Strategic Business Analysis: Value Creation in International Firms

This report analyzes the value creation strategies of Fosroc, an international building chemical manufacturing company, in the context of the statement: "The tools and techniques that were covered in the Strategic Business Analysis courses are very useful in providing decision-oriented information to senior management in my organisation and such information will ultimately enhance its corporate value." The report examines Fosroc's proficiency in marketing and pricing analysis, strategic thinking, strategic marketing analysis and budgeting, financial analysis in product portfolio management, and pricing methods. It further explores Fosroc's strategic value creation through promotion strategies (push and pull), human resource management, supply chain management, performance valuation, strategic financial structures, and risk management. The analysis highlights the company's strengths in strategic marketing, budgeting, and supply chain management, while also identifying areas for strategic development, such as expanding its market presence in key construction markets like the USA and China. The report underscores the importance of decision-making tools in enhancing corporate value and discusses the applicability of these tools within the context of Fosroc's international operations.

Running head: VALUE CREATION
Value Creation of International Companies
Name of the Student:
Name of the University:
Author Note:

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Table of Contents
Introduction:....................................................................................................................................2
About Fosroc:..................................................................................................................................2
I) Proficiency in Marketing & Pricing Analysis:.............................................................................3
Strategic Thinking:......................................................................................................................3
Strategic Marketing Analysis and Budgeting:.............................................................................4
Financial Analysis in Product Portfolio Management:................................................................5
Pricing Methods and Strategies:..................................................................................................5
Financial Dimensions of Pricing in International Business Strategies:.......................................5
Lump sum contract:.................................................................................................................5
Unit price contract pricing:......................................................................................................6
Strategic Scorecards:...................................................................................................................6
Promotion: Push strategy & Human Resource Management:.....................................................7
Promotion: Pull Strategy & Intergrated Marketing Communication:.........................................7
Supply Chain Management and the Place Distribution Decision:...............................................8
Performance Valuation and Strategic Financial Structures:........................................................8
Strategic Value Analysis:............................................................................................................9
Risk Management – Corporation Radar and Early Warning systems:........................................9
Conclusion:......................................................................................................................................9
References:....................................................................................................................................10

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Introduction:
Business organisations in order to maintain their market positions and high revenue
generation, have to form aggressive business strategies. They are under continuous pressure to
make accurate business decisions. These business decisions today rest on diverse tools and
techniques. The aim of the business decisions are not only generating higher profits but also
creating values to the companies concerned and their stakeholders. There three facts can be
summarised in the statement, “The tools and techniques that were covered in the Strategic
Business Analysis courses are very useful in providing decision-oriented information to senior
management in my organisation and such information will ultimately enhance its corporate
value.” The aim of the paper would be analysing the roles of the decision making tools in
ensuring accurate business decision making in companies. The paper would also aim to explore
how these decision making tools can be used by the companies to create corporate value. The
discussion would be centred on Fosroc, an international building chemical manufacturing
company based in the United Kingdom.
About Fosroc:
Fosroc is a Britain based private sector company which deals in building chemicals. The
product solutions of the company include adhesives, concrete admixers, cement additives,
concrete repair, grouts and anchors, industrial flooring, joint sealants, protective coatings and
waterproofing. The sectors which the company serves consists of concrete, buildings, cement,
airports, road construction, railways, water management, marine, power, oil and gas, chemical
process and industrial chemical technology. The main markets of the company are Europe,
Africa, India, Middle East, North Asia and South Asia. The company has no direct presence
in the Americas. The company however, is represented by its distributors in regions where it has

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no direct presence (Fosroc.com. 2019). The company markets its products to the companies
operating in diverse sectors like construction and infrastructure. The clientele of the company
range from business organisations to government departments. Fosroc, being a private company
does not publish its financial data. However, considering its market presence and strong clientele
base, it can be established that it is financially extremely strong.
I) Proficiency in Marketing & Pricing Analysis:
The following are the aspects which would be covered in order to conduct a marketing
and pricing analysis of Fosroc:
Strategic Thinking:
Fosroc uses strategic thinking to make business strategies. Nickols (2016) mentions that
strategic thinking involves identifying long term strategic goals which business organisations
seek to achieve. As far as Fosroc is concerned, the company engages in strategic thinking to
identify the business goals it aims to achieve. This is evident from an analysis of the official
website of the company which reveals substantial information about its strategies. First, the
company has different types of products aligned to each market. The website of the company
gives a complete information about the products available in a particular country. This means
that the business clients like the construction companies can gain detailed information about the
products which they can obtain to execute projects in the country. For example, if a construction
company takes up a project in Denmark and aims to procure building chemical products from
Fosroc, it can gain information about all the products the latter markets in the country. Secondly,
the strategies which Fosroc has taken in terms of choosing the host markets also reveals a great
deal of strategic thinking. For example, the main construction markets in the world are Australia,
Japan, the UK, Germany, Italy, India, China, the USA, France, Brazil and Russia

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(Prnewswire.com. 2018). The company enjoys direct presence in markets like India but has no
direct presence in significant construction markets like the USA and China. This means that the
strategic thinking of Fosroc needs further development. The company should enter the new host
countries like China which are booming construction markets (Buehring and Liedtka 2018).
Strategic Marketing Analysis and Budgeting:
Fosroc adopts a very strong strategic marketing analysis and budgeting. As far as the
strategic marketing analysis of Fosroc is concerned, it can be established that the company
adopts marketing analysis decision making tools like PESTEL and Porter’s five forces model.
For example, the company is present in markets like India which are booming construction
markets. This clearly shows that the company has conducted market analysis of several markets
to identify the markets in which there exists a strong demand for construction chemicals owing
to their booming construction industries. Similarly, the product line of the company consists of
products like waterproofing products and monolithic surface hardening compound. This
extensive product line of the company gives it competitive advantage in the market which makes
it difficult for the competitor products to substitute it. Thus, it can be it can established that
Fosroc conducts an exhaustive strategic marketing analysis prior to making its marketing
decisions.
Fosroc is a private limited company which is not listed on any stock exchange. The
company as a result does not publish its financial statements like cash flow statements and
balance sheet. However, an analysis of the project executed by the company in the past like the
Bideford Long Bridge, the UK and the Burj Al Arab Dubai, establish the strong budgeting
capabilities of the company. Thus, it can be established that Fosroc is strong in terms of strategic
marketing and budgeting analysis.

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Financial Analysis in Product Portfolio Management:
The financial analysis of the product portfolio management of Fosroc reveals that the
company has a very strong product portfolio management. For example, the product Auracast
270M is available in both 200 kg drums and in forms of bulk containers. This means that the
company is able to serve both small scale construction companies as well as large scale
construction companies. This means that the company is able to generate immense revenue by
catering to a large numbers of projects in its different markets. Thus, it can be established that
the financial analysis of the product portfolio is extremely strong and aligned to the business
aims of the company.
Pricing Methods and Strategies:
Fosroc uses diverse pricing methods and strategies. For example, while pricing particular
projects, the company takes into account the scale of the projects concerned, the amount of
materials required and the manpower these projects would involve. The company takes these
aspects to make pricing strategies.
Financial Dimensions of Pricing in International Business Strategies:
Fosroc takes into account different financial dimensions in pricing its international
business operations. One must note that the company procures projects by taking parts in bids
floated by the different owners of the projects like government bodies and transnational
companies. The following are the main pricing dimensions which Fosroc takes into account
while pricing its projects:
Lump sum contract:
Lump sum contracts are contract pricing strategies which involve the owner(s) quoting
the final price of the tender taking into account the factors like the costs of materials and risks

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associated with the projects (Senouci, Ismail and Eldin 2016). The contractor companies like
Fosroc have to agree to certain terms like providing proof of their financial strengths and release
of portions of the total amount payable in percentages upon completion of the specific portions
of the works. Lump sum contract pricing is preferred by most of the project management
companies owing to security of revenue generation. However, the pricing system suffers from
risks of inaccurate estimations. This is because consideration of extremely low costs would have
the project less profitable. On the other hand quoting excessive rates would make the bid less
competitive, thus leading the bidding companies (like Fosroc) lose the tender (Kamalirad et al.
2017).
Unit price contract pricing:
The project management companies can submit their own estimations for the different
milestones of the total project. This enables the companies to fix higher profit percentages for
critical portions of the projects for which they can charge higher prices. The owners of the
projects make payments on the actual costs incurred to execute the projects which means that the
project management companies like Fosroc are in positions to generate higher revenue.
However, if the estimations are inaccurate, the companies may generate lower revenue.
Strategic Scorecards:
The strategic scorecards of Fosroc is strong. The company is present in several booming
markets and holds a strong clientele consisting of government bodies and transnational
companies. Thus, it is evident that the strategic scorecards of the company is extremely strong.
II) Proficiency in Driving Strategic Value

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Promotion: Push strategy & Human Resource Management:
Fosroc uses push strategy to make its products reach number of business customers. This
is because the construction chemical market is extremely competitive with transnational
companies like BASF dominating it. The competition is intensified for Fosroc because its main
competitors like BASF are listed on leading stock exchanges like the LSE (Basf.com. 2019).
These factors itself give these companies more visibility in the market compared to Fosroc which
is a private limited company. Fosroc in order to counteract the competition in the market adopts
push strategies by taking part in procurement tenders. These participations make the company
visible before the clients and earns it new projects.
The company adopts strong human resource management. Tabassi et al. (2016) point out
that strong human resource management enables companies to acquire, retain and channelize
employees towards long term business plans. The management of these companies make
business strategies which are executed by the employees. Successful execution of the strategies
earns companies revenue generation for the construction companies like Fosroc which in turn
fuel their foreign operations. Thus, considering the international operations of Fosroc, it can be
established that the company adopts very strong human resource management strategies. This is
because without employee high retention rates, it would not have been possible for the company
to operate on an international scale (Becker and Smidt 2016). Thus, it can be established that
Fosroc has a very strong human resource management strategy.
Promotion: Pull Strategy & Intergrated Marketing Communication:
Forsoc uses pull strategy and integrated marketing communication. The international
construction chemical manufacturing company applies pull strategy by advertising its products
using IMC. The company gives complete information about its products on its official website

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which enables it to create strong impression among the clients. Secondly, the company is also
present on social media platforms like Facebook which enables it to communicate with its
customers on regular basis. These IMC strategies enables the company to pull or attract new
clients as well as retain its existing clients (Manser Payne, Peltier and Barger 2017).
Supply Chain Management and the Place Distribution Decision:
Forsoc practices a very strong supply chain management and place distribution decisions.
Kim et al. (2016) that operational capabilities of business organisations are dependent on their
capabilities to obtain supply of sustainable raw materials. Thus, in this respect it can be pointed
out that Fosroc has very strong supply chain management strategies which enables the company
to acquire superior quality raw materials in all its markets.
The place distribution strategies of companies enable them to distribute their products in
the market (Genovese et al. 2017). As far as Fosroc is concerned, the company has market
presence in two forms which support its distribution decisions. First of all, the company has
branches in its strategically important markets like Denmark and Indonesia. The company enjoys
presence through distributors in markets in which it has no direct presence.
Performance Valuation and Strategic Financial Structures:
Fosroc enjoys a very strong performance in the market and create value to its
stakeholders. The company operates in the more than 10 countries in the world, catering to
clients like multinational companies and government departments. Thus, it can be established on
this ground that the financial structures of the company is extremely strong.

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Strategic Value Analysis:
An analysis of the scale of business operations of Fosroc clearly points out that the
company is able to create value for its stakeholders like clients. This is evident from the large
clientele which the firm enjoys in more than 10 markerts.
Risk Management – Corporation Radar and Early Warning systems:
Fosroc enjoys a very strong risk management system. The risk management system is
helmed by its top management and forms an essential part of its corporate governance. The early
warning systems enable the managements of the company predict risks and make long term
strategies to manage them.
Conclusion:
It can be concluded from the discussion that Fosroc is a strong company. The company
has direct presence in the form of regional branches in more than ten countries like India. The
company is not listed and as a result it does not publish its performances reports. This reduces its
visibility. The company is not able to generate capital by floating shares in the market which
limits its financial strength. The company has no direct presence in the booming construction
markets like the US and China. Thus, after conducting a detailed analysis of the company two
recommendations can be put forward before the management of Fosroc. First, the company
should get listed. Secondly, the company should enter new booming markets like China and the
USA.

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References:
Basf.com. 2019. Basf.com. [online] Available at: https://www.basf.com/in/en.html [Accessed 31
Oct. 2019].
Becker, K. and Smidt, M., 2016. A risk perspective on human resource management: A review
and directions for future research. Human Resource Management Review, 26(2), pp.149-165.
Buehring, J.H. and Liedtka, J., 2018. Embracing systematic futures thinking at the intersection of
Strategic Planning, Foresight and Design. Journal of innovation management.
Fosroc.com. 2019. Fosroc.com. [online] Available at: https://fosroc.com/english/about-us/
[Accessed 30 Oct. 2019].
Genovese, A., Acquaye, A.A., Figueroa, A. and Koh, S.L., 2017. Sustainable supply chain
management and the transition towards a circular economy: Evidence and some
applications. Omega, 66, pp.344-357.
Kamalirad, S., Kermanshachi, S., Shane, J. and Anderson, S., 2017, May. Assessment of
construction projects’ impact on internal communication of primary stakeholders in complex
projects. In Proceedings for the 6th CSCE International Construction Specialty Conference.
Kim, M., Woo, C., Rho, J. and Chung, Y., 2016. Environmental capabilities of suppliers for
green supply chain management in construction projects: a case study in
Korea. Sustainability, 8(1), p.82.
Manser Payne, E., Peltier, J.W. and Barger, V.A., 2017. Omni-channel marketing, integrated
marketing communications and consumer engagement: A research agenda. Journal of Research
in Interactive Marketing, 11(2), pp.185-197.

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Nickols, F., 2016. Strategy, strategic management, strategic planning and strategic
thinking. Management Journal, 1(1), pp.4-7.
Prnewswire.com. 2018. Prnewswire.com. [online] Available at:
https://www.prnewswire.com/news-releases/the-global-construction-market-was-estimated-to-
be-around-17140-billion-as-of-2017-300713756.html [Accessed 31 Oct. 2019].
Senouci, A., Ismail, A. and Eldin, N., 2016. Time delay and cost overrun in Qatari public
construction projects. Procedia engineering, 164, pp.368-375.
Tabassi, A.A., Roufechaei, K.M., Ramli, M., Bakar, A.H.A., Ismail, R. and Pakir, A.H.K., 2016.
Leadership competences of sustainable construction project managers. Journal of Cleaner
Production, 124, pp.339-349.