Strategic Management in Construction and Property Enterprises Report

This report provides a comprehensive analysis of the strategic management of Reliance Infrastructure Limited (R-Infra) within the construction and property enterprises sector. It begins with an executive summary outlining the key factors influencing business survival and success in the construction industry, emphasizing its role in economic growth. The report then delves into the macro and micro environmental factors affecting R-Infra, employing PESTEL and Porter's Five Forces analyses to assess the political, economic, social, technological, environmental, and legal landscapes, as well as competitive dynamics. A critical examination of macro and micro environmental factors is provided, highlighting their impact on R-Infra's performance and profitability. The appraisal of R-Infra's strategy includes an assessment of its resources, capabilities, and business model canvas, providing insights into its operational strengths and market positioning. The report concludes by summarizing the key findings and their implications for R-Infra's strategic direction.

Strategic Management In Construction and Property Enterprises
Name
Date
Table of Contents:
Executive Summary………………………………………………………..3
1.0 Introduction……………………………………………………………….4
2.0 Analysis of the Organisations Business Environment and of Industry
Survival and Success Factors……………………………………………….4
2.1 PESTEL Analysis……………………………………………………...5
2.2 Porters Five Forces…………………………………………………….8
2.3 Survival and Success Factors……………………………………………9
3.0 Appraisal of the Reliance Infrastructure Limited Strategy....................10
3.1 Resources and Capabilities………………………………...…………10
3.2 Business Model Canvas………………………...…………….………11
Conclusion……………………………………………………...…12
References…………………………………………...……………………12
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Executive Summary
In this report we will see how there are several factors that affect the survival and success of business. Thus,
the purpose of the report is to understand the major environment factors that helps the business to drive
the operations into a successful venture. According to the survey, construction industries are the most profit
making industries worldwide, and they are important in infrastructure development. This industry plays role
in economic growth of the country, and that’s why it’s called as sector of economy. The basics of any
construction company is known as planning, designing, construction, alterations, maintenance, repairing
works, and also the demolishing buildings.
Construction and Property Enterprises are divided into three categories. Construction projects consist of
three types of projects like residential projects and construction, non-residential projects and construction,
and engineering projects. Residential projects include home, housing projects, and building garages. Non-
residential construction include small and large buildings, churches, hospitals, schools and stores.
Engineering projects include bridges, roads and constructing the reservoirs. Let’s understand the things in a
more elaborative way.
Introduction
For a better understanding of Effects of Macro and Micro Environmental Factors, we will be considering one
type of industry as an example, which will help us understand, and in the analysis of Macro and Micro
Environmental Factors. Especially for in-depth knowledge of the investigation, and effects of the Macro and
Micro Environmental Factors in the Construction and Property Enterprises, we need to go through one
example cum case study. That's easy to get the right knowledge about the effects of those two variables. So,
let's take an example of one Company, and analyse how the Macro and Micro Environmental Factors affects
it at different levels. For ease of understanding, we are choosing one Company, which is a property industry,
or we can say that it's the real estate industry. Our Company for studying this is Reliance Infrastructure
Limited R-Infra.
The purpose of making this report is to understand the strategies that are followed by the Reliance
Infrastructure Limited (R-Infra). How they decide any strategy, how the implement them according to the
situations, and their strategies work. We have created some of the framework like PESREL analysis, porter’s
five forces to analyse the strategies of this company, and also to understand the macro and micro factors.
We can analyse the Macro factors by analysing the outside conditions, and climate of the market. To
understand the Micro factors, which are controllable by the company can be analysed based on evaluation
of companies’ resources, human resources, and capitals.
2.0 Analysis of R-INFRA Business Environment and
Survival & Success Factor.
2.1 PESTEL Analysis:
PESTEL is basically an acronym that stands for Political, Economic, Social, Technological, Environmental and
Legal environment. This tool is used widely for analysing and monitoring the macro-environmental factors
that possess a deep impact on the performance of the organization. However, PESTLE analysis is very helpful
for those businesses that are new in the market and are looking forward to entering the foreign market.
Politi cal
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The political factors determine the interference of the government in your business. Every type of
government policy, government regulations and rules affect the working of an organization’s operations.
Thus, every business has to thoroughly understand the political environment prevailing and conduct things
accordingly.
Economic
The economic factors used to determine a country’s economic policy that includes economic growth,
exchange rates, interest rates, and several other rates. Basically, the economic factors have an impact on the
purchasing power of the consumers and therefore, it also affects the demand/supply model of the economy.
Social
The social dimension of the environment constitutes the social norms, customs, and values of the population
like growth rate, age distribution, and cultural barriers and so on. Secondly, it shows the willingness of the
person to work under dynamic social conditions and therefore, is considered very vital for conducting
business in an ethical way.
Technological
With the changing market scenario, technological innovations also affect business operations in almost every
industry. Technological factors include innovation, automation, and technological changes that are
important for any organization to adopt in order to create a sense of technological awareness.
Environmental
These types of factors are quite recent add-ons in the market and gained importance due to increasing
concern about the scarcity of raw materials and other ecological aspects like weather, climate, and
environmental fluctuations as well. Moreover, the companies because of the environmental concern are
more into corporate social responsibility and sustainability.
Legal
Well, legal factors may often overlap with political factors, but the legal aspect says that the company or the
organization must know what is legal and ethical to trade. That is the reason the businesses have the legal
advisor for their concern to conduct every operation in a legal and ethical way. The legal factor includes
discrimination laws, consumer protection laws, copyright laws and other patent laws as well.
Critical Analysis of Macro Environmental Factors
As we already discussed, Macro Environmental Factors are those factors which work entirely from the
outside of the organization. Here, in Reliance Infrastructure Limited (R-Infra) the factors that are affecting
the most to the net revenue of the Company are Climatic Conditions, Materials and availability, Technology,
Location, Economic Conditions, Politics, Clients, and Public.
Political and Legal laws that affect the most, it changes in the supply of human resources, health sector,
contract, budget etc.
Government Businesses are nationalized industries, where it reduces the chances of getting a new contract
for Private companies.
Economic Conditions, new and old commercial rules by the country's government affect the Financial
Management, and financial growth of the Company.
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Micro Environment are some of the controllable factors, which can be controlled up to certain limits, and it's
possible to minimize the effects of the elements, and that can be easily done in Construction and Property
Enterprises by applying some strategies to control the internal parameters. Internal factors like scarcity of
raw materials, lesser human resources, unavailability of technologies, bad financial management, lack of
Management, etc. Have an impact on the ultimate revenue of the Company.
Improve in Management can help in better running organization.
Manpower Motivation causes an increase in net revenue
Critical Analysis of Macro and Micro Environmental Factors
Critical Analysis of Micro Environmental Factors
These are the factors that organizations can control by applying the right Strategic Management to the
managerial level. Because these are the internal factors that are profoundly effecting to the Company's net
revenue. Internal factors in the Reliance Infrastructure Limited (R-Infra), like lack of Management, lack of
human resources, lack of Technology, poor work quality, etc. Are profoundly influencing the Construction
and Property Enterprises like Reliance Infrastructure Limited.
Lack of Management:
It is the first, and most affecting factor because lacking in management cause demotivation in the human
resources of any industry. So, they reduced it by applying the right managers at a different level
Lack of human resources:
For better work satisfaction, manpower is required. Which they hire most from South areas and west areas.
Lacking in Technology:
For safety, and attractive construction, we needed best and advanced technologies. That we are updating
time to time for competing with other industries.
Poor work quality:
It happens because of the new human resources. So, they train their workforce at a higher level of
Management skills.
2.2 Porter’s Five Forces Analysis:
Competitive Intensity – HIGH
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In the entry to this field, the company has faced competition with other existing construction companies.
This makes the entry barriers for the company. Nowadays, there are hundreds of construction companies
that provides their services at cheaper rates.
Threats Of New Entrants - HIGH
There were many contractors, using substitutes of materials, technologies to make the construction cheaper
than the Reliance Infrastructure Limited could provide. Day by day, the increase in number of contactors
because of ease of entrance to this field have been increased.
Power Of Customer - HIGH
The competition was increasing day by day, because those who are working already, could control their
prices to pass more tenders. And, it was not possible for Reliance Infrastructure Limited in the beginning.
Because of this, the company has to face many problems in terms of finance.
Power Of Suppliers – Low
The suppliers of raw materials, show attitude, increasing the prices of the materials and they are bargaining
much more. The third party, and the manufacturer try to force the company to give higher rates, otherwise
they are slowing down their supplies.
Threats Of Substitute – High
Customers, who are governments, and the public have much bargaining power to force the company for
lowering the prices of the construction.
2.3 Survival And Success Factors
Reliance Infrastructure Limited, R-Infra is an Indian infrastructure construction company. That is
headquartered in Navi Mumbai, Maharashtra India. This company is evolved in many fields like
infrastructure development, power generation, oil refining, shopping malls, etc. The main projects that a
company focuses in the field of Infrastructure Development is road making. The National Highway projects
were focused in the beginning of this business.
The baseline for any construction, whether its private property or public property is the Land itself. On which
the Company has to make construction and development of roads. For that, it's necessary to find the
undeveloped and vacant lands in most of India.
Connecting residential to industrial areas, and connecting different regions are the main goals of the
Reliance Infrastructure Limited.
Reliance Infrastructure Limited (R-Infra) is showed up here. The type of Company is a infrastructure
development. It's headquartered in Navi Mumbai. Presently they are serving their services all over India. The
company has more than 54 partnerships in the construction field. Company has constructed Versova
Bandera Sealink, and the project was estimated to ₹7,000 crores. Uppur Thermal Power Plant project was
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estimated as more than ₹3,600 crores. National Highway Projects like Bihar to Jharkhand valued as ₹1,880
crores. Along with that, the company was given the contract for building Mumbai metro, Kudankulam
nuclear power plant, and other large projects.
3.0 Appraisal of the Reliance Infrastructure Limited Strategy
3.1 Resources and Capabilities
Resources:
The company operates almost 10,901 retail stores worldwide. Total number of employees working in
reliance industry is, 1,94,054. In all the sectors. They are investing their profits in further expansion of the
business. 46.32% of the total shares are held by the Ambani family.
Net revenue generated by the Reliance Infrastructure Limited is $114 billion. Net income is $16.65 billion.
They have total assets of $165 billion in reliance infrastructure limited. Number of employees in Reliance
Infrastructure Limited is more than 5,800.
The company has more than 60 subsidiaries worldwide.
Capabilities:
The company has ranked by fortune 500, in 51st largest corporations in the India. And is ranked first in the
field of Infrastructure Development. The Reliance Infrastructure Limited can give services in the field of
Construction for electricity generation, natural gas exploration.
They provide their services in production construction, construction for road transportation, and the
construction for defence. The products they can give by Reliable Infrastructure Limited are Electric power,
natural gas, infrastructure, defence and many more.
3.2 Business Model Canvas
Key Partners
Company have
partners in India
US, China,
Pakistan, Australia,
Philippines, Nepal,
Bangladesh and
other countries.
Activities
Construction,
power production,
defence colony,
retail stores,
telecom industry,
and mangoes
production
Value proposition
51st in fortune 500,
and it’s 1st in the
field of
Infrastructure
Development in
India
Customer
Relationship
Overall customer
relationship is
better.
Focused on
customer
satisfaction and
relationships
Customer
segments
Men
Women
Kids
Public
Government
Resources
Latest technologies
Stores
Website
Cost Structure
Valuation cost,
Meetings,
Guest coming,
Channels and
expansion
Online,
Offline,
Revenue Streams
Store sales,
Licencing
Franchise,
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Employees
Sourcing team, and
engineers
Training and
development,
Technology,
Construction and
manufacturing
Stores,
Office
Production
Any Many more
Type of Activity Generic Value Chain Label Examples of Activities and Associated
Capabilities
Primary Activities Operations
Marketing & Sales
Services
Refining of oil, construction and production
Retail stores, reliance petroleum, policies
Infrastructure services, and logistics
Support Services Infrastructure
Human Resource
Management
Technology Development
Development, and construction
Reliable Strategic Management
Retail store's programming, development of
software, Jio telecom
Conclusion:
For concluding our analysis of Macro and Micro Environmental Factors, in the field of Construction and
Property Enterprises, and for the completion of strategic Management in the Construction and Property
Enterprises. We can say that an organization is called as the profitable one when it has a more robust,
strategic management team. If you want to keep your organization to the higher revenue level, especially in
the field of Construction and Property Enterprises, you need to have an awareness of governmental policies,
rules, regulations, and you have to face many external Environmental Factors. As well as Internal
Environmental Factors, which works continuously to bring down your performance to the minimum level, if
you don't have applied the strategic Management, to motivate your human resources as well as to train
them well in the field of Construction and Property Enterprises. From this analysis, we found out that
external Environmental Factors are not in the control of the organization or Company. Because they are
forcing your Company to face many problems, and to slower the performance by putting lots of efforts
negatively, which ultimately results in reductions of final revenue and Company's growth. Internal
Environmental Factors are somewhat in the Company's control, or you can say that they are in absolute
control. Managers need to choose appropriate strategies to be applied on the organization's rules and
regulations in order to train its manpower as well as to improve overall Company's performance to achieve
all the set organization's goals by getting higher revenue. All of the achievements of management goals and
the organization's goals are selected by the selection of the right and practical working strategies, which are
selected or made by the Management. Choosing appropriate Strategic Management will affect positively,
and choose wrong or not practically working strategic Management will result in lousy revenue by making
negative impacts on the organization.
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Referencing / Scope of Research:
References given by the Harvard Referencing Guide were appropriate to the research, and analysis of
strategic Management in Construction and Property Enterprises. Other investigations, which were necessary
to perform to get better output on these projects were helpful and were readily available on the internet. By
doing so, I was able to easily understood The Strategic Management in Construction and Property
Enterprises, as well as the effects of Macro and Micro Environmental Factors in Construction and Property
Enterprises for Reliance Infrastructure Limited, and I've shared some references helping in this analysis.
Research:- Understanding Strategic Management from PPT as well as from the internet.
https://courses.lumenlearning.com/boundless-management/chapter/strategic-management/
Summary:- Understanding Real Estate or Property Enterprises to understand the effects of Macro and Micro
Environmental Factors in Construction and Property Enterprises
https://corporatefinanceinstitute.com/resources/careers/jobs/real-estate/
Research:- Pestel Analysis and Porter’s Analysis of Reliance Infrastructure Limited.
https://www.google.com/amp/s/www.business-to-you.com/scanning-the-environment-pestel-
analysis/amp/
Research:- Reliance Infrastructure Limited, and Scenario Building for getting required knowledge of effective
Strategic Management, and the effects of Macro and Micro Environmental Factors on Reliance Infrastructure
Limited this was helpful for the case study.
https://en.m.wikipedia.org/wiki/Reliance_Infrastructure
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