Executive Summary
The intent of this study is to specify a concern program for a possible strategic confederation between my company “ MCS Construction ‘s ” and its supply concatenation ( Consultants, Major Preferred Suppliers and Major Preferred Subcontractors ) both up & A ; down to line within the building and technology industry.
The traditional relationship between the client, advisers, chief contractor, subcontractors and providers within the building industry utilizing a traditional contract is in most instances but non all really contractual and adversarial one “ Blasted Culture ” which is non productive in a concern as it about relationships, where the client and advisers puts all of the hazard on to the chief contractor who in bend base on ballss it down the line to their provider concatenation i.e. Suppliers & A ; Subcontractors, due to the nature of the building industry i.e. big and complex undertakings that need to be completed to unrealistic clip frames, budget, quality, safety outlooks, this is the direct antonym and goes against the grain of Strategic Alliances.
There are many definition of a strategic confederation but none are universally accepted, I have listed a several definitions of an confederations below: –
“ A Strategic Alliance is a concerted scheme in which houses combine some of their resources and capablenesss to make a competitory advantage ” ( Hitt, 2009 p. 255 ) ;
“ Concerted understandings between two or more houses ” ( Hill, 2009 p. 506 & A ; 714 ) ;
Gomes-Casseres 2003 p.12 & A ; 13 combines elements of point 1 & A ; 2 above “ Alliances are understandings between two or more separate houses that involve ongoing resource parts from each to make joint value, are “ uncomplete contracts ” where the footings of the understanding can non be wholly specified and agreed at the beginning and joint determination doing to pull off the concern and portion value ”
We will be following the features of point 3 above in our concern program.
Alliances ( big and little ) have been around in one signifier or another since the early 1990 ‘s, they are used in all different industries across the universe and the building and technology industry is no exclusion some noteworthy undertakings that have been completed around the universe utilizing confederations are: –
Burj Khalifa, Dubai UAE, the universe ‘s tallest edifice was built by a Joint Venture ( type of strategic confederation ) by Samsung Engineering & A ; Construction ( South Korea ) , Besix ( Belgium ) and Arabtec from UAE ;
The Dubai Mall, Dubai, UAE, the universe ‘s largest retail development was built by a Joint Venture Partnership ( type of strategic confederation ) by Dutco Balfour Beatty ( the writer used to work for this company ) – Al Ghandi and Consolidated Contractors International Company ( DBB/AG and CCC ) ; and
Gateway Bridge Duplication & A ; Upgrade Project, Brisbane, Australia, was built by Leighton Contractors Abigroup Joint Venture at a cost of AUS $ 1.88b it consisted of the duplicate of Gateway Bridge and 20km upgrading of Gateway Motorway, including the Gateway Deviation.
Harmonizing to Gomes-Caseres between 30 to 60 % of confederations do non win and neglect for several grounds listed below, which this concern program will try to avoid: –
Ill-defined Aims ;
Lack of a elaborate concern program ;
Decision Gridlock ;
Aligning with a weak or competitory spouse ;
Unmanaged civilization clang ;
Failure to larn or protect nucleus capablenesss ; and
Failure to program for confederation development.
This concern program has be developed utilizing the rules of taking confederations faculty members, experts & A ; practicians in their field in peculiar Gomes-Casseres work to develop best patterns that work, while recognizing that each confederation is alone and there is no 1 size fits all attack.
This papers is a work in advancement and we would be working with the possible spouses after the concern confederation scheme has been established by MCS Constructions, to jointly develop the confederation operating program, this will build a solid foundation for a reciprocally good relationship.
Table of Contentss
Topic page 1
Title page page 3
Background
The subject of this study is “ Specifying a Business Plan for a Potential Strategic Alliance ” , there are many possible readings of this subject as strategic confederations have been in being since the early 90 ‘s, are used in across a assortment of different industries, companies both big and little, on a domestic and international degree which can run from really simple to the composite.
Pulling upon my ain life/work experiences, cognition, accomplishments and makings in the building and technology industry both local and international over the last 10 old ages plus ( refer CV in Appendix? ) , and sing I do non hold entree to relevant information on an bing confederation, I will be looking at the feasibleness of developing a possible strategic confederation and specifying a concern program which will include but non limited to the following countries as outlined in the elected assignment specification ( mention appendix? ) : –
2 ) Specifying a Business Plan for a Potential Strategic Alliance
Background: the organisations, the principle for partnering and awaited benefits
Design of the confederation: range, ends and direction procedure
Rollout program, timeline and awaited development of the confederation
Anticipated challenges and extenuation program
Exit scheme
Statement of the job ( s )
The job is to Specifying a Business Plan for a Potential Strategic Alliance.
Boundary lines
The undermentioned restrictions on this study are listed below: –
Due to limited word count non transcending 2,500 words ( excepting appendices, subject, cover sheet, mention list etc. ) and the deepness and comprehensiveness of the subject on strategic confederations we were unable to cover the full range that this encompasses so hold taken an overall position and looked at the countries as outlined in the elected assignment specification ;
We have non selected a specific company for our company MCS Constructions to spouse with, within the building and technology industry we have looked at it from a wide position i.e. Industry Supply Chain up 7 down the line ( Consultants, Major Preferred Suppliers and Major Preferred Subcontractors ) ;
Merely secondary informations will be used in the study which will include but non limited to Websites, Industry Associations, Books, Journal Articles, New Paper Articles, etc. refer to the mention lists ;
Definitions
For the intents of this study we will utilize the undermentioned definition of a Strategic Alliance: –
Gomes-Casseres 2003 p.12 & A ; 13 “ Alliances are understandings between two or more separate houses that involve ongoing resource parts from each to make joint value, are “ uncomplete contracts ” where the footings of the understanding can non be wholly specified and agreed at the beginning and joint determination doing to pull off the concern and portion value ” ;
“ A Joint Venture is a strategic confederation in which two or more houses create a lawfully independent company to portion some of their resources and capablenesss to develop a competitory advantage ” Hitt, 2009 p. 256 ;
“ An equity strategic confederation is an confederation in which two or more houses ain different per centums of the company they have formed by uniting some of their resources and capablenesss to make a competitory advantage ” Hitt, 2009 p. 256 ;
“ A non-equity strategic confederation is an confederation in which two or more houses develop a contractual relationship to portion some of their alone resources and capablenesss to make a competitory advantage ” Hitt, 2009 p. 256 ;
Choice of theoretical account and method of analysis
“ Delete? ”
Treatment of the job ( analysis )
“ Delete? ”
Introduction
We will be specifying a concern program for a possible strategic confederation within the building & A ; technology industry with our supply concatenation both up & A ; down the line ( Consultants, Major Preferred Suppliers and Major Preferred Subcontractors ) , in order to run into our strategic aims, we will be following the 6 stairss listed below every bit recommended by ASAP / Dr. Louis Rinfret: –
Alliance Specific Strategy ;
Analysis & A ; Selection ;
Value-Creating Negotiations ;
Operational Planning ;
Alliances Structuring ; and
Manage, Innovate & A ; Transform.
Throughout the confederation lifecycle and the assorted phases listed above the rating.
Background: the organisations, the principle for partnering and awaited benefits
Administrations
MCS Construction
MCS Constructions is a freshly formed company presently located in Brisbane, Australia which specialises in the building and technology industry in the country of commercial building i.e. new physique, fit-out, renovation and heritage listed work.
The company provides a assortment of services including but non limited to: –
Tendering & A ; Bidding, Estimating, Quantity Surveying, Cost Control, Contract Administration / Contract Management ;
Design, Programme, Site, Project and Construction Management ;
Subcontractor & A ; Supplier Management ;
Traditional Hard $ , Design & A ; Build, Management Contractor, Construction Management, Cost Plus, PPC2000/FIDIC/JCT/PFI & A ; PPP, EPC types of contracts ;
Construction of commercial building undertakings i.e. new physique, fit-out, renovation and heritage listed work.
This is drawn on the extended life/work experiences, cognition, accomplishments and makings gained by the owner/director Mr. Matthew C. Smith in the building and technology industry both local and international over the last 10 old ages plus ( refer CV in Appendix? ) , which is apparent in the concern today.
We are researching the feasibleness of puting up a Strategic Alliance with other sure companies within the industry, to supply its clients ( Public & A ; Private ) with single-source of duty, a one-stop store to finish its undertakings of assorted sizes and complexness on clip, to budget, quality and safety that exceeds the client ‘s outlooks and aims.
In order to make this a strategic confederation would supply a vehicle with capital/finance, extra cognition, accomplishments, experiences, expertness from the possible spouse companies ( Advisers, Major Preferred Suppliers and Major Preferred Subcontractors ) both local & A ; international, resources, connexions, capablenesss and competences, where the clients undertakings require a wide scope of expertness, some of which we may non hold in-house.
We would be looking at developing this confederation capableness to come in the abroad and distant undertakings in developing and 3rd universe states in peculiar Middle East / Africa / Asia etc. We would besides welcome confederations closer to place ( Australia ) when needed and depending on our client ‘s demands.
We would be looking at undertaking undertakings for both the private and public sector, for illustration the United Nations, World Bank, IMF, etc.
MCS Construction ‘s Mission
Is to supply its clients ( Public & A ; Private ) with a single-source of duty, a one-stop store to finish its undertakings of assorted sizes and complexness on clip, to budget, quality and safety that exceeds the client ‘s outlooks and aims in an economic, efficient, ethical, environmental sustainable manner.
MCS Construction ‘s Valuess
Client Satisfaction ;
Trustworthiness ;
Loyalty ;
Integrity ;
Actively work outing jobs ;
Co-operation and Collaboration ;
Relationships ; and
Win-Win Outcomes.
MCS Construction ‘s Aims
Our concern aims are: –
Sustainable Growth ;
Safety ;
Quality ; and
Continuous Improvement.
MCS Construction ‘s Core Competences
Our nucleus competences within our country of expertness is
Technological Know-How ; and
Management Know-How.
Potential Partner Administrations
At this phase of the concern program we have non identified any peculiar companies as possible spouse administrations but MCS Constructions would be looking to set about a strategic confederation that consists of both local and international houses ( big or little ) within the building and technology industry supply concatenation both up and down the line.
The strategic confederation may be between two or more houses depending on the undertaking demands, this will be assessed on a undertaking by project footing, we would imagine the possible spouses to be from the undermentioned sections of the industry: –
Consultancies ( Various ) Single or Multi-Disciplined ;
Architectural Design
Interior & A ; Exterior Design
Landscape Design
Civil / Structural / Mechanical, Electrical, Plumbing ( MEP )
Measure Surveying / Costing / Project & A ; Program Management Advisers
Preferred Major Suppliers ; and
Preferred Major Subcontractors i.e. MEP.
One of the keys to doing a strategic confederation work is the appraisal and choice of the spouse ( s ) , harmonizing to ( Hill 2009, p. 508-509 ) there are three features that we should be looking for in a possible spouse: –
Helps the house to accomplish its strategic ends ;
Shares the vision for the intent of the confederations ; and
Unlikely to seek to opportunistically work the confederation for its ain terminals.
In order to accomplish this we will carry on comprehensive research into the companies by set abouting due diligence but besides swearing and verifying the information the a spouse provides to us, we will look at the fluxing information ; –
Collect as much pertinent and relevant, publically available information as possible ;
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The principle for partnering and the awaited benefits
The principle for MCS Constructions to spouse with the supply concatenation ( as outlined above ) both up and down the line ( frontward and backward integrating ) for it to present the confederations clients within the building and technology industry, undertakings that are on clip, to budget, quality and safety and exceeds the clients outlooks and aims.
We offer our possible spouses our core competence of Technological Know-How and Management Know-How within our chosen country of cognition, accomplishments, experiences and expertness in commercial building i.e. new physique, fit-out, renovation and heritage listed work. We would be looking for a possible spouse with which would complement us and supply capital/financing, extra resources, capablenesss, competencies, accomplishments, experiences, cognition, connexions, expertness etc.
The awaited benefits would be that MCS Constructions would be able to turn and spread out its concern overseas into new markets with the extra capital/financing, resources, capablenesss, accomplishments, experiences and expertness in their chosen country i.e. Consultancy, Major Preferred Suppliers and Major Preferred Subcontractors, to portion risk/reward ( Gain/Pain Share ) and am chance to larn.
Our Key Drivers
Hazard ;
Economies of graduated table ;
Economies of range ;
Market Segment Access ;
Technology Access ;
Geographic Access ;
Funding Constraints ;
Management Skill ;
Acquisition Barriers ;
Sharing cognition ;
Expertness ;
Expenses ;
Gain entry to new markets ; and
Derive a competitory advantage in one.
Design of the confederation: range, ends and direction procedure
Now we have made the determination to come in a strategic confederation, we have many picks to be made that relate to the design of the confederation, range, ends, direction procedures including legal, revenue enhancement, insurances, funding, construction etc. This will be outlined in a formal confederation understanding ( mention to appendix? for a sample transcript ) .
In relation to legal, revenue enhancement and insurances, public presentation bonds/guarantees, net income etc. ( for the intents of this study is outside its range ) this will depend on the local legal power that the strategic confederation is under i.e. State that the confederation is runing in for illustration Dubai, UAE it is a demand that international companies setup a joint venture to spouse with a local company “ patron ” where 51 % will been owned by the local company and 49 % by the international company.
The writer used to work for Dutco Balfour Beatty LLC in Dubai, UAE which was 51 % owned by the local company Dutco and 49 % owned by Balfour Beatty the international company. On a separate note the writer used to work for Balfour Beatty in the UK.
There are three major signifiers of strategic confederations Joint Venture, Equity Strategic Alliance and Non-Equity Strategic Alliances, the concluding determination on the signifier will be negotiated between all parties to their common benefit, but it is envisaged that we will utilize a Non-Equity Strategic Alliance ( refer to definitions subdivision ) which over clip may develop into a Joint Venture.
Scope
The range of the confederation between MCS Construction and the confederation spouses i.e. Advisers, Preferred Major Suppliers and Preferred Major Subcontractors, will be every bit shared between the parties who will supply there direction & A ; technological know-how in their chosen subject, this will include but non limited to the following listed below: –
Share Resources ;
Share Knowledge ;
Finance / Capital ;
Gain / Pain portion ;
Risk & A ; Cost ;
Add Value to the Alliance Partners and client ;
The range will be broken into two phases: –
Phase 1: – Use the confederation spouses specialty in their chosen country, we will apportion undertakings and duties to each spouse on the footing of what they do best, we will tender and offer for buildings and technology undertakings in assorted mark markets/segments, tendering and command for undertakings requires capital, resources, clip, etc. , if we are non successful at winning work we will go on to look for other chances, if we are successful at winning work so we will travel into Stage 2 ;
Phase 2: – Once we have successfully won and been awarded the project/contract from the client we will come in the Undertaking Stage where we will use the confederation spouses specialty in their chosen country, we will apportion undertakings and duties to each spouse on the footing of what they do best, the undertaking phase will depending on the type, size, complexness of the undertaking be broken down into assorted phases which will typically following a traditional matrix: –
Contract Award ;
Pre-construction Phase ( On-site and/or Off-Site ) can include ;
Design ;
Enabling & A ; Temporary Works ; and
Mobilization, Site Setup and Establishment.
Construction Phase ( Engineering, Procurement, Construction, Management ) can include: –
Assorted works/elements depending on the particular undertaking demands.
Post Construction Phase
Handover to Client ;
Operational & A ; Maintenances Manuals ;
Training ;
Concluding Accounting with clients and members of the confederations ;
Evaluation & A ; Feedback.
Phase 3: – While we are transporting out Stage 2 we will be at the same time undertaking Stage 1 Tendering & A ; Bidding to procure future work book.
We will be continuously measuring, supervising & A ; feedback on all phases above looking for continual betterment.
Goals
In order for the confederation to be successful the stakeholders to the confederation must aline and equilibrate the ends and aims of MCS Constructions, the confederation, the confederations spouses and the confederation clients / undertaking, and lineation and agree from the start what these are and how this will be achieved.
Alliance Goals
Develop a long term reciprocally good relationship ;
Share Information
Share Knowledge and experience ;
Share Capabilities and Competencies ;
Share Resources ;
Share Connections ;
Win-Win Ethos ; and
Add Value to the confederation.
Management Procedures
Harmonizing to ( Gomes-Casseres 2003 p. 19 ) “ Between 30 per centum to 60 per centum of confederations do non win ” , so it is of import for the confederation spouses to understand and avoid the common confederations wickednesss which there are seven listed below: –
Ill-defined Aims ;
Lack of a elaborate concern program ;
Decision Gridlock ;
Aligning with a weak or competitory spouse ;
Unmanaged civilization clang ;
Failure to larn or protect nucleus capablenesss ; and
Failure to program for confederation development.
We would imagine the undermentioned direction construction that would be propose to utilize during the different phases: –
Alliances Specific Strategy and Alliances Analysis & A ; Selection this will be undertaken be the Senior Management of MCS Constructions championed by the proprietor / manager Mr. Matthew C. Smith but will including other internal resources HRM, Accounting / Finance / Legal and Operational Managers, every bit good as external advisers when required and needed such as Facilitator, Lawyer, Investment Bank, Strategic Alliance Management Consultants i.e. Vantage Partners to supply their expertness as this is the first strategic confederation for MCS Constructions.
Alliance Value-Creating Negotiations, Operational Planning and Structuring this will be continued by the proprietor / manager Mr. Matthew C. Smith and the senior direction of the preferable possible spouse once a MOUP has been enacted by all parties including a non-disclosure confidentiality understanding, this is to go on to construct the relational capital and trust between the parties traveling frontward. Harmonizing to ( Gomes-Casseres 2003 p. 120 64 % of hapless or damaged relationships between houses are the first cause of confederation failure.
Alliance Manage, Innovate & A ; Transform this will be broken into two phases
formal strategic confederation understanding which will be negotiated between all parties to our common benefit we will turn to the issue of an issue scheme which will cover the followi
Management processors i.e. Structure, Governance, Relational Capital are the key to accomplishing this and
Constructing trust with all of the stakeholders in the confederation from construct to completion.
Have a clear strategic intent – confederations are ne’er an terminal in
themselves, they provide tools to accomplish a concern scheme
2. Find a fitting spouse – a spouse with compatible ends and
complementary capablenesss
3. Specialize – allocate undertakings and duties in the confederations in a
manner that enables each party to make what they do best
4. Create inducements for cooperation – working together ne’er happens
automatically, peculiarly when spouses were once challengers
5. Minimize struggles between spouses – the range of the confederation and
of spouses ‘ functions should avoid opposing one against the other in the
market
Gomes-Casseres ( 2004 )
Share information – continual communicating develops trust and
supports joint undertakings on mark
7. Exchange forces – regardless of the signifier of the confederation,
personal contact and site visits are indispensable for keeping
communicating and trust
8. Operate with long time-horizons – common patience in work outing
short-term struggles is enhanced by the outlook of long-run
additions
9. Develop multiple joint undertakings – successful cooperation on one
undertaking can assist spouses endure the storm in less successful articulation
undertakings
10.Be flexible – confederations are open-ended and dynamic relationships
that demand to germinate in gait with their environment and in chase of
new chances
Gomes-Casseres ( 2004 )
Rollout program, timeline and awaited development of the confederation
There are a series of stairss and determinations that have to be addressed through the life rhythm of the strategic confederation to the common benefit of the confederation participants this are outlined below which are by and large accepted in the research: –
Alliance Specific Strategy ;
Analysis & A ; Selection ;
Value-Creating Negotiations ;
Operational Planning ;
Alliances Structuring ; and
Manage, Innovate & A ; Transform.
( Sourece: – ASAP / Dr. Lou
Anticipated challenges and extenuation program
While this papers, together with the Memorandum of Understanding and Principles ( MOUP ) / Letter of Intent and the Alliance Agreement
Intellectual Property
Opportunisms
Cultural Differences ( Organisational and National Cultural )
Mistakes, skips, inefficiencies, holds, coordination jobs, cost overproductions, productiveness losingss
Timelines
Exit scheme
Prior to us come ining into a strategic confederation with a possible spouse ( s ) and as portion of the formal strategic confederation understanding which will be negotiated between all parties to our common benefit we will turn to the issue of an issue scheme which will cover the undermentioned issues listed below but non limited to them, they may be planned or unplanned but it is of import to turn to them otherwise it could ensue in complications for the confederation participants: –
Death ;
Divorce ;
Incapacitated ;
Insolvency & A ; Bankruptcy Disability ;
Desire to go forth ;
Buyout ;
Dissolution of Company ;
Assignment comes to an terminal ;
No market for confederation ;
Fiscal ends non met ;
Mission fulfilled ;
Goodwill to participants ;
Momentum no longer in drama ;
Date & A ; Time i.e. 12 months or in this instance the life of the building undertaking ;
Dollar Amount i.e. Turnover / Revenue / Profit / Costs / Budget.
It is of import to stop the strategic confederation in a reciprocally good manner, seek to maintain the relational capital we have built up during life rhythm of the confederation and to avoid an adversarial “ lose-lose ” declaration as the cost can be considerable in footings of economic, reputational, socio-psychological.
The confederation understanding will besides clearly outline the Redistribution of Assets / Capital / Staff / Profit etc.
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