L2 2C11 - Business Strategies and Business Development in Construction Companies
L2 2C11 - Business Strategies and Business Development in Construction Companies
L2 2C11 - Business Strategies and Business Development in Construction Companies
Claudiu Albulescu
Lectures
L1 Trends and challenges for the construction industry
L2 Business strategies and business development in construction companies
L3 Financial management in construction companies
L4 Project management generalities
L5 Project management support activities
L6 Project management systems applied in constructions
L7 Entrepreneurship issues
L8 Standard contracts in civil engineering
L9 Risk management in construction company
L10 Summary and discussion of the exam questions
Applications
A1 General presentation of the case study (WTP Hunedoara)
A2 Financial analysis and management in construction company (WTP Hunedoara)
A3 Cash flow analysis (WTP Hunedoara)
A4 Visit WTP Hunedoara
A5 Projects presentation
Lecture
L10 B.2 2:Mechanical
Businessproperties
strategies andiron,
of cast business
mild irondevelopment in construction
and steel at historical structures companies
European Erasmus Mundus Master Course
L2 BUSINESS STRATEGIES AND BUSINESS
Sustainable Constructions under Natural
Hazards and Catastrophic Events DEVELOPMENT IN CONSTRUCTION COMPANIES
OBJECTIVES
Lecture
L10 B.2 2:Mechanical
Businessproperties
strategies andiron,
of cast business
mild irondevelopment in construction
and steel at historical structures companies
European Erasmus Mundus Master Course
L2 BUSINESS STRATEGIES AND BUSINESS
Sustainable Constructions under Natural
Hazards and Catastrophic Events DEVELOPMENT IN CONSTRUCTION COMPANIES
TOPICS
I. CONSTRUCTION BUSINESS
Definition
Challenges
Business responsibilities
Business failure
II. BUSINESS PLAN
Introduction/Executive summary
Business description
Organizational structure
Market analysis
Investment objectives and planning
Financial planning
Risks
III. STRATEGIC PLANNING
Leadership
Competitive advantages
Integration
Strategy
Building Industry Game
Lecture
L10 B.2 2:Mechanical
Businessproperties
strategies andiron,
of cast business
mild irondevelopment in construction
and steel at historical structures companies
European Erasmus Mundus Master Course
CONSTRUCTION BUSINESS
Sustainable Constructions under Natural
Hazards and Catastrophic Events
TOPICS
I. CONSTRUCTION BUSINESS
Definition
Challenges
Business responsibilities
Business failure
Lecture
L10 B.2 2:Mechanical
Businessproperties
strategies andiron,
of cast business
mild irondevelopment in construction
and steel at historical structures companies
European Erasmus Mundus Master Course
Lecture
L10 B.2 2:Mechanical
Businessproperties
strategies andiron,
of cast business
mild irondevelopment in construction
and steel at historical structures companies
European Erasmus Mundus Master Course
Lecture
L10 B.2 2:Mechanical
Businessproperties
strategies andiron,
of cast business
mild irondevelopment in construction
and steel at historical structures companies
I. CONSTRUCTION BUSINESS
European Erasmus Mundus Master Course
TOPICS
CONSTRUCTION BUSINESS
Definition
Challenges
Business responsibilities
Business failure
Lecture
L10 B.2 2:Mechanical
Businessproperties
strategies andiron,
of cast business
mild irondevelopment in construction
and steel at historical structures companies
European Erasmus Mundus Master Course
Challenges
- the revenue generated by the construction activity exceeds the cost of doing the
work (make profit)
- the cost of the company overhead is affordable based on the projected workload
- the company has the ability to manage the unforeseen events affecting its
business
Lecture
L10 B.2 2:Mechanical
Businessproperties
strategies andiron,
of cast business
mild irondevelopment in construction
and steel at historical structures companies
European Erasmus Mundus Master Course
Challenges
Lecture
L10 B.2 2:Mechanical
Businessproperties
strategies andiron,
of cast business
mild irondevelopment in construction
and steel at historical structures companies
I. CONSTRUCTION BUSINESS
European Erasmus Mundus Master Course
TOPICS
CONSTRUCTION BUSINESS
Definition
Challenges
Business responsibilities
Business failure
Lecture
L10 B.2 2:Mechanical
Businessproperties
strategies andiron,
of cast business
mild irondevelopment in construction
and steel at historical structures companies
European Erasmus Mundus Master Course
Business responsibilities
Lecture
L10 B.2 2:Mechanical
Businessproperties
strategies andiron,
of cast business
mild irondevelopment in construction
and steel at historical structures companies
I. CONSTRUCTION BUSINESS
European Erasmus Mundus Master Course
TOPICS
CONSTRUCTION BUSINESS
Definition
Challenges
Business responsibilities
Business failure
Lecture
L10 B.2 2:Mechanical
Businessproperties
strategies andiron,
of cast business
mild irondevelopment in construction
and steel at historical structures companies
European Erasmus Mundus Master Course
Business failure
- Few construction firms fail from a single cause or from a sudden, catastrophic
event
- The primary causes of failure can be grouped into two categories: external
influences and internal problems.
External Influences
new competition
Lecture
L10 B.2 2:Mechanical
Businessproperties
strategies andiron,
of cast business
mild irondevelopment in construction
and steel at historical structures companies
European Erasmus Mundus Master Course
Business failure
Business failure
Business failure
BUSINESS PLAN
Introduction/Executive summary
Business description
Organizational structure
Market analysis
Investment objectives and planning
Financial planning
Risks
Lecture
L10 B.2 2:Mechanical
Businessproperties
strategies andiron,
of cast business
mild irondevelopment in construction
and steel at historical structures companies
II. BUSINESS PLAN
European Erasmus Mundus Master Course
Executive summary
Main objectives of the company (i.e. became the largest player on the X market in
the residential building field)
Investment description (i.e. structural steel detailing software for design of all steel
structures)
Lecture
L10 B.2 2:Mechanical
Businessproperties
strategies andiron,
of cast business
mild irondevelopment in construction
and steel at historical structures companies
II. BUSINESS PLAN
European Erasmus Mundus Master Course
TOPICS
BUSINESS PLAN
Introduction/Executive summary
Business description
Organizational structure
Market analysis
Investment objectives and planning
Financial planning
Risks
Lecture
L10 B.2 2:Mechanical
Businessproperties
strategies andiron,
of cast business
mild irondevelopment in construction
and steel at historical structures companies
II. BUSINESS PLAN
European Erasmus Mundus Master Course
Business description
Historical background (if it is the case): market share, key financial indicators
(revenues, expenditures, assets, profitability, investments)
!!! Income statement and balance sheet in appendix.
Lecture
L10 B.2 2:Mechanical
Businessproperties
strategies andiron,
of cast business
mild irondevelopment in construction
and steel at historical structures companies
II. BUSINESS PLAN
European Erasmus Mundus Master Course
TOPICS
BUSINESS PLAN
Introduction/Executive summary
Business description
Organizational structure
Market analysis
Investment objectives and planning
Financial planning
Risks
Lecture
L10 B.2 2:Mechanical
Businessproperties
strategies andiron,
of cast business
mild irondevelopment in construction
and steel at historical structures companies
II. BUSINESS PLAN
European Erasmus Mundus Master Course
Organizational structure
Lecture
L10 B.2 2:Mechanical
Businessproperties
strategies andiron,
of cast business
mild irondevelopment in construction
and steel at historical structures companies
II. BUSINESS PLAN
European Erasmus Mundus Master Course
TOPICS
BUSINESS PLAN
Introduction/Executive summary
Business description
Organizational structure
Market analysis
Investment objectives and planning
Financial planning
Risks
Lecture
L10 B.2 2:Mechanical
Businessproperties
strategies andiron,
of cast business
mild irondevelopment in construction
and steel at historical structures companies
II. BUSINESS PLAN
European Erasmus Mundus Master Course
Market analysis
- Market presentation
Segmentation
Clients
Suppliers
Competitors (direct or
indirect)
http://www.bplans.com/building_construction_business_plan/market_analysis_summary_fc.php
Lecture
L10 B.2 2:Mechanical
Businessproperties
strategies andiron,
of cast business
mild irondevelopment in construction
and steel at historical structures companies
II. BUSINESS PLAN
European Erasmus Mundus Master Course
Market analysis
- Marketing strategy
Prices
Distribution
channels
Product mix
Advertising
Promotional
Campaign
http://www.dummies.com/how-to/content/business-marketing-plan-distribution-pricing-and-p.html
Lecture
L10 B.2 2:Mechanical
Businessproperties
strategies andiron,
of cast business
mild irondevelopment in construction
and steel at historical structures companies
II. BUSINESS PLAN
European Erasmus Mundus Master Course
Market analysis
- SWOT Analysis
Strengths: characteristics of the business or project that give it an advantage over
others.
Weaknesses: characteristics that place the business or project at a disadvantage relative
to others
Opportunities: elements that the project could exploit to its advantage
Threats: elements in the environment that could cause trouble for the business or project
L10Lecture 2: Business
B.2 Mechanical strategies
properties of castand
iron,business development
mild iron and in construction
steel at historical structures companies
II. BUSINESS PLAN
European Erasmus Mundus Master Course
TOPICS
BUSINESS PLAN
Introduction/Executive summary
Business description
Organizational structure
Market analysis
Investment objectives and planning
Financial planning
Risks
Lecture
L10 B.2 2:Mechanical
Businessproperties
strategies andiron,
of cast business
mild irondevelopment in construction
and steel at historical structures companies
II. BUSINESS PLAN
European Erasmus Mundus Master Course
Investment objectives
and planning
- Objectives
Plant
Software
Buildings
- Activities/tasks
Design
Preparation
Procurement
Construction
Tests
- Resources
Staff
- Timing (Gant
diagram)
L10Lecture 2: Business
B.2 Mechanical strategies
properties and
of cast iron,business development
mild iron and in construction
steel at historical structures companies
II. BUSINESS PLAN
European Erasmus Mundus Master Course
TOPICS
BUSINESS PLAN
Introduction/Executive summary
Business description
Organizational structure
Market analysis
Investment objectives and planning
Financial planning
Risks
Lecture
L10 B.2 2:Mechanical
Businessproperties
strategies andiron,
of cast business
mild irondevelopment in construction
and steel at historical structures companies
II. BUSINESS PLAN
European Erasmus Mundus Master Course
- Funding requirements
Amount
Timing
- Financial projections
Sales and costs projections
Cash flow
Income statement
Balance sheet
Break-even point
- Financial ratios
Activity ratios (Sales growth, Inventories, Current assets/Total assets)
Debt ratios (Total Debt/Total Assets)
Profitability ratios (ROE, ROA)
Liquidity ratios (Liquid assets/Total assets)
!!! Investment ratios (IRR, NPV, ROI)
http://www.bplans.com/building_construction_business_plan/appendix_fc.php
Lecture
L10 B.2 2:Mechanical
Businessproperties
strategies andiron,
of cast business
mild irondevelopment in construction
and steel at historical structures companies
II. BUSINESS PLAN
European Erasmus Mundus Master Course
TOPICS
BUSINESS PLAN
Introduction/Executive summary
Business description
Organizational structure
Market analysis
Investment objectives and planning
Financial planning
Risks
Lecture
L10 B.2 2:Mechanical
Businessproperties
strategies andiron,
of cast business
mild irondevelopment in construction
and steel at historical structures companies
II. BUSINESS PLAN
European Erasmus Mundus Master Course
- Exit strategy
sale of equity to someone else
mergers and acquisitions
downsize operations
employee buyouts
Lecture
L10 B.2 2:Mechanical
Businessproperties
strategies andiron,
of cast business
mild irondevelopment in construction
and steel at historical structures companies
III. STRATEGIC PLANNING
European Erasmus Mundus Master Course
- Construction: very risky, low profit margins (less than 10% ROI)
- Success depends on how well it: cope with clients and outperforms competitors
- Realities: How do you build something more than jobs? How do you make
better than average profits? How do you become an enduring, great business???
- Without planning you depend on luck!
Leadership
Competitive advantages
Integration
Strategy examples
Lecture
L10 B.2 2:Mechanical
Businessproperties
strategies andiron,
of cast business
mild irondevelopment in construction
and steel at historical structures companies
III. STRATEGIC PLANNING
European Erasmus Mundus Master Course
Leadership
Lecture
L10 B.2 2:Mechanical
Businessproperties
strategies andiron,
of cast business
mild irondevelopment in construction
and steel at historical structures companies
III. STRATEGIC PLANNING
European Erasmus Mundus Master Course
Leadership
Competitive advantages
Integration
Strategy examples
Lecture
L10 B.2 2:Mechanical
Businessproperties
strategies andiron,
of cast business
mild irondevelopment in construction
and steel at historical structures companies
III. STRATEGIC PLANNING
European Erasmus Mundus Master Course
Competitive advantages
Lecture
L10 B.2 2:Mechanical
Businessproperties
strategies andiron,
of cast business
mild irondevelopment in construction
and steel at historical structures companies
III. STRATEGIC PLANNING
European Erasmus Mundus Master Course
Leadership
Competitive advantages
Integration
Strategy examples
Lecture
L10 B.2 2:Mechanical
Businessproperties
strategies andiron,
of cast business
mild irondevelopment in construction
and steel at historical structures companies
III. STRATEGIC PLANNING
European Erasmus Mundus Master Course
Integration
Lecture
L10 B.2 2:Mechanical
Businessproperties
strategies andiron,
of cast business
mild irondevelopment in construction
and steel at historical structures companies
III. STRATEGIC PLANNING
European Erasmus Mundus Master Course
Leadership
Competitive advantages
Integration
Strategy examples
Lecture
L10 B.2 2:Mechanical
Businessproperties
strategies andiron,
of cast business
mild irondevelopment in construction
and steel at historical structures companies
III. STRATEGIC PLANNING
European Erasmus Mundus Master Course
Strategy examples
- Expansion Strategy
Only after: demonstrable track record of success; working capital is sufficient
to support planned growth; the management team is consolidated
Expansion yields inefficiencies and imposes additional costs
Sales growth does not necessarily translate into economic growth
Increased revenues profit
Employee motivation can be a factor
Expansion just for the sake of growth is not an effective strategy
Lecture
L10 B.2 2:Mechanical
Businessproperties
strategies andiron,
of cast business
mild irondevelopment in construction
and steel at historical structures companies
III. STRATEGIC PLANNING
European Erasmus Mundus Master Course
Strategy examples
Lecture
L10 B.2 2:Mechanical
Businessproperties
strategies andiron,
of cast business
mild irondevelopment in construction
and steel at historical structures companies
III. STRATEGIC PLANNING
European Erasmus Mundus Master Course
Strategy examples
Prepare month-to-month cash flow budgets each year, and track results
monthly
Lecture
L10 B.2 2:Mechanical
Businessproperties
strategies andiron,
of cast business
mild irondevelopment in construction
and steel at historical structures companies
III. STRATEGIC PLANNING
European Erasmus Mundus Master Course
Leadership
Competitive advantages
Integration
Strategy examples
Lecture
L10 B.2 2:Mechanical
Businessproperties
strategies andiron,
of cast business
mild irondevelopment in construction
and steel at historical structures companies
III. STRATEGIC PLANNING
European Erasmus Mundus Master Course
Lecture
L10 B.2 2:Mechanical
Businessproperties
strategies andiron,
of cast business
mild irondevelopment in construction
and steel at historical structures companies
CONTACT
claudiu.albulescu@upt.ro
http://www.ct.upt.ro/suscos/index.htm
http://steel.fsv.cvut.cz/suscos