Management in Practice: Aurecon SG - Strategic Analysis Report

This report examines the management practices of Aurecon SG, an engineering consultancy firm, focusing on the limitations of traditional analytical frameworks such as PESTLE, VRIO, and Porter's Five Forces in a competitive market. The report identifies gaps in these models and suggests the application of alternative strategies, including the Blue Ocean strategy, McKinsey's 7S framework, the VUCA framework, and dynamic capabilities, to gain a competitive edge. It analyzes the strengths and weaknesses of each approach and compares Aurecon SG with a rival company, Alpha Consulting Engineers, highlighting the benefits of adopting these strategies for improved strategic decision-making and market performance. The report concludes by emphasizing the importance of comprehensive analysis for adapting to market changes and achieving long-term success.

Running head: MANAGEMENT IN PRACTICE
Management in Practice
Name of Student
Name of University
Author Note

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Executive summary
The purpose of this report is to highlight the fact that how using analytical frameworks such
as pestle, vrio and porter 5 model is not adequate to gather all the external and internal
environmental information of the organisation to gain the competitive advantage in a market
where the rivalry is fierce. This report sheds light on the other analytical tools that can be
used to get the necessary information so that the management of Aurecon Sg can take
appropriate strategic decisions.

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Table of contents
Introduction................................................................................................................................3
Research question.......................................................................................................................3
About the organisation...............................................................................................................3
Gaps in the application of external and internal analysis...........................................................4
Application of other management strategies..............................................................................6
Comparing Aurecon Sg with another rival company...............................................................11
Conclusion................................................................................................................................11
Reference..................................................................................................................................13
Appendix..................................................................................................................................16

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Introduction
The purpose of this report is to solve the issues that the management of Aurecon SG is
facing while operating the business in the market of Singapore. In this report an industry and
company research has been performed and relevant business information is synthesised. In
these report, relevant tools, theories and models are identified to get to know the bottom of
the problem (Agwu and Onwuegbuzie 2017). One of the major purposes of this report is to
identify the strength and weaknesses of the tools, theories and models and to suggest the
limitations of those models and what other models or tools can be utilised to investigate the
issues that are currently troubling the management of the organisation.
Research question
RQ1 Is Pestle, Vrio and porter 5 analyses are enough to determine all the factors that are
making the management of the organization facing challenges?
RQ2 What other analytical tools the managements of business organizations like Aurecon SG
to determine the factors that are challenging for the organization?
About the organisation
Aurecon is a well established business organisation that operates in the engineering
management, project management and in consultancy industry majorly based in South Africa
and Australia. Apart from these nations the businesses of Aurecon is spread in the market of
Middle East, New Zealand, and in various countries in Asia too. These services include
environmental management, digital advisory, and also integrated planning for satisfying the
requirements of various business organisations, domestic needs and needs of the government
(Aurecongroup.com, 2018).

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Gaps in the application of external and internal analysis
In this section of this report it is mentioned that why external and internal analysis
tools such as porter 5 model, pestle and vrio framework is not adequate to analyze the risks
that the management of Aurecon Sg is facing nowadays.
Pestle analysis advantages and its limitations.
VRIO analysis importance and limitations
Vrio is an analytical tool that is used to make strategic planning by the managements
of the business organisations. This analytical framework helps the managements of the
businesses to get necessary information to get the competitive advantage (Tolu et al. 2015).
Vrio analysis helps to analyze the internal environment to identify the resources and to
evaluate them. To be precise, it can be said that the information and results gained from Vrio
analysis helps to analyze what competitive advantage the resources will supply the business
organisation.
Limitations of vrio analysis
There are various disadvantages of vrio analysis is that while analyzing at times the
organisation’s overall vision and the strategy gets lost and the operations of the company
breaks down into various segments (Theocharous et al. 2015). While creating efficiencies is
important for any business organisation, Vrio analysis does not allow the managements to
link each activity in the chain together and that might lead to lose sight of how various
activities relate to each other.
Porter 5 model advantages and the limitations
Porters five forces framework is used to get valuable information regarding the
attractiveness of the business organisations by indentifying various forces of the industry and

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by understanding the interaction among them to evaluate the possibility of profitability within
the industry.
Limitations
It can be said that today’s market has been significantly changed from the market of
the late 70s in terms of the rate of rapid changes in the industries and the market structure’s
stability (Agwu and Onwuegbuzie 2017). Immense changes in the technological sector also
affected the contemporary market. This analytical tool has two major weaknesses and the
primary one is in its composition. As a static model, this framework delivers a snapshot of the
industry in a wider scale and it can be utilised for strategizing for short term goals (Miller and
Pessoa 2016). In making long term strategies, it would not help that much to the management
of Aurecon SG. The second major mistake using this framework is that applying this
framework to a specific business organisation rather than on the industry is a gross mistake.
As this model can provide only information to ease the strategic decision making and it does
not work as a company analytical tool. For that, it would be beneficial if the management of
the business organisations use swot analytical tool.
Thus it can be said that the management of Aurecon SG can use other analytical tools such as
Blue ocean, 7s, VUCA and dynamic capability frameworks to analyze the internal and
external environment for securing the best interests of the business organisation.
Application of other management strategies
Blue Ocean strategy- Blue Ocean strategy refers to the existence of less competition
in the market. The strategy applied revolves around identifying a business that has less
pressure from competitors and pricing strategy does not have to be implemented in the
market. The application of Blue Ocean strategy can be implemented in various business and

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sectors across the market (Mebert and Lowe 2017). The application is not limited to any one
particular business and is one of the most effective strategies that define the management of
an organisation. In the modern world, most of the organisations operate under competitions
that provide immense pressure in terms of gaining market share. The production of an
organisation may come under threat with the application of pricing pressure. In the words of
Kim and Mauborgne (2014), such a situation can be termed as Red Ocean strategy that
defines the manner in which organisations tend to combat the pressures in the market.
In the case of Blue Ocean, there are limited opportunities for growth in the market.
However, the opportunities for gaining a huge market share are more consideration the fact
that the number of competitors in the market is limited. In the case of Aurecon, the company
has less threat in the engineering consultancy industry. This is mainly because of the fact that
the company is one of the best engineering consultancy firms in the country. Mi (2015)
commented that despite the fact that certain competitors such as KPMG, Deloitte Touche
Tohmatsu and PricewaterhouseCoopers exist in the market, the competitors does not have the
resources to threat the capabilities that exist in Aurecon.
7s Strategy- McKinsey’s 7-Stratgey is used to define the hard and soft elements that
exist in business management. The hard elements can be easily defined and identified and the
managerial implication for these elements is the fact that it can be influenced. For example,
strategies implemented by Aurecon over the introduction of latest technology in the
organisation can depend upon the structure and system of the organisation. Ravanfar (2015)
stated that the formal process and the IT system of a company are considered as the hard
elements as control over these elements rest with the company. On the other hand, the soft
elements involve the intangible factors that govern an organisation. Most scholars are of the
opinion that without the existence of the hard elements, an organisation cannot grow.
However, Shiri, Anvari and Soltani (2015) defined that the soft elements are as important as

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the hard elements as the culture and values of an organisation are defined with the application
of these elements. One of the important aspects of the application of the 7s strategy is the fact
that every element is connected to one another.
The non-existent of any one of the element can result in the downfall of an
organisation. In the case of Aurecon the company needs to ensure that the implication of the
soft elements are done effectively as the values, style, staff and skills present in the
organisation are its main asset. Gökdeniz, Kartal and Kömürcü (2017) stated that the reason
behind the success of Aurecon lies in the fact that the company relies heavily on the skills of
the staffs.
VUCA- According to Sharif and Irani (2017), the VUCA framework refers to the use
of strategic leadership across organisations. Every organisation requires the application of the
VUCA framework to analyse the volatility, uncertainty, complexity and ambiguity that exists
in the business. The lack of predictability can arise mainly due to the existence of the external
factors of business. This gives rise to the complexity as the issues identified create a chain of
confusion in an organisation. Mack and Khare (2016) stated that most of the times the fear of
accepting the reality gets an organisation to fail in its productivity. The manner in which an
organisation views its current and future state can be analysed with the help of this
framework.
In the case of Aurecon, the application of VUCA framework can help in the retention
of the competitive advantage it has in the market. For example, some of the factors that may
be volatile for the company are the economic condition of Singapore, price of the economy
and the infrastructure that exists within the company. These factors contribute to the
realisation of the uncertainty factors that exist in the economy. For example, usually the
economy of Singapore is rich but there may be times when the economic factor may drop.

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Hence, it is necessary to take into consideration the factors that contribute to the downfall of
the economy. This is considered as the uncertainty venture in which the company need to
comply with the changes in laws of the country (Mack et al. 2015). Hence, it is necessary to
diversify the products in the market and ensure that the policies of the company are kept
intact.
Volatility
Nature of change required
Score based on Aurecon: 3
Complexity
Creation of confused environment
Score based on Aurecon: 2
Uncertainty
Acceptance of uncertainty
Score based on Aurecon: 4
Ambiguity
Gain experience from the uncertainty
Score based on Aurecon: 5
Table 1: VUCA analysis
(Source: Created by author)
Dynamic capabilities- In the words of Helfat and Peteraf (2015), dynamic capability
refers to the capability of organisations to change and maintain the base resource. It can be
related with the ability of an organisation to integrate, build and reconfigure any internal as
well as external changes and competencies that are required in the business market. The
manner in which an organisation can adapt itself in the market defines the factors that are
required for the effective management of an organisation. Teece (2014) observed that the
concept of dynamic capabilities is similar to the concept of operational capabilities.
Comparing Aurecon Sg with another rival company
Alpha consulting engineers pte ltd is a rival company of Aurecon and they are
currently doing good in the market of Singapore where there is fierce rivalry of the similar

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organizations. Alpha was established in the year of 1995 and since then they have secured the
market of engineering consultancy and eventually became a huge name in the market of
Singapore. The management of the business organization have applied analytical tools like
Vuca, Blue Ocean and 7s to determine the external and internal factors that can harm or
prove to be beneficial for the organization along with analytical tools like pestle and vrio.
Thus naturally the management of Alpha has been able to experience productivity and more
profitability in the oddest times in the market of Singapore having numerous competitive
advantage over Aurecon SG.
VUCA: In the case of Alpha, the company has faced similar issues like Aurecon. The
application of VUCA in Alpha mainly focuses on increasing the reputation of the company.
Unlike Aurecon, Alpha does not have the capability or resources to become the best in the
world and expand itself in the global market. Hence, the volatility factors that are faced by
Aurecon remain the same. However, Mack et al. (2015) stated that the fact that Alpha has its
sole business in Singapore makes it possible for the company to remain competitive and
exploit the growing richness in the economic market of the country. The complexity factor
underlines the manner in which Alpha the employees tend to approach a project. The fact that
such an approach makes it difficult to improve productivity of the engineering company
makes Alpha to remain in the uncertainty region. The bright spot is the experience that can be
gained from the uncertain experience. The manner in which Alpha can adapt itself in the
changing market in Singapore can help the company become the best engineering company
in the country. In this regard, the analysis of the VUCA of Alpha can be rated based on the
scale of 0-5.
Volatility
Changing economic condition
Complexity
Nature of approaching work

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Score based on Alpha: 5 Score based on Alpha: 2
Uncertainty
Lack of prediction
Score based on Alpha: 4
Ambiguity
Opportunities for recognition in the local
market
Score based on Alpha: 5
Table 2: VUCA analysis
(Source: Created by author)
7s-Strategy: Alpha engineering can apply the implication of the 7s-Strategy by
identifying the capability that it possess along with the capabilities of the competitors. The
culture and value of the company is such that it believes in the policy of providing quality
work to the customers and in the manner gain their trusts. The connection of every element
with one another can help Alpha to understand the capabilities it possesses. It has already
been seen that the skills of the staffs of Alpha are not as effective as that of Aurecon. Hence,
it is necessary for Alpha to ensure that the employees are developed in manner that can help
the company gain a competitive advantage in the local market. The intangible factors of the
company help in maintaining the balance with the tangible factors. The initial effort of the
company is to ensure that the customers understand Alpha with the applications of the
intangible factors. One of the strategies that Alpha can develop is improving the system. In
order to become the best organisation in Singapore, Alpha needs to develop their systems. In
the modern world, skills of the employees are measured by the ways by which they can
manage the system in an organisation (Ravanfar 2015). Thus, the development of the systems
can help Alpha gain the recognition for the success of the company. Thus, the re-alignment of
the strategies need to be such that Alpha gain competitive advantage in the market and
overtake Aurecon as the leading engineering company in Singapore.

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Conclusion
Thus, it can be concluded that with the popularity of Aurecon, it needs to be seen
whether the company can maintain its competitiveness in the market. The application of the
external factor analysis such as Porter’s five forces, PESTEL and VRIO provide an analysis
of the success criteria for the company. However, certain gaps exist that prevent the
application of these models. The fact that these environmental analyses provide only one part
of information does not justify the manner proper of assessing the environment. The
application of other strategies such as Blue Ocean, VUCA and 7-S framework provide an
analysis of both the external as well as the internal capabilities of Aurecon. Thus, the
application of these strategic tools can help in formulating the capabilities and resources of
the company.