Professional Documents
Culture Documents
Example Case Study Report 3
Example Case Study Report 3
UK Limited
Strategic Management in Construction
Table of Contents
1. Introduction ............................................................................................................................... 2
2. Scope & Objectives ..................................................................................................................... 2
3. The Organisation ........................................................................................................................ 2
4. Company Mission, Vision & Values ............................................................................................ 3
5. Financial Performance ................................................................................................................ 4
6. Existing Strategic Position .......................................................................................................... 4
7. Current Challenges ..................................................................................................................... 5
8. Strategic Alternatives ................................................................................................................. 8
9. Summary .................................................................................................................................. 11
10. References ................................................................................................................................ 12
1
Strategic Management in Construction Case Study Student Number: 439777
1. Introduction
The alternatives outlined will take account of the overarching values of the Ramboll Group, ensuring
that any new strategic direction proposed meets the overall aspirations of the organisation.
This report has been compiled utilising available information provided by the Ramboll Group. AM
Strategic Management Consultancy cannot guarantee the accuracy of third party data. The
information and recommendations made in this report should be used by the Ramboll Group only,
to inform further strategic analysis operations.
The purpose of this report is to identify the current challenges faced by Ramboll UK Limited, identify
opportunities available in terms of strategic direction, and make recommendations of available
strategic alternatives to meet the challenges faced by the organisation.
The report will analyse information provided by the Ramboll Group, including their annual report
entitled ‘Creating Value’ (Ramboll Group, 2012) and company profile and information as publicised
on their website.
3. The Organisation
Ramboll UK Limited is the United Kingdom branch of the Ramboll Group, employing over 1000 staff,
within 13 local offices across the country. The Ramboll Group is a leading engineering design and
consultancy company founded in Denmark in 1945 (Ramboll Group, 2012). The Ramboll Foundation
is the main owner of the Ramboll Group, holding 97% of its overall shares, with the remaining 3%
owned by Ramboll’s employees. At present, Ramboll operates within 21 countries globally, with
more than 10,000 staff in 200 offices worldwide.
Buildings;
Transport;
Environment;
Energy;
Oil & Gas;
Telecoms; and
Management Consulting.
2
Strategic Management in Construction Case Study Student Number: 439777
The overall aim of the Ramboll Group is to ensure that the organisation operates with a responsible
business behaviour, which alongside global expertise and local knowledge, has led to a successful
and sustainable business approach. The overarching mission and vision of the Ramboll Group is
outlined below:
Mission
‘To create solutions to our customers that balance human and commercial needs and are genuinely
insightful and progressive.’
Vision
‘To help create inspirational and long-standing solutions that allow people and nature to flourish’
(Best Companies Limited, 2012).
In additional to the mission and vision of the company, Ramboll also strives to ensure that high
ethical standards, responsibility towards society and thriving employees are key elements in their
approach to business. The Ramboll Group operates in line with the United Nations Global Compact,
which outlines the correct business conduct with regard to human rights, labour, the environment
and anti-corruption (United Nations Global Compact Office, n.d.). This commitment to the Global
Compact is reflected in their business Code of Conduct, and drives the outcomes and objectives of
their Corporate Responsibility strategy.
3
Strategic Management in Construction Case Study Student Number: 439777
5. Financial Performance
In 2011, Ramboll’s revenue increased by 13 percent to DKK 6,891 million, or approximately £765
million, compared to DKK 6,075 million or £674 million in 2010 (Ramboll Group, 2012). Organic
growth or growth due to overall business expansion from increased customer base, increased output
per customer or new sales equated to approximately 8 percent of this increase, whilst acquisition of
companies made up the remaining 5 percent. There was a consequent increase in employees of
more than 550 people, reflecting business expansion across the company. Profit before tax
amounted to approximately DKK 295 million (£33 million), which is an increase of 7 percent
compared to 2010 with profit before tax of DKK 276 million (£31 million) (Ramboll Group, 2012).
The Ramboll Group’s Annual Report (Ramboll Group, 2012) identified the overall operating result of
the organisation to be below expectation in 2011, especially within the first two operating quarters
of the year. Performance was contrasting across the organisation, with record breaking results in
some of their larger business units in comparison to poor results within their smaller operations. In
response to this, a number of steps have been taken to strengthen the organisations strategically,
with a view to achieving further profitable growth. These steps included:
Strategic acquisitions and divestments, including 14 acquisitions, the largest being Gifford
LLP acquired by Ramboll UK in April 2011, providing 500 additional skilled employees to form
on the UK’s strongest and broadest engineering and consultancy groups;
Introduction of a ‘Group-Wide’ strategy to further establish the basic core values and vision
of the organisation, alongside outlining the ambition in the lead up to 2015 to become a
‘widely recognised player on the international arena with an undisputed leadership position
in the Nordics’ (Ramboll Group, 2012);
4
Strategic Management in Construction Case Study Student Number: 439777
7. Current Challenges
On investigation of the current performance and strategic position of Ramboll UK Limited, it can be
easily seen that the organisation is performing well within its market sector. The company has
experienced year on year organic growth, success in acquisition and divestment and recognition in
terms of the organisations management and services through numerous industry awards. However,
there will always be challenges within the organisation and its macro-environment that will impact
on the company and influence the strategy adopted in moving forward. In order to identify and
evaluate the current challenges on Ramboll UK Limited, a PESTLE analysis has been undertaken. The
detailed analysis is included in Appendix A for reference. A summary of the key challenges faced by
the organisation is undertaken in the following paragraphs of this report. This will assist in
identifying the key drivers for change required when determining a new strategic direction for the
organisation.
Overview of Challenges
A overview of the extent of the challenges within the macro-environment that are likely to impact
on Ramboll UK Limited is included in Figure2 below.
5
Strategic Management in Construction Case Study Student Number: 439777
Organisational
Financial Challenges
The economic climate has given rise to substantial challenges since the onset on recession. Despite
maintaining a 16-month recovery period within the industry, with notable strong new orders and a
rise in employment coupled with the sector receiving a boost from commercial building (Guardian
News and Media Limited, 2012), there remains significant challenges to construction industry
organisation. These challenges largely relate to the cost of materials and resource, increased
competition across the market from rival companies, and the overall reduction in private and public
spending.
6
Strategic Management in Construction Case Study Student Number: 439777
In 2011, the Ramboll Group has been affected by the political and economic turmoil in various parts
of the world. The year-end result was considered satisfactory, but also indicated that cuts, costs and
losses have been experienced in the organisation. However, at the same time Ramboll believe they
are fully prepared for the future. Focused investments to further strengthen resources and
organisation to achieve this ambition will continue throughout 2012 (Ramboll Group, 2012).
The shift from service areas to markets undertaken by Ramboll UK Limited over recent years has
minimised the operational risks to the company, through limiting exposure to market sectors that
are heavily susceptible to the external economic environment. Ramboll UK Limited also work focus
operations in less economically dependent markets including environmental, energy, waste and
transport, as opposed to housing and property development.
Staffing/Resource Challenges
Social trends indicate an increasing aging population and it is predicted that by 2016 the UK
population will have increased to over 65 million, exceeding 70 million in 2028 (Office for National
Statistics, 2007).
In addition, a nationally recognised skills shortage, and despite the economy beginning to recover, a
severe lack of skills will have an impact on the UK's construction sector in the coming years,
particularly given the scale of the public sector deficit, and the potential funding cuts in the period
ahead which will further exacerbate the loss of skills before private sector investment has fully
recovered (Skills Provision Limited, 2012).
Alongside the skills shortage, the global recession and subsequent budget cuts have resulted in
redundancies and job losses within the industry. This has an impact on remaining staff, as there may
be the same or similar workload and the expectation that this workload can be completed by a
significantly reduced workload.
Environmental Challenges
Climate change is possibly one of the greatest threats to our planet. As sustainability has always
been at the heart of Ramboll’s approach, they have a commitment to adhering to the statements
made by the IPCC (Intergovernmental Panel on Climate Change); by taking climate change into
account in all daily activities and working towards slowing down, diminishing and mitigating its
effects.
In 2011, Ramboll established an internal Group Climate Panel consisting of climate experts across
Ramboll with the purpose of further increasing our focus on climate. Ramboll climate experts have
established a new method for measuring CO2 emissions from work related transport. This method
has been implemented across Ramboll, and all Principal Business Units have reported their CO2
emissions from work related transport and energy (Ramboll Group, 2012).
In addition, changes to legislation can have a significant impact on the operations of the
organisation, with the potential for significant additional workload required in order to implement
new legislation.
7
Strategic Management in Construction Case Study Student Number: 439777
8. Strategic Alternatives
In order to begin to develop an alternative strategy for Ramboll UK Limited, moving forward into
2012 and beyond, an analysis of the organisation in terms of business, resources and operating
environment has been undertaken using a SWOT matrix analysis.
Internal strengths;
Internal weaknesses;
Opportunities in the external environment; and
Threats in the external environment (tutor2u, n.d.)
Strengths Weaknesses
Opportunities Threats
8
Strategic Management in Construction Case Study Student Number: 439777
The SWOT Matrix Analysis has identified areas of opportunity available to Ramboll UK Limited, in
order to develop a revised strategy to achieve the overall mission and objectives of the organisation.
From this analysis, three strategic alternatives have been identified:
Market Development;
Diversification;
Joint Ventures, Mergers & Acquisitions.
Market Development
An organisation follows a market development strategy for a current product when it expands the
potential market through new users or new uses. New users can be found in new geographic
segments, new demographic segments, new institutional segments or new psychographic segments.
Another way is to expand sales through new uses for the product (theproduct.com, 2012).
Market development may include offering new products and services to existing clients, existing
products or services to new clients, or new products or services to new clients.
9
Strategic Management in Construction Case Study Student Number: 439777
Ramboll UK Limited could utilise market development to expand into new markets within the
industry or to further develop their international operations. This strategy interlinks with
diversification.
Diversification
Ramboll UK Limited operate across a number of multi-disciplinary markets within the UK, supporting
a global organisation operating in numerous markets across the world. There are however,
opportunities within the sector that may be available to boost growth and enhance their
competitive platform within the market. From interrogation of the seven markets under which
Ramboll UK Limited operate, the following sectors were identified that could be developed into
further service areas within these existing markets:
Highways;
Infrastructure; and
Residential.
These market sectors may prove particularly lucrative for engineering consultancies within the UK,
as there is an increasingly aging infrastructure including the highway network, drainage systems and
obsolescence and new technologies arising within utilities. In addition, the residential housing
industry within the UK is one of the strongest markets within the construction sector, with demand
remaining largely buoyant throughout the recession and continuing financial difficulties.
Diversification introduces numerous opportunities and risks for the organisation. New market
services may fail due to lack of knowledge and expertise, weak customer base, diversion of resource
from key market areas and inadequate performance in comparison to organisations established in
the market sector. Advantages include increased and diversifying customer base, distribution of risk
across market sectors, increased revenue through new avenues of operation and increased skills and
expertise to utilise in other service areas.
Ramboll UK Limited has already undertaken numerous successful acquisitions and mergers, including
most notably Gifford LLP in April 2011. This acquisition strengthened the organisation with skills and
expertise within new service areas, in addition to boosting the workforce by almost double, adding
500 skilled employees to the organisation. Ramboll’s success in acquisitions makes this strategy for
future growth and development of the organisation, likely to be repeated in future. The benefits of
mergers and acquisitions include developing complimentary skills, increasing skills pools, broadening
and developing expertise, access to new markets, reduced competition. In addition, the current
financial climate may increase the availability of companies looking to merge or be acquired by other
companies.
In terms of joint ventures, Ramboll UK Limited may look to establish frameworks, in order to provide
broader or strengthens skills and expertise, or acquire additional resource to compliment the
organisation. Frameworks may be considered with organisations such as the Highways Agency, local
authorities or other national agencies. There is scope to achieve significant financial and competitive
advantage from collaborating with public sector authorities, due to the different funding
mechanisms in place to finance projects and the type and scale of projects undertaken by such
10
Strategic Management in Construction Case Study Student Number: 439777
authorities. In addition, joint ventures will these public agencies and authorities will assist them,
particularly due to the current economic climate and public sector cuts and austerity measures.
9. Summary
Following the strategic analysis of Ramboll UK Limited, the following statements can be made in
summary:
In terms of financial performance within their market, Ramboll UK Limited have experienced
a 13% increase in growth in 2011 compared to the previous year, in addition to a 7%
increase in profit after tax. This was considered to be satisfactory but below expectations
based on forecasts made previously;
The organisation has confirmed strong order books for the upcoming year, including £49
million in projected fees and work in hand to the value of £3.9 million for 2012. This has
been boosted by major project wins including appointment as lead design partner for the
Forth Replacement Bridge;
Ramboll UK Limited have established a multi-disciplinary service base across seven key
markets including Buildings, Energy, Waste and the Environment. Current employee number
exceed 10,00 staff across 200 offices in 23 countries;
The organisation has succeeded in previous strategies to continue growth and development,
including mergers and acquisitions. A number of strategic alternatives are available to them
in order to further develop and achieve their mission and objectives for the future;
Strategic alternatives that are viable to Ramboll UK Limited and could be utilised to achieve
these objectives include market development, diversification and joint ventures, mergers
and acquisitions.
11
Strategic Management in Construction Case Study Student Number: 439777
10.References
Best Companies Limited. (2012). Best Companies Guide. Company Profile: Ramboll UK. Retrieved
April 15, 2012 from
http://www.bestcompaniesguide.co.uk/company_profile.aspx?CompanySurveyID=45203
Guardian News and Media Limited. (2012). UK construction maintains recovery. Retrieved May 5,
2012 from http://www.guardian.co.uk/business/2012/may/02/uk-construction-maintain-recovery-
markit-cips
Office of National Statistics. (2007). UK population set to increase to 65 million over the next ten
years. Retrieved May 5, 2012 from http://www.statistics.gov.uk/pdfdir/pproj1007.pdf
Ramboll Group. (2012). Creating Value. Annual Report 2011. Retrieved March 27, 2012 from
http://www.ramboll.com/about-us/annualreport
Skills Provision Limited. (2012). Skills shortage 'will harm construction industry'. Retrieved May 6,
2012 from http://www.skillsprovision.co.uk/latest-news/skills-shortage-will-harm-construction-
industry-0432
Theproduct.com. (2012). Market development - growing sales of a current product in a new market.
Retrieved May 2, 2012 from http://www.theproduct.com/marketing/market_development.htm
Tutor2u. (n.d.). Strategy: SWOT analysis – introduction. Retrieved May 3, 2012 from
http://tutor2u.net/business/strategy/SWOT_analysis.htm
12