KIER Group Strategic Management & Construction Industry Analysis

This case study provides a strategic analysis of KIER Group, a UK-based construction, services, and property development corporation. It examines the company's vision, mission, and external environment using tools like PEST analysis, Porter's Five Forces, and SWOT analysis. The study delves into KIER Group's core competencies, capabilities, and value chain, utilizing the VRIO framework. Furthermore, it explores implementation strategies such as Blue Ocean strategy, BCG growth matrix, Hoshin Kanri, and McKinsey's 7S model. The analysis also covers monitoring and feedback mechanisms like PDCA and Kaizen, aiming to provide a comprehensive understanding of KIER Group's strategic management practices and its pursuit of becoming a zero-accident construction company by 2035. Desklib offers similar solved assignments for students.

Running head: CONSTRUCTION MANAGEMENT
CONSTRUCTION MANAGEMENT
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Table of Contents
Chapter 1..........................................................................................................................................3
1.1. The concept of strategic management..................................................................................3
1.2. Aim and Objective................................................................................................................3
Chapter 2..........................................................................................................................................4
KIER Group’s profile......................................................................................................................4
2.1. Vision of KIER Group..........................................................................................................4
2.2 Mission of KIER Group.........................................................................................................5
2.2.1External environment scanning.......................................................................................5
2.2.2 Porter’s generic strategy.................................................................................................6
2.2.3PEST Analysis.................................................................................................................6
2.2.4 PORTER’S FIVE FORCES...........................................................................................9
2.2.5SWOT analysis..............................................................................................................10
Chapter 3........................................................................................................................................11
3.1 Core Competences and Capabilities...............................................................................11
3.2 VRIO Framework............................................................................................................12
3.3Value chain analysis.........................................................................................................12
Chapter 4........................................................................................................................................14
4.1Blue Ocean strategy..............................................................................................................14
4.2BCG growth matrix..............................................................................................................15

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4.3Hoshin Kanri (3 years strategic plan)...................................................................................15
4.4McKinsey’s 7S......................................................................................................................16
Chapter 5........................................................................................................................................17
5.1PDCA....................................................................................................................................17
5.2Kaizen...................................................................................................................................18
References......................................................................................................................................20

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Chapter 1
1.1. The concept of strategic management
Strategic management of the business operations are reliant on the different activities that
are planned by the ventures. The development of the business operations are related to the
continuous planning, monitoring and analysis of the different necessary modificationss.
Continuous planning and development of the organization influence the same in continuing with
the efficacy of the operations in adherence to the corporate goals of the venture. The concept of
strategic management practices of an organization is reliant on the effective functioning of the
systems in adherence to the objectives of the venture. Hitt and Duane Ireland (2017) opined that
the strategic management practices of an organization involves a combination of best practices
that might be considered by the businesses while operating in different markets. The different
modifications that are planned by the organizations are reliant on the strategic reforms that are
made by the same.
The strategic reforms that are often implemented by the optimizations are dependent on
the efficacy of the operations while adhering to the assessment of the business position and
issues faced by the same. The development of the strategic abilities of an organization would
influence the same in improving the potency of improving the efficacy of the operations in
support of the objectives of sustenance. Therefore, the implementation of the strategic
management initiatives by organizations influence the same in improving the potency of the
same while operating in different markets.

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1.2. Aim and Objective
The aim of the research is to develop a coherent understanding of the market position of
KIER group and the different strategic management procedures that might be considered by the
same while improving the health and safety related operations for transforming the same into a
zero-accident construction company by 2035 (Meyer, Neck and Meeks 2017). On the other
hand, the research will also enumerate a list of recommended activities that might be considered
by the concerned organization in order to develop a situation of incremental values each year.
The research will enumerate the different procedures that might be considered by the
organization with the aim of improving the prospects of growth and expansion in the different
markets.
Chapter 2
KIER Group’s profile
The concerned organization, Kier Group Plc is an UK based construction, services
and property development corporation who maintained the efficacy of the operations in
adherence to the demand of the consumers. The concerned organization was founded on the year
1928 with the aim of improving the construction based operations in adherence to the demand of
the consumers. The revenue and net income of the organization was £4,493.3 million and £88.5
million respectively in the year 2018 (Bettis et al. 2014). The different modifications that are
being planned by the organization supported the same in improving the propositions in
adherence to the demand of the consumers. Simon, Fischbach and Schoder (2014) noted that
the effective functioning of a organization is reliant on the effectiveness of the workforce. Kier
Group holds a total of 20,064 skilled employees which supported the venture in improving the

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potency of the same while operating in different market contexts (Engert, Rauter and
Baumgartner 2016).
2.1. Vision of KIER Group
The vision of Kier Group is to become a world- class customer centric venture through
the development of a wider range of operations in adherence to the developmental aspects of
modifications. The key modificationss that are considered by the organization are related to
investments made by the same in the properties, residential constructions and the development of
the service sectors.
2.2 Mission of KIER Group
The mission of Kier Group is reliant in the minimization of the different accidents that
might challenge the potency of the venture. The minimization of the workplace accidents while
undertaking the constructions would influence the venture in improving the potency of the same
in continuing with the efficacy of the operations through maximized involvement of the
stakeholders. The organization aimed at minimizing the rate of accidents by the year 2035 with
the aim of improving the potency of the same in continuing with the efficacy of the operations.
2.2.1External environment scanning
The external environmental considerations that are commenced by the organizations
influence the same in improving a suitable understanding of the different issues that might be
encountered by the same while operating in the different markets. The revenue raised by the
construction organizations in Great Britain has risen by £109,387 million (Foss and Hallberg
2014). Baumgartner and Rauter (2017) stated that the construction industry experienced
continuous growth by 6.2% while compared to the different other industries. The continuous

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growth of the organizations in the construction industry has significantly modificationsd the
situation of the ventures while operating in the different markets. In a research it was found that
the more than 314,590 firms are operating in Great Britain in the year 2017 (Bergh et al. 2016).
However, it has been noted that the maximized rate of UK trade deficit in construction materials
and components since the year 2017 by £9,909 million with enhanced value of imports
challengeed the potency of the venture in continuing with the efficacy of the operations. The
diverse range of modifications that are commenced by the organizations are reliant on the
efficacy of the operations in adherence to the demand of the consumers. However, it has been
noted that more than 3.6% of the employees suffer from different health and safety concerns
while operating in the construction companies (Nickols 2016). The different aspects of
modifications that might be commenced by the organizations are related to the enhancement of
preventives with the objective of avoiding accidents while working in the different situations.
Again, the construction output in UK is more than £110 billion per annum, which contributes
around 7% to the national GDP (Jackson, Schuler and Jiang 2014). Therefore, the
developments that are made by the organizations influence the same in continuing with the
efficacy of the operations in adherence to the safety and health related concerns of the
employees. The study of the external environment of the organization, Kier Group, would
influence the same in improving a suitable understanding of the position of the same while
operating inn different market situations.
2.2.2 Porter’s generic strategy
The concerned organization might take steps to develop Cost leadership strategy with the
objective of improving the efficacy of the operation in adherence to the demand of the
consumers. The cost leadership strategy of the organization would influence the venture in

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continuing with the efficacy of the operation in adherence to the needs of the consumers. On the
other hand, the product differentiations strategy would influence the venture in improving unique
range of propositions with the objective of attracting the attention of the target consumers.
Therefore, the development of the generic strategies would influence the venture in improving
the operations of the same while operating in the different markets.
2.2.3PEST Analysis
Political  The government of UK imposed
subtle modifications in the operations
with the objective to reduce
the cost of public
sector construction by 20% for growth
(Goldfarb and King 2016). The
imposition of different strategies
challengeed the potency of the venture
in improving the potency of the same
while operating in the different
regions of UK.
 The rigid legislative strategies that are
framed by the Government has
challengeed the potency of the venture
in improving the potency of the
venture in improving the potency of
the same while operating in the
different markets. The Government
Construction Strategy 2016 2020 has
brought about significant
modifications in the operations in
adherence to the different aspects of
modifications in the developmental
procedures. On the other hand, Anti-
trust laws related to Construction and
Materials in the different operations
supported the venture in improving
the potency (Vishnevskiy, Karasev
and Meissner 2016).

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Economic  The GDP in United Kingdom is
reflected to be 2890.00 USD Billion
by the end of the first quarter of 2019.
On the other hand, the projected
growth of GDP in UK is reflected as
3170.00 USD Billion in 2020 (Sousa,
Almeida and Dias 2014). The growth
of the economic situation of UK
would influence the concerned
organization in enhancing the rate of
operations in adherence to the demand
faced by the same while operating in
the different regions. The enhanced
affordability of the consumers will
influence the concerned organization
in improving the operations in the
different regions.
 The growth in the real income of the
different communities in UK has
supported the venture in improving
their propositions while adhering to
the emerging needs of the same.
However, the Brexit might challenge
the potency of the organization
through a slowdown of the consumer
spending by 1.4% (Mahmoudi et al.
2014)
Social  The changing taste and preferences of
the consumers in UK might challenge
the potency of the venture in
improving the propositions. On the
other hand, the organization is
required to develop the potency of the
same through the evaluation of
different required steps and
implementation of the same in the
different units.
 The needs of the people relating to
health and safety might challenge the
potency of the venture in increasing
the amount of productivity. The lack
of suitable mechanisms relating to the

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human health and safety might
challenge the potency of the venture in
improving the operations of the same
while operating in different markets.
Technological  The technological innovations that are
being planned by the competitors
might challenge the potency of the
concerned group in attracting the
attention if the –potential consumers
towards the offerings. Ganah and
John (2015) stated that the larger
markets of UK Construction industry
and infusion of a wider range of
companies might challenge the
potency of the same while operating in
different markets.
2.2.4 PORTER’S FIVE FORCES
a) Bargaining power of the suppliers
Near about every companies within the Construction and Materials industry purchase their raw
material from suppliers (Amin and Smith 2017). Suppliers possess a very dominant position in
this industry and can significantly decrease the margins the company, Kier Group, can earn in its
business market. There are several powerful suppliers within the industrial sector who can make
use of their power of negotiation for extracting higher prices from the companies like Kier.
Hence, it can be said that the bargaining power of the suppliers within the Construction and
Materials industry is high.
b) Bargaining power of the buyers
The buyers within the Construction and Materials industry are often very demanding. They often
wants to purchase the best offerings that are available by means of paying as minimum as
possible. This further out high pressure upon the long term profitability of the company (Wu,
Wang and Wang 2016). The more powerful and smaller the customer base of the company is, the

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higher will be the bargaining power of these consumers and so is their potential of seeking
increasing offers and discounted prices.
c) Threat of new entrants
New companies within the Construction and Materials industry bring in innovation. They bring
in new ways of doing works and also, attracts the consumers towards their businesses. This
further puts high pressure on Kier Group as they then need to lower their pricing strategy and
reduce the costs in order to attract and retain their consumers. With the same, it also compels the
company to provide new value propositions to the buyers. In this way, Kier needs to manage all
these challenges and develop strategy for building effective barriers for safeguarding its
competitive advantage (Tidd and Bessant 2018). Hence, it can be said that the threat of new
entrants for Kier is also high.
d) Threat of substitutes
When any new service or product is introduced in the market that is similar to what consumers
need, the profitability of the industry suffers. For instance, Google Drive and Dropbox etc. are
the substitute to the storage the hardware drives. The threat of these products for the products
and services of Kier is high if they successfully offer a unique value proposition that is different
from the current offerings of the Construction and Materials industry (Afolabi et al. 2017). Kier
Group therefore, needs to become highly service oriented instead of product oriented and must
understand the core requirements of the consumers.
e) Industry Rivalry
Kier Group operates its business in a highly competitive environment. This further influences the
long term profitability of the company. This competitive nature of the industry drives down the
prices and at the same time, decreases the profitability of the Construction and Materials industry

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(Chang, Carroll and Nickels 2018). Therefore, in order to tackle with the intense rivalry among
the current competitors present in the Construction and Materials industry, Kier Group can build
sustainable differentiation and also can build scale ensure that it can compete more effectively in
the market. Furthermore, the company can also engage in collaborations with its competitors for
increasing its market size.
2.2.5SWOT analysis
Strengths Weaknesses
a) The company caters different customer
segments within the Construction and
Materials industry by means of its
extensive and diverse product offerings.
b) It provides some exhaustive options of
product mix (Eisenberg 2018).
c) It has a strong market leadership
position within the industry.
a) The company has no health related
policy.
b) There is high cost of replacing its
current experts
c) The level of loyalty among the suppliers
is very low (Abdullah 2016)
d) The business model of the company can
be easily copied by its rivalries.
Opportunities Threats
a) As the economy of United States is
improving at fast pace as the other
developed economy, the Kier group can
easily expand the business into the US
market.
b) The low rate of inflation can bring in
more stability in the US market and will
enable the credit at low rate of interest to
the consumers of the company (Zur and
Naumann 2018).
a) There is shortage of high skilled labour
force
b) Modifications in the demographics can
be a threat for the company as the baby
boomers are retiring and the new
generation are finding it tough to replace
their power of purchasing (Kier and
McMullen 2018).
c) High competition is putting pressure on
the company given the large base of
customer.