Analysis Of Aurecon, An Engineering Company For Designing Skyscrapers In Singapore

External and internal analysis of Aurecon

The report conducts an analysis of an organisation such as Aurecon. The organisation is an engineering company and dedicates itself in the designing of skyscrapers. The report conducts an external and internal analysis of the company. The external analysis helps in analysing the external business such as the competitors whereas the internal analysis helps in understanding the capabilities of the company. The choices of the customers are highlighted along with a confrontation matrix.

One of the most famous companies in Australia is Aurecon that are indulged in making and designing skyscrapers. The case study shows evidence that Aurecon has no major role in the engineering department of Australia. It lacks in providing any type of assurance over the environmental services and lacks proper engineering services as well. The case study also highlights some of the major competitors of the company. These include Bureau Veritas Australia Pty Ltd, KPMG and so on. The report sheds light on the challenges that Aurecon has to face while contemplating a move in Asia. The country in focus for the report is Singapore, one of the most technically advanced countries in the Asian continent.

Political- In the words of Song, Sun and Jin (2017), Singapore has a peaceful political environment that does not commit any type of interference with the business side of the country. This can be considered as an opportunity for Aurecon as the company can cash-in on the political freedom of the country.

Economic- The country proves to be a good financer for organisations. Every organisation that establishes a base in Singapore gains good support from the stakeholders due to its reach economic return. This is another opportunity for Aurecon as such economic growth rate is not available in other countries (Aurecongroup.com 2018).

Socio-cultural- Chatzoglou et al. (2017) stated that the socio-cultural factor in the country provides evidence that Singapore is filled with talented individuals. The individuals possess a good understanding of engineering and can contribute heavily to the growth of the organisation.

Technological- The case study suggests that technology is one of the biggest threats that Aurecon faces. In the modern world, technology plays a key role in the success of a company. The need for manual labour is on the decline in the industry.

Environmental- Singapore has one of the best environments in the world. Most of the Government and legal rules apply for the sustainability of the environment of the country. Thus, this is another threat for Aurecon.

Challenges and opportunities for Aurecon in Singapore

Legal- It has been seen that Aurecon may face challenges while trying to deal with the environment. Sustainability and conservation of the environment is a big factor for the company. Besides this, it is important that the legal laws of the country be abided by so that the company can grow in the market. Hence, it is important that sustainability is maintained in the environment of Singapore.

After the analysis, it can be said that the external factors can be favourable for Aurecon. This is mainly because the company can gain rich opportunities for the stability and growth that the economy of the country can provide. For future, it is important to focus on technology for further growth (Aurecongroup.com 2018). Hence, it is necessary to have a team of technical experts that can help the organisation to grow. In this regard, two important elements can be understood that affect the external factor. This includes the technical factor as well as the environmental factor.

Threat of new entrants- The threat of new entrants can be considered as the medium in the Singaporean markets. This is mainly because of the fact that the country and its Government openly negotiate with business entities. Hence, industries belonging to the construction companies can have a tough time in opening their business in Singapore (Kirzner 2015). However, it needs to be kept in mind that the key element behind the threat is the technical expertise among the organisations.

Threat of substitutes- The threat of substitutes is low in the markets of Singapore as it is rare for individuals to start a similar business. According to Lim (2018), the threat of substitutes normally includes replacing one product with another. In the case of Aurecon, such a thing is not possible, as the company does not have any specific product. The fact that the Government finances the company and due to its strong rate of return makes it possible for Aurecon to mitigate this threat.

Bargaining power of buyer- In the case of Aurecon, the buyer includes the customers as well as the Government. Aurecon requires legal permission from the Government so that it can continue with its work. Hence, this can be a high threat and it is necessary for Aurecon to take mitigation measures to protect the sustainability of the land. In this regard, the key elements include the prices and the requirements for developing their project.

Bargaining power of suppliers- This is another low threat as despite being a private sector, some of the finances for the company come from the Government. In this case, the bargaining options of the sellers become low. According to Baker and Sinkula (2015), most sellers find it difficult to enter a bargain with the company due to its reputation in the market.

Factors affecting Aurecon – Political, Socio-cultural, Economic, Technological, Legal, and Environmental

Degree of rivalry- As stated earlier, the rivals of Aurecon include Bureau Veritas Australia Pty Ltd, KPMG, SGS Australia Holdings Pvt Limited and so on. These companies pose a high threat as they are leading in services that include environmental science service and consulting service.

After analysing the five-forces, it can be concluded that Aurecon can benefit by setting up business in Singapore. The opportunities that are provided to the company due to a rich economic factor of the country can be used to enter the market. This, however, requires a great deal of revenue, and thus Aurecon can use the assistance of the Government to establish a strong business in Singapore.

Industry life cycle measures the possible longevity of a product or company. As stated by Yan-hong (2015), the evolution of a product or company in the industry can be measured by analysing the four stages that make up the product life cycle. The stages include introduction, growth, maturity and decline. Similarly, Aurecon can undergo a similar transition that highlights the success and the need to improve in the Singaporean market.

Introduction- During its initial stages, Aurecon may witness some form of positive response from the customers. This is mainly because of the fact that the company is new in the market and new expertise can help the company to grow in a steady manner.

Growth- This is the stage in which, Aurecon can develop its success in the market. The growth that the company witnesses can be measured based on the response that the customers provide. However, the response of the customers needs to be based on the quality of services and the environment laws of the country.

Maturity- Maturity is the third stage in which a company makes attempt to stabilise its growth (Dibrell, Fairclough and Davis 2015). The stabilisation of growth can be done by innovating as well being creative. New ideas can be formed about the ways to perform the service even better. For Aurecon, the focus needs to be on building sustainability as well as technical expertise.

Decline- It is the final stage in which customers tend to lose their interest in a particular product or company. This stage occurs due to the monotonous nature of the business and by the introduction of new products in the market. To mitigate this stage, companies need to plan innovative techniques.

Price- The most important element in the marketing ix that can satisfy customers is the price of a product (Navarro-García, Arenas-Gaitán and Rondán-Cataluña 2014). The tendency of each customer is to have the best quality of product at a pocket-friendly price. Aurecon needs to maintain its prices so that it can satisfy the customers by providing the best quality.

Evaluation of the five forces for Aurecon

Quality- It has been as a universal fact that price and quality are the two factors that complement one another.  The quality of service provided by a company needs to be perfect for customers to be loyal to a product or company. Aurecon needs to maintain the best quality by analysing the demands and needs of the customers (Aurecongroup.com 2018).

Dependability- This measures the loyalty of the customers. The dependability factor is directly proportional to the product lifecycle stage. This is because customers tend to be depending on a company for the best quality of products. The introduction of a better product or the fall in quality of the product may hamper the trust of the customers.

Flexibility- This includes the openness of a company to innovate products. The flexibility of a company depends upon the resources and capabilities it possesses that are required for gaining success in the market (Kuratko, Hornsby and Covin 2014). 

Speed- Speed includes the quickness with which products and services are delivered to customers. In the case of Aurecon, the construction of their buildings needs to be assessment time for the company.

The analysis of the needs of the customers portrays the result that Aurecon requires maintaining reasonable prices for the satisfaction of the customers. The analysis of the company shows that Aurecon intends to put high prices on its services. The segmentation that the company does of the customers provides for a positive approach for the organisation. Flexibility can help the company to meet the requirements of the people.

Having analysed the services provided by Aurecon, a spider web diagram can be formed that highlights the factors that satisfy the needs of the customers. The spider web diagram can help to analyse the ways by which Aurecon can satisfy its customers. The factors are similar to the needs of the customers.

Price: It has been seen that the prices of Aurecon is not expensive and the products and services of the company are reasonable. The price factor is not a threat in Singapore as the country consists of a rich economy. This helps organisations to pose a price that can be suited for the need of the customers.

Quality: Aurecon provides high-quality service and it is important that such service is maintained to continue its efficiency in the market. Aurecon also needs to maintain the sustainability of the services it provides so that it does not violate any legal laws that govern the country (Aurecongroup.com 2018).

Measure of product life cycle of Aurecon

Dependability: Customers tend to be loyal based on the proper quality of service along with reasonable prices. This proves to be an easier factor for companies as a competitive advantage can be gained by setting the correct price of products. Aurecon can use its price and quality factor to gain dominance in the market of Singapore (Armstong et al. 2015).

Flexibility: The services provided by a company commands its flexible nature. The flexibility and services need to be aligned together for the satisfaction of the customers.

Speed: This includes analysing the resources and the quickness with which, Aurecon can complete its work. However, it needs to keep in mind the quality of the work.

According to Eisingerich et al. (2016), the resources, as well as the capabilities of a company, determine the expertise it possesses. Expertise usually denotes the inner strength of a company and the manner in which this strength can be applied to gain a competitive advantage. The external factors show that Aurecon may set up a profitable business in Singapore based on the skills that the country possesses. The company can use the skills and talents of the people to address certain issues that hamper the progress of Aurecon in the Singaporean market. One such issue includes the technical expertise.

Aurecon needs to maintain its technical expertise if it is to gain success in the markets of Singapore. The case study suggests that Aurecon need this as technology is one of the factors that is helping the engineering industry to gain. The use of machines instead of human beings is being the trend of the modern world. This is mainly because the labour cost can reduce, and Aurecon can invest in upgrading the technologies and hire experts solely for the purpose of technology.

According to Pinto (2015), variations of the products of a company provide the strategic capabilities that it possesses. Certain factors are involved that indulge in the variations of the products and services. These variations ensure that a company does not have to deal with any disadvantages that exist that in the market. Companies need to remain focused on the resources and capabilities that it possesses. The focus on these factors helps in determining the strategic capability that a company may have. For Aurecon, it is essential that the company analyse the resources that it possess. It is already established that the company lacks expertise in the technical department. Aurecon consist of numerous resources that may help the company to establish itself in the international market.  

Factors for satisfying customer needs – Price, Quality, Dependability, Flexibility, and Speed

In this regard, it can be said that the target customers provide the capabilities of a company (Blut et al. 2015). The response of the customers and the expectations of the customers determine the capabilities of a company. In the case of Aurecon, it has been seen that managing the construction site is different in the case of Aurecon. One strategic move that the company makes is the fact that it conducts a proper analysis of the market before investing in it. It is important that the company ensure that its competitors do not replicate the resources of the company. Value needs to be provided to the customers so that they remain loyal to the company.

Resource or capability	Valuable	Rare	Imitable	Organised to exploit	Impact on competitive advantage
Global market existence	Yes	Yes	Yes	Yes	Competitive parity
Skilled and talented employees	Yes	No	No	Yes	Competitive advantage
Technical expertise	No	No	Yes	No	Temporary Competitive disadvantage
Protecting the environment by maintaining stability	No	Yes	No	No	Temporary Competitive disadvantage

Table 1: VIRO analysis

(Source: Created by author)

The analysis provides evidence that Aurecon enjoys a competitive parity in the market. This signifies that the competitors can replicate the products of the company in an easier manner. The main concern of the company is the lack of technical expertise. Apart from this, it also needs to maintain the sustainability of the environment in which it works. Thus, these two factors constitute the weakness of the company.

Sustainability is one of the most important factors that are required for a steady growth in the business environment (Knott 2015). Aurecon has to ensure that it maintains the sustainability of the environment as the legal rule of the country demands that organisations remain cautious in the way approaching a business. The VIRO analysis provides some positivity for Aurecon, which includes the existence of skilful employees. This can help the company in progressing in the market.

Strength · Increased profitability · Increased  revenue · Acts as barriers to new markets	Weakness · Lacks future growth in market · Lack of brand awareness · Technical expertise
Opportunity · New venture · Capital investment · Economic growth	Threat · Risks · Price · Technological problem

Table 2: SWOT analysis

(Source: Created by author)

The SWOT analysis shows that Aurecon makes good profits from its construction sites. This is a huge advantage for the company as more revenue can help it to maintain exploit other areas of its industry. More profit also leads to increased revenue for the company. These can be used to address the weakness that the company have. One of the major weaknesses that have been seen in the SWOT analysis is the lack of brand image. Not many people are aware of the existence of the brand. This can hamper the growth of the organisation, as without reputation it can be difficult for Aurecon to establish a steady business in a foreign country. However, certain opportunities have been identified that can help the company to gain some advantages.

The opportunities that have been arrived include the possibility of a new venture. The fact that the company can get the opportunity to invest in the international market provides the most important opportunity for the company. The investment of capital is also an important factor. Due to the increased income and ability to gain profit, Aurecon has the ability to invest heavy capital. Apart from this economic growth also plays an important role in the progress of the company. Despite this, there is a certain threat that may hamper the growth of the company. One such threat can be related to the weakness of the company. This includes the technical expertise. In the modern world, lack of technology poses a major threat to business. The prices of the services along pose risks that can be attributed to the threats from the economic factor of the environment.

After analysing the capabilities of the company, it has been seen that Aurecon faces challenge due to its technical problem. This is a long-term challenge for the company as in the modern days; technology plays an important role for the success of a business. The risk factor such as the risks of the health and safety of the employees can be considered as a short-term challenge as these risks can be mitigated by maintaining proper protocols in the organisation.

The confrontation matrix is an extended version of the SWOT analysis. According to Grünig and Kühn (2015), the confrontation matrix takes into account every possible combination of the four internal factors. It is used to identify the strategy that can be effectively used by an organisation.

		Opportunity	Threat
		O1	O2	O3	T1	T2	T3
Strength	S1	3	8	9	6	1	3
S2		7		2	4	6
S3	8		9		3
Weakness	W1		1	2	9		5
W2	7	6	3	9	6
W3		3		2		9

Table 3: Confrontation matrix

(Source: Created by author)

Conclusion

As a conclusion, it can be said that companies need to grow in a market by analysing the external as well as the internal factors. The resources and capabilities of Aurecon provide opportunities for the company to overcome any obstacles that exist in the market. However, the technical drawback can hamper the progress of the company in a big way. The support from the employees is great and it is important that the company remain focused on the capabilities it possesses. In a country like Singapore, Aurecon can be exposed to the richness and the growth that exists in the economy. The analysis of the VRIO framework suggests that competitive parity is the main factor that the company settles in. However, it is required that Aurecon exploit the threats and weakness and convert them into strengths and opportunities for the betterment of the organisation.

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