Business Plan For Medium-Sized Almar Construction Company In Adelaide, Australia

Background of Almar Construction Company

Develop a Business Plan for a Medium sized Construction Company.

The construction industry contributes extensively to the economic and overall growth of the country. This includes civil, mining and building that enhances the living standard of the country. Due to increasing demand of growth and development within countries, the construction industry is also flourishing. Therefore, the organizations in the construction sector have huge chances for increasing their business and customer base by grabbing the upcoming opportunities.  This report consists of developing a business plan for a medium sized construction company named Almar Construction, in Adelaide, Australia. The report consists of a brief background of the organization, the products, and services offered by the organization along with analyzing the current market of the construction industry and opportunities for Almar Construction.

Almar construction is a small to medium sized construction organization established in 2006 in Adelaide. The organization specializes in civil, mining, gas and building in the construction industry (Almar Construction, 2017). The organization consists of experienced and qualified personals that have helped in the growth of the organization since its establishment. The organization also provides solutions in terms of site management and supervision. The organization emphasizes on ensuring customer satisfaction through the service provided them. Reports suggest the current business of the organization is working moderately, as Almar construction encounters challenges in operating the business. Currently, Adelaide has seen increasing growth in the construction industry due to growth and development of the country. As a result, the rise in the competition in the construction industry has hampered the business for Almar construction. The current challenges faced by the organization in the business are gathering enough construction projects, selling their constructed properties to the customers and ability to compete and sustain in the competitive market (Zuo et al. 2012). 

Almar construction is an organization specializing in civil engineering, buildings, gas and mining in the construction industry. The organization offers a range of products and services for the growth and development of Adelaide and the people. As mentioned by Zhang et al. (2013), it is essential for the construction organizations to ensure safety in their business. Therefore, Alma construction needs to ensure safety for the customers of their construction business. The services provided by Alma construction include residential buildings, highways, and roadways. Alma construction has ongoing residential projects along with projects in gas and mining industry. As mentioned by Abdullah, Sidek and Adnan (2012), organizations need to select their customer base according to the budget of their project. This helps in attracting the potential customer base and making profits. The organization used segmentation, targeting and positioning in order to select the customer base.

Describing products and services offered by Almar Construction

The middle earning people are the potential customer base of the Almar construction. The organization is presently emphasizing on residential projects for the people. Alongside, the construction company is also involved in projects related to airports and highways. However, recent reports suggest that the products and services of the company are doing moderately. The organization is facing issues in attracting the potential customers due to increased competition. The business and the operational strategies of Almar construction are failing to attract the potential customers. This might be because of the price of the buildings, safety, and location of the projects. The competitors of Almar construction are thereby, taking advantage of the loopholes in the business strategy of the company and attracting the customer base of the organization.

As mentioned by Abdul-Rahman et al. (2012), the current construction market is growing in order to cope up with the increasing demand of growth and development for the country. However, as argued by Balaban (2012), in spite of growth in the market, the construction sector is becoming saturated. In Adelaide, the number of medium sized construction organizations are growing and offering similar product and services. As a result, the customers are unable to decide the best option. Though the competition in the construction sector is fair but maximizing the customer base and profit for each organization are getting difficult. This is because; most of the construction organizations are offering similar products and services with a slight difference in prices for the customers. According to Cecchetti and Kharroubi (2015), recently, people with minimum capital are establishing new start business in the construction industry. As a result, the markets are getting new players at regular interval thereby, making the construction market more saturated.  However, the market is evolving due to increased demand for growth and development in Adelaide. The construction organizations are building residential projects in various locations in Adelaide in order to improve the standard of living for the people.

The Construction Company Almar Construction and Co. deals in construction and installation of pipelines, underground services and pits, excavations and mining camps. However, the company is a small scale business but its main aim is to provide high satisfaction to its client by providing and delivering the works safely, within deadline, maintaining an effective budget and quality of the work. The services provided by the company takes it to a position of competitive advantage (Zhou, Goh and Li 2015). The competitive advantages of the company are as follows:

• The management team of the company is highly experienced and strongly motivated towards organizational goals.
• The company is spread all over the geographical locations within Australia and focuses to develop its business outside the Australia. This broad geographic and operational base has taken the company to a competitive position.
• The company has an established standard of safety for its employees and has facilitated its employees with vocational training programs.
• The company has achieved staffs of professional engineering and quality assurance.
• The company has good relation with the Unions.
• The company has a good customer base with goodwill and reputation.
• The company has complied to strict legal regulations relating to environment and other necessary registrations under various enactments
• The company has new and updated machineries for performing the projects well.

Analyzing the current market of construction sector

Strength:

A construction company may have different strength available. The company has its strength in delivering the projects times and efficiently. The company has a good reputation in the market for handling projects which involves huge investments. The company has a diversified knowledge and resource in the industry.

Weakness:

The company’s weakness depends on its areas of practicing. The company deals in business only within Australia and thus misses the opportunity to show case the resources of the company in the international markets and so is renowned only within Australia.

Opportunities:

The company is involved in construction work of various industries which is added advantage and leaves the company in a competitive advantage among all other similar companies within Australia (Votano and Sunindijo 2014). The company has excelled itself in varies construction works taking into account from construction in mining to oil and gas pipelines.

Threats:

The company is vulnerable to threats and various new companies are entering the market with large scale investment. The companies that already exist in the market are also a threat to the company as they have accumulated a formulated more capital for the enhancement of the business. Moreover, digitalization of equipment and construction equipments has led to threat to this small scale construction business in Australia.

The construction industry in Australia is declining so as the Almar construction company having a declining phase of its profitable business. The main reason for this declining in the market fof the construction industry in Australia is the aging workforce. The workforce of Australia is aging day by day which gives rise to serious health implications and thus the company has to bear a huge amount for it workers health and safety. Moreover, aging population gives rise to declining in production capacity of the company. Moreover, fast improvement of new technologies in the construction sector has led the company to have a stagnant rate f production per year, which shows that the future trend of the company is very poor (Harris and McCaffer 2013).

The company is in a position where it neither making a loss nor a profit, so to assume a breakeven point of the company to know what is the current financial trend of the company we may calculate the following:

We are taking into consideration the following aspects to calculate the breakeven point of the Almar Construction Company (Ellegaard and Koch 2014).

Evaluation of the Competitive Performance of Almar Construction

Sale Price = $40

Variable Cost = $ 15

Therefore, Contribution Margin = Sales Price – Variable Cost

                                                            = $40 - $ 15 = $ 25

Therefore, Break-even Point = Fixed Cost / Contribution Margin

Where, Fixed Cost = $ 38,000 (Approx)

And Contribution Margin = $ 25

Therefore, the Breakeven point = 1520 units

With the development of new technologies in the construction industry the company needs to transform. The company will have a tremendous opportunity in the development of new technology, materials and tools. The company has to make development in skills used in the construction works, develop talent and establishing a company culture which will help in innovation and improving the skills of the workers (Guo et al. 2016).

Conclusion:

Thus, the Almar Construction has become a brand in the construction industry. The goodwill and reputation of the company has been enhanced due to the efficient work culture involves within the industry. The company can reach at its highest if it can implement the criteria’s as discussed in the recommendation .

References:

Almar Construction. (2017). Almar Construction. [online] Available at: https://www.almar.com.au/construction/ [Accessed 9 Aug. 2017].

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