Strategic Management in Construction & Property Enterprises Report

This report provides an analysis of strategic management within the construction industry, with a specific focus on Kier Group Plc. It examines the relevance of strategic management for construction organizations, the inherent challenges in its formulation and implementation, and the application of diversification strategies. The report includes a literature review on diversification, analyzing its role in managing business risk and enhancing profitability. It further explores the resource-based view of strategy and conducts a critical analysis of Kier Group's internal organization, evaluating the viability and implementation of its diversification strategies within the UK construction market. The analysis covers aspects such as goal-setting, information analysis, strategy formulation, implementation, and evaluation, highlighting the importance of adapting to market conditions and maintaining flexibility during economic downturns.

Strategic management in construction
and property enterprises
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Contents
TASK 1............................................................................................................................................3
Analysis the strategic management to construction industry......................................................3
Inherent challenges in the formulation and implementation of strategic management...............4
TASK 2............................................................................................................................................4
Introduction..................................................................................................................................4
Background..................................................................................................................................5
Literature Review........................................................................................................................5
Conclusion.................................................................................................................................12
Recommendation.......................................................................................................................12
REFERENCES..............................................................................................................................15
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TASK 1
Analysis the strategic management to construction industry
Strategic management is based on the systematic approach in major term and increasingly
important responsibility of general management. This is related to the construction industry and
its environment in a way which will ensure its continued success, make it secure from business.
Usually, strategic management is concerned with deciding on the specific strategy and
planning how strategic approach is to be put into certain effect. For Example- Kier Group Plc.
should be considered the strategic management process such as goal-setting, analysis, strategy
formulation, implementation and strategy monitoring.
Gather and analyse construction information- it is one of the important step in which
information gained and accomplishing vision of construction industry. Mainly, it is focused on
the analysis and understanding the needs of business as sustainable entity (Akhmetshin and et.al.,
2018). It provide strategic direction and identifying initiatives that will help construction
business in context of growth or development.
Formulate a diversification strategy- in this process, it reviews the information gleaned
from completing analysis tasks. Sometimes, it also determine the essential resources where
business currently has that can support to reach its goals and objectives.
Implement Strategy- Successful strategy implementation is consider as critical success
factor in context of construction business. This is helping to implement suitable action and
develop a new structure, culture. Everyone within construction industry must be made a clear of
duties, responsibilities. This is completely fits in with entire goal or objective.
Evaluate and Control- strategy evaluation, action control should be consider a proper
performance measurement. This will help to review both internal as well as external issues,
making corrective actions. Construction companies are identified the progress by measuring an
actual result or outcome through strategic plan.
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Inherent challenges in the formulation and implementation of strategic management
At the time of formulation and implementation of strategic management, Construction
industry face a challenging barriers such as lack of consensus, lack of relation between strategic
content and process, poor coherence between planning and resource allocation.
On the basis of analysis, it has been identified the barriers that are found and need to take a
certain action. Most of the challenges in formulation and implementation of strategic
management can be resolved by strategic plan, if in case enterprise failed to realised the
anticipated advantage because of challenge in formulation and implementation (Alfaro, Yu and
Kabeya, 2019).
The challenges are those factor obstruct, prevent and block in the process of strategy
implementation. Thus, it is very hard for the construction company to achieve its desirable goal
or objective.
TASK 2
Introduction
Strategic management is based on the process or method which is primarily formalizing,
long-term planning and implementing about the construction enterprise future goals or
achievements. Strategic approach is consider as an action that managers take to attain one or
more enterprise goals. This report will discuss about the diversification strategic concept in
context of Construction Company. Analysis of enterprise and based on the resource view of
strategy. Critically analyse the viability of diversification strategy for selecting enterprise and
considering finding on the basis of internal analysis. Furthermore, it will describe about the
implementation strategy and examine how diversification strategy will be implemented.
However, Discuss about the Kier group as multi-national construction company, focus on the
discussion related to the activities in UK country.
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Background
Kier Group Plc. is a British Construction, services and property group which is actively
participated into building, civil engineering, and support services. This is a leading service
provider a construction as well as infrastructure services. The overall 4.49 billion in 2019 across
its all construction subsidiaries. This company was founded in 1928 in Stoke-on-Trent,
specialised in the concrete engineering and also helping to expand in house building services in
UK. Kier was consider as public enterprise on stock exchange from 1963 until, it was becoming
acquired by Beazer. The company was founded by Olaf kier.
In 2013, Kier group was acquired the services firm in 221 million and establish a strong
position in marketplace. Afterwards, company was ranked 2th largest contracting firm in UK. In
2015 June, it has been completed the process of acquisition by Mouchel, a business which was
included as infrastructure services and then do some division accordingly. there are 150 Carillion
workers employed on the Smart Motorway and establish a joint venture. During 21 century, it
was expanded through acquisitions and following in January 2018 (Bondarenko and et.al., 2017).
Sometimes, It also maintained share price or cost which plunged following a proper right issue or
problem identified in 2018.
Literature Review
Diversification as a corporate strategy
According to Dźwigoł (2019), Diversification is based on the strategy that help to expand
market share or enter new markets by launching or acquiring new products. It allows a
construction company to grow by expanding market share in an existing market. In essence,
diversification involves innovation and market disruption. The related diversification strategy is
applied when construction firm wish to grow their business in UK markets. In this way, it is
mainly focused on the best practice of introducing sustainable ideas into supply. This will help to
improve the environmental condition and also increased the profitability rate.
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Moreover, it could be identified a new segment of construction industry which have
already used the appropriate strategy. Afterwards, it will become easier to diversify the current
business level. Main advantage of related diversification strategy in construction firm is to
minimize risk of loss- if someone is trying to invest perform poorly over a certain period of time.
Other kind of investments are performed as better way over that same time, it also helping to
reduce the potential loss of any kind of investment.
Diversification into markets unrelated to the construction which provide contractors with
suitable or alternative paths. Therefore, it follows at the down-turns of construction sector and
also helping to increase their flexibility. In order to secure the balanced cash flow and survive at
the time of recession in the construction industry. That’s why, it also identified the
diversification strategy and utilized by construction companies in UK.
Secondly, Diversification as a corporate strategy for managing business risk and also
gaining more profitability, productivity in competitive marketplace. the integration of strategy
with construction and gives as differentiation advantages, independence and robustness to
relevant market condition. Construction companies are majorly focused on the issues related
business project related development. So as it would require to implement suitable strategy that
would support in context of flexibility and efficiency. The flexibility is mainly related with
finding a right path of direction in term of development (Misakov and et.al., 2018). Afterwards,
Construction companies are selecting right path and decide on the action for efficient travelling
along selected path. At the time of recession, construction companies are maintained a proper
flexibility through diversification. Afterwards, it will be reducing outsourcing and capacity
through equipment. Sometimes, flexibility can be increased the success of diversified which
means that construction companies as result of reduce price of sot in excess capacity. Also
generating a cash flow from unrelated markets where they can used for construction project at
the time of trouble situation.
On the other hand, it also focused on the integration into markets related to the
construction usually increase the level of construction work but at certain point, it will be
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decreased the company’s flexibility. This is because of increased sensitivity to construction
market ups and downs. When it can be applied the diversification strategy that will cover all
activities such as production of materials, operations of power plant, manufacturing item.
Related diversification strategy will helping to provide new idea in context of new capabilities
and increasing resources. To provide an excellence services in related to the construction
markets.
Related Diversification strategy implemented in Kier Group in UK
Kier Group firm provides a good example of leveraging as core competency by using
related diversification. Although, construction firm is the best known for its infrastructure
building design or development. Through competing in business, firm developed as unique
ability to focus on the sustainability. When contractors decided to diversify the construction
industry in UK marketplace. Kier group plc was successful in part because of its leveraged
ability within site operations task.
Moreover, Company will try to adopt sustainable approach through related diversification
which may help to resolve a complex situation of environment degradation. Contractors and site
workforces are using sustainable raw materials. This can possible through related diversification
that is always support to acquire more information or data.
The related Diversification strategy is basically used in the areas of selection of raw
materials, equipment’s. That’s why, Kier group has implemented the strategy to provide new and
sustainable raw materials, eliminate a small amount of waste materials. Therefore, it helps to
reduce or minimize the environmental pollution rate in UK. Generally, A construction firm is
investing a lot of money in the innovation but it is protected the actual environment condition.
Therefore, it may arise a complex situation or problem.
Reason for implementing a related Diversification
As per Leiblein, Reuer and Zenger (2018) the demand of related diversification plays an
important role in which measure the overall performance of construction company. For
Example- Kier Group Plc. company should be implemented the related diversification strategy in
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their business. It can be utilised quality, quantity, price or cost of supplies. The primary aim of
constructors are decreasing their dependence on suppliers, try to ensure a materials or
equipment’s. There are helping to satisfy the required quality standards. Moreover, it is also able
to producer at low price or cost. This provide them as cost or price advantage in marketplace. By
using related diversification strategy, Construction Company is also easily differentiate their
construction services by producing and always maintain a high quality of items.
Additionally, construction works are controlling the quality, quantity and cost of
suppliers, unavailability of essential materials used in marketplace. Another driver of
construction business is related to manufacturing, if a contractors are not identified the required
items in market. It would be decided to produce them an appropriate result or outcome.
According to Mafundu and Mafini (2019), related diversification strategy is always
supported the construction company where it help to improve efficiency of operational tasks, by
producing their own raw materials. Therefore, it will be reducing the unavailability of materials,
delay at site. Sometimes, an effective strategic plan may support to improve the performance and
efficiency of construction business. it works increases the actual competitiveness of companies
and result in high profitability or productivity. On the other hand, related diversification is also
supporting the save price or cost. Although some kind of necessary investment is an essential
aspects, in term of long run, pay back with low price or cost of construction.
In above analysis, it has mentioned a reason for using related diversification. The primary
aim is to provide direct benefits, advantage for construction activities. The most importantly, the
reason for implementing strategy because of spreading financial risk or threat, where it will be
utilised capacity or maintain high profitability in UK country. As a result, it has shown that
increased profitability by investing in market but it is not completely important for related
diversification. Whenever, it also minimized the technical construction related risk because it is
directly affecting the overall performance of construction works.
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Critical analysis of internal organisation
An internal analysis is based on the process or method in which identified the Kier group
internal components in the form of tangible as well as intangible. Basically, it is focused on the
necessary resources, assets and processes. An internal analysis help the construction company in
context of decision making. This will help to determine different areas for growth and revision to
form of practical business strategy.
Resource Based View of Strategy used by Kier group
The resource based view is kind of managerial framework used to identify all essential
strategic resources a Kier group can exploit to achieve sustainable competitive advantage. The
Strategists select or chose strategy in order to determine internal resources, capabilities relative
the external opportunities. It enabling an enterprise to implement strategies that improve
efficiency and performance of Kier group plc. In UK.
The Construction Company Such As Kier group plc. Is formulated the resource-based
view strategy to understand the element of construction business in long term competitive
advantage. The importance of strategy is to gain a more sustainable competitive advantage and
maintain tangible as well as intangible resources. This is only possible when Construction firm
unleashes its workforce and implement innovation in the business expansion.
Tangible and Intangible Resources
Tangible assets- in Kier group plc. The tangible assets are physical resources of enterprise
that are measured in the form of quantifiable manner (Misakov and et.al., 2018). It including
construction raw materials, machinery, construction equipment, site, infrastructure building
design and capital etc. on the basis of these tangible assets, Kier group can be easily acquired or
gained more popularity among competitors. Sometimes, it also identified the assets and offer as
less competitive benefit, advantage in term of run long term business running.
Intangible assets- The intangible assets are those resources that are mainly owned by Kier
group as construction enterprise. It does not have required the physical presence. But it also
including brand presence, good will, trade-marks and intellectual property etc. these are consider
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the different kind of intangible assets which may support for improving the entire business
performance. Sometimes, it built over a long time but this cannot be replicated by tough
competitors. Invariably, intangible resources are remains exist within enterprise and its primary
source of sustainable competitive advantage.
On the other hand, it should include growth assets related investment, where it will be
sharing information about property, infrastructure. Generally, it provide long term capital gain
but typically it have been identified the high level of risk or threat. For Example- Construction
firm will use the defensive assets such as cash or fixed interest. It provide low return over long
term business run.
The critical Assumption of RBV
This is the fundamental aspect of principle in context of resource-based view strategy.
Mainly, it explained the competitive heterogeneity between enterprises. Kier group is a leading
enterprise and focused on the long-term competitive advantage. That’s why, it can be used two
critical assumption of RBV such as heterogeneous and immobile.
Heterogeneous- this is the primary assumption in context of Kier group which may be
identified essential resources like machinery item, concrete raw materials. If Kier group has
mixed of resource but it is not able to perform (Nadiia, Anatoliy and Kateryna, 2019). Kier
Group plc. Operate the business and maintain a competitive market. However, it possess the
disparity in business performance because of differences in resources.
Immobile- this is second assumption of resource based view strategy and understand the
resources which are become immobile. It do not move freely from one enterprise to another. In
context of Kier group, it should be maintained the brand equity, intellectual property in proper
manner. In this way, it may support to replicate the resources’ expertise and increase efficiency
of construction works by Kier group in UK marketplace.
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The VRIO Framework
VRIO analysis of Kier group is a resource oriented analysis by using the detailed
provided in construction enterprise. It is always supporting to assume a strategic resources that
can provide an opportunity for Kier group to build as sustainable competitive advantage.
Valuable- The Kier Group plc. Is mainly focused on track or monitor record of
construction project execution. Especially when company consider as valuable aspect to manage
and control the critical resources. It involves financial resources, marketing expertise, human
resources and operational management (Shad, Lai and Bokhari, 2019). These are consider the
important aspect of Kier group to find the valuable assets and increase the demand of
construction works in UK marketplace.
Rare- Kier group needs to ask is whether the resources used by construction company
that are valuable or not. In this way, Kier group is focused on the rare or costly attain. If in case,
it cannot be identified rare business complex situation in context of competitors and new entrants
will easily able to get a lot of access them. On the basis of effective plan, it enters into
competitive landscape.
Costly to Imitate- in present scenario, Construction Company has faced a major threats of
disruption. According to Kier group plc. It seems that identified the core differentiation of
construction works and difficult to imitate. Within specific borders scale, the imitation of
construction equipment’s that can happen in the different ways- duplication of raw materials of
Construction enterprise, tough competitors are coming up with a proper substitute items. These
are majorly disrupt in term of present industry structure and development.
Enterprise competence and capabilities- Kier group is basically measured the actual
capability of enterprise. Sometimes, Kier group has able to measure the actual hardness of
valuable items, rare and difficult to the imitable resources in marketplace. The entire exploitation
level analysis for construction firms regards of raw materials. it can be used into different
perspectives. Enterprise is able to fully exploit the potential aspect of essential or necessary
resources. But still, it has identified a lot of upside.
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In the industry, the exploitation level is dependent on the different execution tasks but it
is mainly handled by team members. Moreover, company cover the good barometer because it
help to assess the overall quality of Human resources. On the other hand, it also measured the
capabilities which tends to increase the demand of enterprise but it depends on the actions which
may build on its strategic resources.
Conclusion
From above discussion, it has concluded that Strategic management plays an important
role to identify the overall performance of construction works in UK marketplace. On the basis
of analysis, it has chosen related the diversification strategy and implemented in the Construction
firm. In this report, it has been analysed the study on the Kier group as multi-national
construction firm and identify its operational activities in UK. Furthermore, it has been
summarised about the performance of firm on the basis of resource view of strategy (RBV).
Moreover, it also critically evaluate the viability of diversification strategy for selecting
enterprise and considering finding on the basis of internal analysis.
Recommendation
To gain more advantage, benefit from related diversification strategy, Kier group plc and
other firms are needed to recommend some important possible criteria. That will help to fulfil all
need or requirement for construction works and develop a flexibility.
 It has recommends that integrated different operational activities at business level, it is
not only corporate level strategy is required. Kier Group plc. Should be integrated with
offering service and support the bundle of execution (Shad, Lai and Bokhari, 2019). It
would be enabled the firm to integrate the activities of units and also reduce price or cost,
this will help to create more value in context of client and enterprise.
 Formal Risk assessment- This is another kind of suggested approach and should be
conducted in additional to the performance measurement processes. For Example- firm
include combining a sensitivity analysis with the help of balanced scorecard. In this way,
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construction firm will be taking an advantage for risk assessment. This is the most
common tool that help to give major support and managing all strategic consequences.
 Contractors are provided the suggestion to find the most profitable approach which lies,
focus on the improving overall performance of construction enterprise. Sometimes, it is
also responsible to handle complex situation or condition in proper manner. At certain
point, there is no all diversifiers are profitable but it is shifting towards essential
resources, where it is the best way to handle valuable cost effectiveness.
 It has suggested that Diversification will unable to thrive, if it will be established a strong
collaboration at high level. But in some situation, all kind of diversifiers, no matter how
they are important, as they long. But at certain level, it is helping to maintain and control
corporate portfolio (Shad, Lai and Bokhari, 2019). Afterwards, it is also engaged with
collaboration of modern technology, resources, skill logistics, sharing knowledge
between workforces.
 It is the vital aspect for contractor where they can act as a strategic centre where it will
recommend to implement a distributed or shared conceptual logical with between
workforces. This is why because of involvement into different strategic parts of
construction firm. It may be allocated a proper amount of resources that will help to
eliminate complex situation or condition.
 Within construction firm, it has suggested that Contractors and workforce are creating
themselves as strategic lock- so that it support to establish a strong position and achieved
as desirable goal or objective. This will make as management diversifiers easier and less
complex situation arise. Give a better recommendation where every corporate executives
are performed the different role in strategic planning- achieved be by understanding
oneself as move especially in growing UK markets.
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 More synergy creation, it also diversified or created by combination of effective strategic
plan simultaneously. Construction firm is to increase the actual production level on the
basis of per unit price or cost. sometimes, it will be reduced. On the other hand, Second
aspect is deploy the exact allotted resources for conducting multiple construction
operations at single time. Afterwards, it look for undervalued assets and also exploit any
kind of opportunities that exist in them. For Example- Kier Group plc. It will be adding
more value in the firm and increase the entire business operations.
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REFERENCES
Book and Journals
Akhmetshin, E.M. and et.al., 2018. Innovation process and control function in management.
Alfaro, E., Yu, F. and Kabeya, P.K., 2019. Strategic management of innovation. In The
Routledge Companion to Innovation Management (pp. 107-168). Routledge.
Bondarenko, T.G. and et.al., 2017. Optimization of the company strategic management system in
the context of economic instability.
Dźwigoł, H., 2019. The concept of the system approach of the enterprise restructuring
process. Virtual Economics, 2(4), pp.46-70.
Leiblein, M.J., Reuer, J.J. and Zenger, T., 2018. What makes a decision strategic?. Strategy
Science, 3(4), pp.558-573.
Mafundu, R.H. and Mafini, C., 2019. Internal constraints to business performance in black-
owned small to medium enterprises in the construction industry. The Southern African
Journal of Entrepreneurship and Small Business Management, 11(1), pp.1-10.
Misakov, V.S. and et.al., 2018. Strategic management of innovative agro-industrial
projects. Amazonia Investiga, 7(14), pp.16-23.
Nadiia, R., Anatoliy, O. and Kateryna, K., 2019. Sustainable Development of Agriculture:
Modeling of Strategic Management in Transition Countries. International Journal of
Economics, Business, and Entrepreneurship, 2(1), pp.75-88.
Shad, M.K., Lai, F.W. and Bokhari, A., 2019. Integrating sustainability reporting into enterprise
risk management and its relationship with business performance: A conceptual
framework. Journal of Cleaner production, 208, pp.415-425.
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