Introduction- Company Overview
Atkins (WS) PLC (Atkins) is one of the leading engineering consultancy firms. WS Atkins and Partners was established in 1938 by Sir William Atkins in London (Our history – Atkins, 2013). In its early years the company specialised in civil and structural engineering design and offered to clients grew to include specialist service in planning, engineering sciences, architecture and project management after the Second World War.
Scope and Objectives
The main aim of this report is to identify and critique the challenges, identify the opportunities in terms of strategic direction and make recommendations on alternatives strategic to meet the challenges faced by the Group.
The Organisation
Atkins (WS) PLC is headquartered in London, United Kingdom. The company consists 17,756 employees worldwide (staff member at 30 September 2012) with 300 offices around the world including United Kingdom, North America, Middle East, Asia Pacific and Europe with revenue £1.71 billion (full year ended 31 March 2012).
Objectives:
Vision:
Atkins vision is to be the world’s best infrastructure consultancy. Atkins define infrastructure as the physical systems that are vital for any nation or community’s productivity and development, including transportation, utilities, sewage, water electricity and large scale built environments (Our vision – Atkins, 2013) .
Mission:
We plan, design and enable our clients’ capital programmes. We have the breadth and depth of expertise to respond to the most technically challenging and time critical infrastructure projects and to facilitate the urgent transition to a low carbon economy.
Current Challenges faced by Atkins
- Financial Challenge
Atkins‘s business is adversely affected by inadequate running business cost. This happens due to inaccurate estimation scheduled to complete the available work, to purchase the material and meet the labor payment. This poor assumption affects the company as a whole. Also the delay or failure by the subcontractors to complete their portion of the project affects the progress of the company and cause the company to add more cost in order to complete it. As a result of this, the profit margin of the company is greatly affected. Additionally, the price rise of the raw materials significantly contributes to the overrun of the business (BBC News Business, 2011). To avoid this, the Atkins company should properly select the hardworking third subcontractors and the suppliers, always be monitoring the progress of the project schedules to meet the deadline and efficiently manage its operating cost in order to meet the future requirement.
- Environmental challenge- Delivering low carbon society
Climate variation is the extreme global challenge at present. Shifting a low carbon society is as greatest driver for engineers.Keith Clarke (Atkins Chief Executive) examined some of the ways provided by Telford, Brunel and others had done with the encounter of climate variation and providing a low carbon society (The delivery of a low carbon society - beyond rhetoric, 2013). In UK, the Climate Change Act and five-year CO2 budgets will help in evaluating the progress to reduce fossil fuel use substantially by 2050 (Carbon-Climate Feedback Modelling - Microsoft Research, 2013).
- Resources challenge
As a construction company, the company demands more energy to be used. Resources used to generate energy have a great impact to the environment and are limited. Therefore the company has ventured in the renewable energy in order to protect the environment and lessens the effect of the greenhouse gases. The renewable energy will assist the company to meet its total energy demand. Therefore the company has invested in solar energy since their focus is to provide technological and infrastructure services for renewable energy industry. Increasing demand for renewable energy will increase the demand for the company’s services and will provide high growth potential for the company in the future.
- Global and marketing Challenge
In addition, big industry players in traditional energy business are diversifying into renewable energy. Such companies have greater financial leverage and technical capabilities to undertake prestigious projects which will adversely affect the company’s operations. Failure to sustain competition would adversely affect the company’s market share.
Opportunities for Atkins
- Looking Ahead to a Low Carbon Society
The move away from a societal dependence on fossil fuels as its primary power supply is a modern imperative, and is associated with technical innovation. The new green revolution is going to have to be solved by engineers. The Copenhagen Accord, now signed by 126 countries (which account for 85% of CO2 emissions worldwide), is an optimistic starting point.By changing the primary fuel source to electricity generated from renewable sources (nuclear), Atkins can create a broad vision of how the electrified society will be powered.
- Residential Renovation, General Building and New Build
As in case studies, the major development of Atkins is in term of renovation and refurbishment. As an example, the renovation and refurbishment worked in Whitefield, Manchester. These offer a chance for the company to grow the business in this sector as the lifecycle of the building has its age
- Developing Building Information Modelling (BIM) in construction in future
BIM is a speedily evolving technology that is widely used by engineers giving a huge impact on industry in years to come (Vision for the Future of Construction, 2013). By this technology, the Group can minimize the ‘waste’ in term of time, cost and materials created during the construction. BIM approach much more efficient as it shifting many of the perils to the pre-construction phases, therefore permitting the ability to control cost and design fluctuation earlier on. This opportunity helps in analyzing the constructability of a project and detects any clashed where the models have not been design correctly and minimizing late design change hence cost and material. Study conducted by Azhar & Sketto (2010) found that collaborative BIM could eliminate 40% of unbudgeted change; estimate the cost within 3% accuracy; save 80% of the times to generate cost estimate; save 10% of the contract budget through the discovery of clashes and lessen the whole project time by 7%. Atkins will need to spend more time and money to put in use the software and train staff.
7.0 Strategic Alternatives
Competitors
Companies cannot do away with competitions. It is healthful to both the company and the customers. Depending how it is handle out. Competitions always target the market. Therefore, Atkins should analyse the market; specific group of consumers at which a company aims its products and services (Enterpreneur). By analysing Atkins will study its competitor, learn its weaknesses and strengths. This should be conducted by a company that specializes in business information such as Cortera. The information from the competitor will help the firm to advance a competitive edge needed to surpass the other.
Competitors mainly try their best to lead the market and gain the sustainable advantage, in other words, the discrepancy among companies along any dimension of firm features and characteristics that allow one firm to better create customer value than do others which allow it to gain competitive advantage over the others (Emerald | Management Decision, 2013).
Direct competitors of Atkins include:
• BAM Nuttall Limited
• Carillion plc
• Kier Group plc
• Persimmon plc
• WSP Group plc
7.2 PESTLE and SWOT Analysis
As defined by Chaffey, 2012 SWOT analysis is designed to summarize the internal weaknesses and strenghts as well as the external opportunities and threats through digital channel-specific SWOT analysis. Another option is used is PESTLE which will included in Appendix 1. The SWOT Analysis has identified areas of opportunity available to Atkins WS PLC, in oder the develop a revised strategy to achieve the overall mission and objectives of the organisation.
SWOT analysis provides information that is very helpful to the matching the firm’s resources and capabilities to the competitive environment in which it operates. It relates the internal environmental factors which are classified as strength or weaknesses and external environment factors which are also classified as opportunities or threats. This analysis is very instrumental in strategy and selection of the organization.
Atkins should maintain its brand name, since it has an impact to the new and existing potential customers, the good reputation to the customers and have a well-organized and accessible network to its premises and the market. Wherever a weakness arises, the company is responsible to correct it and protect it. In every construction company, the main weakness is the high cost of construction that discourages most of the potential clients, to respond to this, Atkins as one among the construction company should come up and employ the new, cheap and advance technology.
The world is a global business. There is a freedom of emergence of new companies providing the same services as Atkins. This leads to stiff completion in the market posing as a threat to the existing one. Therefore Atkins should be aware about it and plan how any completion should be dealt while keeping all the governmental rules and regulation and have a good reputation.
• Market Development
• Diversification
• Joint Ventures, Mergers & Acquisitions, Partnerships
- Market Development
As in stated in SWOT analysis, the weakness of the company is declining of market share. Market development may include offering the new products and services to existing clients to increase the company annual growth. The company has attributed to a weak competitive position and offering of lack innovative products and services. Thus, innovative and creativity of products should be produced and this could be utilized into new markets within the industry to further develop the international operations.
Atkins can make all the investment in manpower, professional expertise and materials that is required to construct multi-unit commercial or residential properties on the land (North west building contractors for private/public, 2013). Area for development of the projects such as:
• Retail and light industrial parks
• Townhouse & Mews
• Affordable housing projects
• Flat and apartments
- Diversification
Atkins WS PLC main area operations included water, environment, education, aerospace, defense, transport sector and infrastructure design. The company can improve the profit by diversify the construction in other countries in lighting services alongside the infrastructure division. The diversification such as provide a complete solution to clients, create creative products, generate high margin contracts and increase growth by entering new market.
Atkins could develop the use of post-tensioned slab and fibre reinforced polymer (FYP) bridge deck, to the other countries which are now popular among the world in construction. Other than that, the renewable energy resources like thermal or solar electricity could be introduced to replace the primary resources like fossil fuel which are now getting lesser in the world.
However, there are also risks might occurred in diversification due to the lack information or knowledge or expertise. Thus, company should have a sustainable and firm designed before releasing the idea to the new markets.
- Joint Ventures or strategic alliance, Mergers & Acquisitions, Partnerships
Another alternative to enhance the company performance and growth is the joint centure. Atkins WS PLC could consider the Partnership and the joint ventures with another companies to polish and improve the expertise as well as the workforce. The company can consider to join the company which has a broad diversified operations that operates business in the housebuilding and construction industires within UK.
Apart from that, the key competitors in the same industry can be reduced and hence, easily introduce the new products or designs and boost the market share. Partnerships between companies provide a higer chances to provide additional expert engineering support. For example, nuclear energy firm Areva and Atkins formed a joint-venture to compete for UK nuclear fuel management and decommissioning prjects. The companies is expected to bid for contracts for work with UK nuclear sites operators, including used-fuel recycling, decommissioning, waste ,management and transport solutions for each stage of cycle.
Organization strategy
Diagram showing strategic process
Organization strategy
It assists the organization to attain its goals of the mission statement. This can only be achieved by proper exploitation of the resources and strengths. Since it’s only the strategy of the organization that gives direction of the activities of the company and its human resources on they should be combined and carried out in order to achieve the goal laid down
In their strategy, the company should clearly state their purposes, their expected outcomes which can be easily measured, those strategies that cannot be implemented which are termed as the fall-back and also the benefits that the company expects and the cost to be incurred in their daily running of the company. Atkins should consider both in its strength, opportunities, weaknesses and threats (SWOT) analysis when developing the organization strategy. According to SWOT analysis, the company should combine after assessing the environment and analysis of its internal capabilities and resources. With this analysis, the company can easily arrive the matching of the strength, able to eliminate the threats that it’s likely to face or meet and able to avoid the weaknesses that it faces in its running of the business.
With strategic analysis, the Atkins will be in a position to understand their strategic positions. When analysing, environmental, objectives, resources, behaviours and expectations should be encompassed.
Operations strategy is aimed at setting extensive policies and plans to be used in the manufacture resources of the firm to best upkeep the company`s extensive term competitive strategy (STRATEGY DEVELOPMENT PROCESS, 2013).
Atkins must clearly define its objectives and evaluate both the external and internal situation to frame a strategy, implement the strategy, evaluate the advancement, and make modifications as necessary to stay on stack.
Flow chart showing strategy development process
The mission and objectives of the company should be looked into since it contains unchanging values and purposes in order to pursuit the future opportunities. The manager should clearly define the measurable financial and strategic objectives. In addition, environmental scans like internal analysis of the firm, analysis of the firm’s industry and external macroenvironment according to PEST analysis. When dealing with strategy implementation, the organization has to organize the company’s resources and inspiration of the staff to attain the objectives. This can be done by conducting seminars, allowances to the workers, medical facilities, provide transport and comfortable shelter. Atkins being the construction company, it should build good houses for its works. To achieve this, good communication must prevail. Once all the everything has been done, the strategy must be monitored and adjustments done where need arises
PEST Analysis
This is the acronym for Political Economic Social Technological. It is used to describe the framework for analysisng macroenvironmental factors like Political, economic, social and technological. Atkins should be aware about the political factors and must operate within the rules provided by the government. When dealing with tax policy, the company should analyse and see the effect it has to the running of the business. It must pay the tax to the government and also follow rules governing the employment. The company should also adhere to the environmental regulation like regulation of the emission of the harmful gases. Economic factors such as interest rest, economic growth , exchange rates and inflation rates must be considered since it has great impact to the purchasing power of the consumer and firm’s capital cost. The company must deal with factors to accommodate its entire potential consumer to keep it running.
For smooth running of the company, social factors also must be considered. These factors have a direct impact to the customers’ needs and the potential market. The company should consider the population growth, health consciousness, safety, career attitude and age distribution. Since Atkins is a construction company dealing with engineering activities, technology issues should be considered. Poor technology issues minimises the level of production, therefore the company must employ the new advanced technology to reduce costs incurred and promote efficiency.
The Best Strategic Option and Recommendation
The strategic options as mentioned above has its own pros and cons. However, the best solution to enhance the company performance is the joint ventures. The parties will be based in different countries. With this, Atkins will have complementary technology and mangement skills provided by the partners that can lead to new opportunites in existing sectors such as multimedia, communication and the media are merging.
Apart from that, partnership in host country can raise the quickness of market entry (Internationalization in Global Marketing, 2013).
Partner A + Partner B = Joint Venture C
Both the companies share the risks and it does not consume much time to implement. For example, EADS has appointed E2A, a 50:50 unincorporated joint venture with Atkins and AUSY Group as a favourite supplier for engineering services and E2A will deliver high-quality engineering solutions to EADS portfolio of companies. Another example will be the partnership with Areva that the partnership will bid for tier 2 contracts in the UK nuclear sector which now headquarters in Warrington. It is the great option among the three strategic alternatives.
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