitigation steps and likelihood as well as consequence of occurrence.

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Following are the risks which are caused due to mobilisation of business of Fletcher
Construction from New Zealand to Asian countries.
a. Staffing
In order to mobilise the business of Fletcher Construction from New Zealand to Asian
countries, there is risk of staffing of the resources. There are lack of project staffs those
have experience and knowledge of company mobilization. People those are involved in
mobilization should have proper knowledge of the country where there are desiring to
mobilise the business (Trauner et al., 2017). There is lack of trained and skilled
professionals across the construction industry dealing with the work. This threat can
provide effect on growth of the business and its profitability. At first, the resources should
have idea where they are mobilise the construction business and if it would be helpful for
the company based on its revenue, market share and profitability. The staffs should
require to maintain security plus maintenance of the business in other country (Tesfaye,
Berhan, & Kitaw, 2016). Therefore, in order to manage risks regarding staffing, the
construction company should hire those resources who have proper knowledge as well as
experience to work in this field.
b. Logistics
At the time of mobilization of the business, logistics risk is a concern and threat to the
construction business because of increase into regulatory threats. In this case, it is critical
to conduct the business in other country and engage of the suppliers as well as contractors
in other country to deliver the products and services to that country (Bazlamit, 2018).
Mobilisation of a business is totally based on managing of the construction products and
equipment’s into the supply chain. Due to global economic downtown, the cost of holding
inventory can rise from 25% to 60% for the items into the inventory for over in a year.

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Weak planning as well as poor forecasting lead to failure into inventory. Those risks are
managed by proper selection of the suppliers those have experience to work in the
construction field (Bahamid and Doh, 2017). The risks are also managed by selection of
best warehouse plus distribution solutions so that cost of holding inventory is not
damaging the business of Fletcher Construction.
c. Health and safety considerations
In order to mobilise the business from one country to other, health and safety risk is a
concern for the business as it might occur when people are exposed to the hazards. It is
required to manage either by management and elimination of the risks. It is occurred
when there is poor code of health and safety and health regulations implemented into the
organization (Ansah & Sorooshian, 2017). The hazards are occurred due to unsafe use of
the manual handling of the project tasks, unsafe use of the construction machineries and
equipment and use of electrical plant in wet areas. Those risks are managed by inspecting
the workplace as well as observation of how the tasks are to be performed. The workers
should be consulted related to health as well as safety problems those are encountered to
perform the work (Vidivelli & Jayasudha, 2016). The construction company should
implement and prepare a proper health and safety policies into the organization so that the
workers can strictly follow it to avoid any types of health and safety hazards into the
workplace where they are worked and involved.
d. Materials supply
The risk related to material supply is caused due to shortage as well as delay in
materials supply along with unstable supply of the raw materials. Shortage as well as
delay into the materials supply can cause problems like delay in mobilisation of the
construction project delivery to other country (Ebrahem, 2017). Shortage of the materials

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are related to availability of the construction materials. Poor estimation of the material
quantity causes shortage of the supply and oversupply. It can disrupt the progress of the
construction work and mobilisation work on the sites. It causes additional cost and delay
into the plan (Rubio, Serpell, & Ferrada, 2018). Materials of supply risks are managed
throughout proper management of the resources and materials which are required to
mobilise the business from one place to other. The operation manager should identify
proper estimation of the materials quantity and materials required for the project plan.
e. Cost control
Cost risk is occurred when the project cost becomes more than its budgeted cost. It
leads to performance risk of the project when there is overrun of the project cost, it can
lead to reduction of both scope as well as quality (Sui et al., 2018). Cost risk can lead to
increase into the project schedule due to extend in one of the activity time, it can cause
delay into entire project scheduled time and causes project delays. Cost risks is caused
when the construction industry has not enough funds for conducting the mobilisation of
the business from one country to other and it leads to delay in project completion work. It
is managed by proper collecting of fund for the project and managing of proper resources,
equipment and machineries plus materials for the mobilisation work (Paz et al, 2018).
The financial manager can proper estimate the project cost along with all expenses
required for the mobilisation work so that it can manage over the cost and control it.
f. Programme control
Programme and compliance is always a challenge for the construction company as
they are not following a proper ethics and compliance programme for conducting their
work. Turing the compliance programme into competitive advantage is required for the
construction organization to mobilise their business to other country (Arrenvalagan &

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Mohamed, 2017). With decades of experiences into challenging jurisdictions, the
organization is not able to meet with abstract regulatory construction standards. It is
required to manage by proper implementation of compliance standards so that there is
controlling of the compliance programme (Yang, 2017). It is controlled the risks by
designing to build embedded compliance cultures so that they can adjust changing
demands of the global businesses as well as regulators.
Type of
risk
Likelihood Conseque
nce
Level of
risk
Mitigation steps Risk
treatme
nt
measure
Staffing Possible Major High risk The staffs should require to
maintain security plus
maintenance of the business in
other country. Therefore, in
order to manage risks
regarding staffing, the
construction company should
hire those resources who have
proper knowledge as well as
experience to work in this field
(Shen & Cheung, 2018).
Acceptan
ce
Logistics Possible Moderate Medium
risk
Those risks are managed by
proper selection of the
suppliers those have
experience to work in the
construction field
(Ratnaningsih, Dhokhikah, &
Fitria, 2018). The risks are also
managed by selection of best
warehouse plus distribution
solutions so that cost of
Acceptan
ce

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holding inventory is not
damaging the business of
Fletcher Construction.
Health and
safety
considerati
ons
Unlikely Moderate Medium
risk
The construction company
should implement and prepare
a proper health and safety
policies into the organization
so that the workers can strictly
follow it to avoid any types of
health and safety hazards into
the workplace where they are
worked and involved (Renault,
Agumba, & Ansary, 2016).
Acceptan
ce
Material
supply
Likely Moderate High risk Materials of supply risks are
managed throughout proper
management of the resources
and materials which are
required to mobilise the
business from one place to
other (Mali & Dube, 2018).
The operation manager should
identify proper estimation of
the materials quantity and
materials required for the
project plan.
Acceptan
ce
Cost
control
Possible Moderate Medium
risk
The financial manager can
proper estimate the project cost
along with all expenses
required for the mobilisation
work so that it can manage
over the cost and control it.
Transfer
Programm
e control
Unlikely Minor Low risk It is required to manage by
proper implementation of
Avoid

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compliance standards so that
there is controlling of the
compliance programme. It is
controlled the risks by
designing to build embedded
compliance cultures so that
they can adjust changing
demands of the global
businesses as well as regulators
(Prioteasa & Ciocoiu, 2017).
Table 1: Project Risk Register
Consequence
Likelihood
Insignificant Minor Moderate Major Severe
Almost
certain
Likely Material
supply
Possible Logistics,
Cost control
Staffing
Unlikely Programme
control
Health and
safety
considerations
Rare
Table 2: Risk Matrix
From the above risk matrix table, it is analyzed that there are two high risks such as
staffing as well as material supply risks. There are three medium risks such as cost control,
health and safety considerations and logistics risks. Finally, there is one low risks such as

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programme control. Therefore, the project manager in addition to risk manager can be more
focused on high level risks and those are mitigated properly and urgently. All the high level
risks are accepted after it is mitigated using risk mitigation strategies. Main responsible for
mitigation of the risks are on the risk manager who play a key role in the risk management
plan. The medium risks are also accepted and transferred based on its risk level so that all are
mitigated accurately. Therefore, the risk manager has taken two major risks at high concerns
as well as highest priority such as staffing in addition material supply risks occurred.
5. Identify and describe key tasks and activities need to put in place in order to
minimise these mobilisation risks
The risk manager can manage the mobilisation risks on daily basis so that the project
plan becomes successful. The main reason for this study is assessment of an international
construction market as part of the company efforts to internationalise its business model.In
order to manage the risks, following are the tasks or activities which are required to follow so
that the risk manager can minimize the risks (Shin & Song, 2015). Following are the key
main activities or tasks for minimizing the risks so that mobilisation plan of the construction
company would be successful and it can internationally mobilise in other country.
Identify the risk: The risk manager can identify the risks as well as describes the
mobilisation risks which can provide effect on the project plus its possible outcomes. There
are various techniques which are used to identify the project risks such as project risk
register. The identified mobilisation risks are staffing, logistics, health and safety
considerations, material supply, cost control and programme control (Shahriari, 2019). All
the risks are required to be managed on urgent basis.
Analyse the risk: Once the risks are identified, it is required to determine likelihood
as well as consequences of each project risks. The risk manager develops understanding of

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nature of project risks along with its potential to affect the goals of project along with its
objectives to mobilise the international construction market (Edirisinghe & Andamon, 2018).
Those information are put into the project risk register.
Evaluate the risk: The identified project risks are evaluated and ranked by means of
determining the risk magnitudes that is combination of the likelihood plus consequences.
Based on the risk level, the risk manager and other project team members can take decisions
about acceptance of risks or whether it is serious (Kırılmaz & Erol, 2017). The risk levels are
added to the project risk register.
Treat the risk: It is also defined as the risk response planning. Throughout it, the risks
are assessed the highest ranked mobilisation risks and set plan to modify the risks to get
acceptable risk levels. A risk mitigation strategies are prepared to overcome with all
identified risks (Scholten et al., 2014). Those are risk treatment measures for the highest rank
risks and serious risks and those are added into the project risk register.
Monitor and review the risk: It is the final key project task or activity where the
project manager as well as risk manager can review, monitor as well as track each risks to
determine if those are harmful for the project even after controlling and mitigating the risks
using contingency plan (Holweg & Helo, 2014). All the identified risks are monitored as well
as reviewed so that it cannot cause any critical influences and consequences on the
construction business.
Using those project tasks or activities, the risk manager and project manager can
minimize mobilisation risks from the project plan. Following table shows the main project
activities along with sub-activities of risk management plan which are required to follow
strictly to overcome with the risks (Aven, 2014). The timeline is also provided for each
project risks so that they can minimize the risks within scheduled time for proper

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international mobilisation of current business model of Fletcher Construction, which is the
business unit in Construction Division of Fletcher Building Limited.
WBS Task Name Duration Start Finish
0
Risk Management Plan to minimise
mobilisation risks
130 days Mon 15-04-19 Fri 11-10-19
1 Identify the risks 47 days Mon 15-04-19 Tue 18-06-19
1.1
Recognize the mobilisation risks
based on requirements
32 days Mon 15-04-19 Tue 28-05-19
1.1.1 Staffing 3 days Mon 15-04-19 Wed 17-04-19
1.1.2 Logistics 7 days Thu 18-04-19 Fri 26-04-19
1.1.3 Health and safety 4 days Mon 29-04-19 Thu 02-05-19
1.1.4 Material supply 10 days Fri 03-05-19 Thu 16-05-19
1.1.5 Cost control 2 days Fri 17-05-19 Mon 20-05-19
1.1.6 Programme control 6 days Tue 21-05-19 Tue 28-05-19
1.2 Describe the risks 7 days Wed 29-05-19 Thu 06-06-19
1.3 Use risk management techniques 3 days Fri 07-06-19 Tue 11-06-19
1.4 Prepare risk register 5 days Wed 12-06-19 Tue 18-06-19
2 Analyze the risk 26 days Wed 19-06-19 Wed 24-07-19
2.1 Determine likelihood of risks 5 days Wed 19-06-19 Tue 25-06-19
2.2 Determine consequences of risks 7 days Wed 26-06-19 Thu 04-07-19

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2.3 Determine the risk levels 2 days Fri 05-07-19 Mon 08-07-19
2.4 Understand nature of the risks 4 days Tue 09-07-19 Fri 12-07-19
2.5 Putting information in risk register 8 days Mon 15-07-19 Wed 24-07-19
3 Evaluate the risk 20 days Thu 25-07-19 Wed 21-08-19
3.1 Ranking of the risks 3 days Thu 25-07-19 Mon 29-07-19
3.2 Determine risk magnitudes 6 days Tue 30-07-19 Tue 06-08-19
3.3 Decisions on acceptance of risks 9 days Wed 07-08-19 Mon 19-08-19
3.4 Adding risk rank to risk register 2 days Tue 20-08-19 Wed 21-08-19
4 Treat the risk 19 days Thu 22-08-19 Tue 17-09-19
4.1
Assess higher ranked mobilisation
risks
3 days Thu 22-08-19 Mon 26-08-19
4.2 Set plan to modify the risks 4 days Tue 27-08-19 Fri 30-08-19
4.3 Mitigation strategies 5 days Mon 02-09-19 Fri 06-09-19
4.4 Identify risk treatment measures 7 days Mon 09-09-19 Tue 17-09-19
5 Monitor and review the risks 18 days Wed 18-09-19 Fri 11-10-19
5.1 Review the risks 6 days Wed 18-09-19 Wed 25-09-19
5.2 Monitor and track the risks 3 days Thu 26-09-19 Mon 30-09-19
5.3 Determine nature of the risks after 5 days Tue 01-10-19 Mon 07-10-19

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mitigating
5.4 Final update the project risk register 4 days Tue 08-10-19 Fri 11-10-19
6. Discussion of strategies appropriate to take the company from current business
model to target company
Fletcher Construction should require to adopt strategies so that the company can
better manage their mobilisation from its current business model to its target country, Asia. In
order to do an accurate mobilisation, the construction manager and project manager can
arrange for pre-contract meetings to discuss the strategies throughout the entire mobilisation
stages.
Coordination and communication: The managers should coordinate issues of the
production information and mobilisation issues with the stakeholders so that they are
mitigated on time before it can badly influences on the business functions of Fletcher
Construction. The client and project manager should prepare schedules for structures which
will retain (Glendon & Clarke, 2015). The trade contractors should prepare a detailed
programmes for their works as well as issues and those are coordinated with the construction
manager. They should incorporate entire project programme as well as short time programme
in order to coordinate their works with others (Hopkin, 2018). There should be arrangement
of site communications like information and communication technology (ICT).
Check for insurance policies: They will check for the insurance policies for the
construction work as well as site ownership so that there would be no legal issues at the time
of transferring the business (McNeil, Frey, & Embrechts, 2015). They will also check for
required permissions for movable, approval and agreements required in this case.

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Schedule mobilisation: The construction manager is wished to schedule entire
mobilisation decisions from initial to closure phase so that there are no chances of any delays
in the plan (Burke, 2013). They wish to schedule key dates for attention of the clients like
dates of decisions, date on information release, date of works outside of the trade contracts
and date of mobilisation where the business will movable from one country to its target
country. The client will not approve any programme as approvals are considered to release
trade contractors of obligation for programming mechanisms in order to attain its completion
date. There should be a contract register scheduling which shows where the contract is
placed, who signed it and when along with value of contract (Stark, 2015). It is crucial
information for the mobilisation of business.
Site inspections: The construction manager believes to perform site inspections of the
site where the construction company will mobilise. Before the construction company can
move its business from one place to other, it should require monitoring as well as reporting
arrangements related to implementation of the policies like environmental policies and
procedures (Campbell, Jardine, & McGlynn, 2016). They should be establishment of
inspection regimes as well as quality assurance processes for the mobilisation plan. Before
moving or transferring the business, it is required to inspect the site where the business is
infrastructure and analysis is done on Target Company using PESTLE for determining its
internal and external functions of the country.
Training to workers: It should ensure that the workers those are working in the
mobilisation plan should provide with suitable site induction and training along with all
related information regarding mobilisation so that they can perform their work accurately.
They must be work in the site undue risks of health in addition to safety (Renuka, Umarani,
& Kamal, 2014). Training program is conducted by the trainer so that they can get knowledge

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and skills related works which are require to mobilise construction business from one country
to other.
Commission and geotechnical survey: The project manager as well as construction
manager can perform commissioning along with geotechnical survey of entire mobilisation to
determine if the site and decisions regarding movable is perfect or not (Glendon & Clarke,
2015). They should arrange for required restrictions, diversions of the services plus
connections required for work to carry out. A site waste management plan is also developed
in this case.
7. Conclusion
It is concluded from the entire study is that mobilisation of a business from one country to
other is not easier. There are various risks which are identified in this case when the
construction company is targeting other company to move their business so that they can gain
international business market. The risks which are identified in this case are staffing, material
supply, logistics, health and safety, cost as well as programme control. The risk manager and
project manager takes proper steps to mitigate those risks so that the project can get success
in the international market. Risk management strategies are implemented when the
construction company is moving their current business model to its target company. The
strategies are training to workers, scheduling, coordination and communication, inspection of
site and insurance policies review and finally commission and geotechnical survey. Those
help the construction company to become competitive in the market and gain more
profitability over the globe.

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