Strategic Plan Part 3: Balanced Scorecard and Communication

STRATEGIC PLAN PART 2 14

Strategic Plan Part 2

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BUS/475

February 6, 2017

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STRATEGIC PLAN PART 2

Introduction

Shaw Group Inc. is construction based company and there are intentions to create a new division to boost the profits of the company. The new division will therefore be known as Shaw Construction Vehicles (SCV). As the name suggests, the division will deal in construction vehicles as the main product. This will include the manufacture of these vehicles which will be made available to other construction companies for purchase and renting purposes. In this assignment, I will conduct an environmental analysis and the supply chain analysis of the new division and also evaluate the relevant forces and trends.

SWOT Analysis (Internal Environment)

Strengths

SCV group has High experience in the construction industry.
Plant and equipment speed will speed up construction process.
These vehicles will replace unreliable human labor.
More investors are investing in the construction industry.

Opportunities

Construction industry is highly diversified.
Human beings are always building and therefore, potential for expansion is huge.
Need to save time will prompt contractors to use the vehicles.
Handling human labor is becoming more difficult and expensive year by year.

Weaknesses

SCV group will be facing stiff competition.
Lack of funds may hinder quick development of the vehicles.
Marketing the vehicles will be difficult since SCV is a new entrant to the market.

Threats

Other companies such as CAT are like monopolies.
Construction vehicles are expensive to purchase and maintain.
Some contractors prefer to hire or lease than purchasing the vehicles.

PESTEL Analysis (External Environment)

Political

The political environment has a bearing on construction. A government regime that desires to bring development will bring a boost to the construction industry.

Social

Many people depend on construction jobs to gain some daily bread. Replacing human labor with machines will not be welcomed by many individuals who depend on the jobs as their main source of income.

Economic

Economic levels have an impact on the construction industry. When the economy is doing well, people are willing to invest and this means that they will buy more construction vehicles. When the economy is doing poorly then investment in construction is low.

Environmental

With push to build greener buildings, construction cost is expected to increase. Human beings will be still build as structures and developments are central to the lives of people.

Technological

Technology is pushing the industry towards more efficient modes of construction and this means the use of plant and equipment. Change in technology in the industry is slow and therefore, if adopted by construction companies they will reap the benefits for a long time (Rachet, 2014).

Legal

The government plays a crucial role in the construction industry as it is the main source of job for the industry. The government issues laws and policies that affect how the industry operates (Rachet, 2014).

Strategic Plan Part 3: Balanced Scorecard and Communication 1

Supply Chain Analysis

The supply chain of the construction industry is very unique and plant and equipment are expected to be used to make money. There are business people who merely purchase these construction vehicles for the purpose of leasing or hiring them to people. The demand of these vehicles is dependent on many factors such as the level of construction, and legal factors. Sometime the government can decide that, human labor should be maximized to ensure more people get jobs and this will affect the supply of construction vehicles in the construction project is a small one (Bull, Jobstvogt, Böhnke-Henrichs, Mascarenhas, Sitas, Baulcomb, & Carter-Silk, 2016).

Analysis of relevant forces and trends:

Identify economic, legal, and regulatory forces and trends.

The trend in the construction industry at the moment is to replace the human labor with plant and equipment (construction vehicles) that will ensure that construction activities are completed within the schedule hence saving time. Time is very crucial and this means that delays are very costly within the industry. Due to the inconsistency of human labor and lack of the ability to work as efficient as a machine, plant and equipment will be preferred in the industry. In the recent years, construction has been stretched to the limit, people want to build taller and taller structures and also structures that span long distances and only construction vehicles will ensure that these activities are accomplished efficiently.

With increasing technology and modernization, construction jobs especially in the developed nations is considered a blue collar job and therefore, has high levels of insurance and those who agree to work there not only do they have to work in difficult conditions, but also they risk their lives. Construction vehicles are therefore, needed to ensure that very few individuals work on construction sites to reduce accidents and increase efficiency.

Critique how well the organization adapts to change.

Shaw Group Inc. having been in the construction industry since 1986 understands first-hand the changes in the construction industry. For a change to take place, a lot of time is needed and therefore, incorporating the changes as soon as possible ensures that a company is able to gain competitive advantage over the other companies. The only challenge for Shaw Group is that there are other companies that only specialize in building construction vehicles and have been in the market for longer. Nonetheless, Shaw Group has an advantage, it has been in the industry also longer, though in a different business segment, they can use this as their competitive edge to market the new products from the new division, Shaw Construction Vehicles.

Analyze and explain the supply chain of the new division of the existing business.

The new business division supply chain will involve a complex system. For a construction project to be achieved, the client has to specify when the project should end and most of the time, they need them to end as quickly as possible to save on time. The client who is represented by the lead consultant employs a contractor and it is the contractor who purchases on hires construction vehicles to help him complete the objectives of the project. The higher the number of clients, in need of construction project, the higher the number of contractors and the more construction vehicles will be ordered.

Plans to develop and leverage core competencies and resources within the supply chain in an effort to make a positive impact on the business model and the various stakeholders.

One of the core competencies of the company is their ability to facilitate growth through their values which take account of honesty in decision making, leadership by example and personal accountability. Through these values, the division will be able to become the world’s best construction vehicle manufacturer by attaining extraordinary outcomes for the customers and also building nourishing careers for the employees of this division. All these can be attained if and only if there is constant honesty in decision making, personal accountability and also leading by example. In this way therefore, the vision and values of the division and that of the company are aligned (Mohamed, 2002).

Identify the major issues and/or opportunities that the company faces based on your analysis.

The division will be facing a small issue especially in the developing nations and this is because due to lack of employment, construction industry is the provider of employment. If machines are to replace these human labor, they will have no jobs. This means that in developing nations the market for construction vehicles will be low. Though things are tough in the developing nations, the developed nations provide the largest markets and this is an opportunity for the division to make more revenue. Developed nations have high labor standards and more money is needed to pay them. Construction vehicles will come in handy to ensure that sites have less human labor and more construction vehicles to ensure that construction is more efficient. The increasing population of earth also has led to the demand of housing meaning the business will be booming in the construction industry (Hill, Jones, & Schilling, 2014)

Generate a hypothesis surrounding each issue and research questions to use for conducting analysis.

The following hypothesis will be used:

Human labor will hinder the success of construction vehicles in the developing nations
Construction vehicles will solve human labor problems in developed nations
Construction vehicles will increase efficiency in the construction industry.
The increasing population of the world will bring a boom to the construction industry and this will prompt an increase in the use of construction vehicles.

Research questions will take account of;

Will construction vehicles boost efficiency in the construction industry?
Will intense use of construction vehicles solve the problem of human labor in the developed nations?

Identify the circumstances surrounding each issue; classify the circumstances; attribute the importance of each classification; and test the accuracy of the importance for each classification.

Circumstance	Issue	Importance
Labor problems and job creation	Human Labor	Construction vehicles will solve the human labor problems as machines will replace human labor.
Current construction projects have exceeded the cost initially planned for them and are as well delayed.	Efficiency in Construction	Machines are more efficient that human labor and therefore, this will increase the efficiency in the industry.
Large cities such as New York, Shanghai, London, Nairobi, Sao Paulo and Los Angeles among others have housing problems due to high populations (Wong, & Chan, 2010).	Supplying the demand	The ever high demand of housing for the people of the world will be supplied when construction vehicles are efficiently utilized (Wong, & Chan, 2010).

References

Suh, J. (2014). Theory and reality of integrated rice–duck farming in Asian developing countries: A systematic review and SWOT analysis. Agricultural Systems, 125, 74-81.

Bull, J. W., Jobstvogt, N., Böhnke-Henrichs, A., Mascarenhas, A., Sitas, N., Baulcomb, C., ... & Carter-Silk, E. (2016). Strengths, weaknesses, opportunities and threats: A SWOT analysis of the ecosystem services framework. Ecosystem services, 17, 99-111.

Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic management: theory: an integrated approach. Cengage Learning

Eden, C., & Ackermann, F. (2013). Making strategy: The journey of strategic management. Sage.

Rachet, B. (2014). PESTEL analysis and Porters Five Forces For Innocent Drinks Company. Docs. school Publications.

Balasopoulou, A., Latsou, D., Kousoulakou, H., Michael, N., Mc Kenzie, D., Mair, A., ... & Geitona, M. (2016). The use of PESTEL as a change management tool to inform change management of polypharmacy and adherence within SIMPATHY program. International Journal of Integrated Care, 16(6).

Mohamed, S. (2002). Safety climate in construction site environments. Journal of construction engineering and management, 128(5), 375-384.

Pearce, J. A. & Robinson, R. B. (2013).Strategic Management: Planning for Domestic and Global Competition (13th Ed). New York, NY: McGraw Hill.

Plunkett, W. & Allen, G. (2008). Management: Meeting & Exceeding Customer Expectations (9th Ed.). Mason, OH: Thomson South-Western.

Wong, J. M., & Chan, A. P. (2010). Strategic planning for the sustainable development of the construction industry in Hong Kong. Habitat International, 34(2), 256-263.