Vision And Mission Of Skanska Commerce Essay

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These three horizons framework suggests that every organisation should think of itself as comprising three types of business or activity, defined by their 'horizons' in term of years. Horizon 1 businesses are basically the current core activities. Horizon 2 businesses are emerging activities that should provide new sources of profit. Finally, there are horizon 3 possibilities, for which nothing is sure (Johnson, Whittington, & Schholes, 2011, p. 4) .

Strategic direction

Over the years, strategies follow some kind of long-term direction or trajectory. Sometimes a strategic direction only emerges as a coherent pattern over time. Typically, however, mangers and entrepreneurs try to set the direction of their strategy according to long-term objectives. In private-sector businesses, the objective guiding strategic direction is usually maximising profits for shareholders. However, profits do not always set strategic direction. First, public-sector and charity organisations may set their strategic direction according to other objectives. Second, even in the private sector profit is not always the sole criterion for strategy. Thus controlling families may sometimes sacrifice the maximisation of profits for family objectives, for example passing down the management of the business to the next generation. The objectives behind strategic direction always need close scrutiny (Johnson, Whittington, & Schholes, 2011, p. 6).

Organisation

Organisations are not treated as discrete, unfilled entities. Organisations involve complex relationship, both internally and externally. This is because organisations typically have many internal and external stakeholders, in other words people and groups that depend on the organisation and upon which the organisation itself depends. Internally organisations are filled with people, typically with diverse, competing and more or less reasonable views of what should be done. In strategy, therefore, it is always important to look inside organisations and to consider the people involved and their different interests and views. Externally, organisations are surrounded by important relationships. For example with suppliers, customers, alliance partners, regulators and shareholders (Johnson, Whittington, & Schholes, 2011, p. 7) .

Levels of strategy

Inside a organisation strategies are at main three levels. They are corporate level strategy, business level strategy and operational strategy.

Corporate - level strategy

"Corporate- level strategy is concerned with the overall scope of an organisation and how value is added to the constituent businesses of the organisational whole. Corporate-level strategy issues include geographical scope, diversity of products or services, acquisitions of new business, and how resources are allocated between the different elements of the organisation. Being clear about corporate-level strategy is important to determining the range of businesses to include is the basis of other strategic decisions". (Johnson, Whittington, & Schholes, 2011, p. 7)

Business -level strategy

Business-level strategy is about how the individual businesses should compete in their particular markets (for this reason, business-level strategy is often called 'competitive strategy'). These individual businesses might be stand-alone businesses, for instance entrepreneurial start-up, or 'business units' within a larger corporation. Business-level strategy typically concerns issues such as innovation, appropriate scale and response to competitors' moves. In the public sector, the equivalent of business-level is decisions about how units should provide best-value services. Where the businesses are units within a larger organisation, business-level strategies should clearly fit with corporate-level strategy

(Johnson, Whittington, & Schholes, 2011, p. 7) .

Operational strategies

Operational strategies are concerned with how the components of an organisation deliver effectively the corporate- and business-level strategies in term of resources, processes and people. In most business successful business strategies depend to a large extent on decisions that are taken, or activities that occur, at the operational level. Operational decisions need therefore to be closely linked to business-level strategy. They are vital to successful strategy implementation (Johnson, Whittington, & Schholes, 2011, p. 7) .

Strategy in different contexts

Small business

Small businesses will certainly need to attend closely to the environment, because they are so vulnerable to change. But, especially in small entrepreneurial and family businesses, the most important positioning issue will often be strategic purpose, this will not necessarily just be profit, but might include objectives such as independence, family control, handing over to the next generation and maybe even a pleasant lifestyle. The range of strategic choices is likely to be narrower; it is rare for a small business to make an acquisition itself, though small businesses may have to decide whether to allow them to be acquired by another business. Some issues of strategy-in-action will be different, for example strategic change processes will not involve exactly the same challenges as for large, complex organisations

(Johnson, Whittington, & Schholes, 2011, p. 20) .

Multinational corporations

Multinational corporations in this context, positioning in a complex global marketplace will be very important. Each significant geographical market may call for a separate analysis of the business environment. Operating in many different countries will raise positioning issues of culture variations in national culture imply different demands in the marketplace and different managerial styles. Strategic choices are likely to be dominated by international strategy questions about which geographies to serve. The scale and geographical reach of most multinationals point have significant issues for strategy-in-action, organisational structure and strategic change (Johnson, Whittington, & Schholes, 2011, p. 20) .

Public sector and not-for-profits businesses

Positioning issues of competitive advantage will be important even in these contexts. Charitable not-for-profits typically compete for funds from donors, public-sector organisations, such as schools and hospitals, often compete on measures such as quality or service. The positioning issue of purpose is likely to be very important too. In the absence of a clear, focused objective such as profit, purpose in the public sector and not-for-profits can be ambiguous and contentious. Strategic choice issues may be narrower than in the private sector for example, there may be constraints on diversification. Strategy-in-action issues often need close attention, leadership and strategic change typically being very challenging in large public-sector organisations (Johnson, Whittington, & Schholes, 2011, p. 20) .

Strategic position

"The strategic position is concerned with the impact on strategy of the external environment, the organisation's strategic capability (resources and competences), the organisation's goals and the organisation's culture". (Johnson, Whittington, & Schholes, 2011, p. 16)

Environment

"Organisations operate in a complex political, economic, social and technological world. These environments vary widely in terms of their dynamism and attractiveness". (Johnson, Whittington, & Schholes, 2011, p. 16)

Strategic capability

"Each organisation has its own strategic capabilities, made up of its resources and competences". (Johnson, Whittington, & Schholes, 2011, p. 16)

Resources - machines and buildings.

Competences - techniques and management.

Strategic purpose

"Although sometimes unclear or contested, most organisations claim for themselves a particular purpose, as encapsulated in their vision, mission and objectives. The strategic purpose is a key criterion against which strategies must be evaluated". (Johnson, Whittington, & Schholes, 2011, p. 16)

Culture

"Organisational cultures can also influence strategy. So can the cultures of a particular industry or particular country. The impact of these influences can be strategic drift, a failure to create necessary change. This typically requires an understanding of the organisation's history". (Johnson, Whittington, & Schholes, 2011, p. 16)

History of SKANSKA

On year 1887 Aktiebolaget Skånska Cementgjuteriet has established SKANSKA based in Sweden. The SANSKA was established based on his past experiences in manufacturing concrete products. (SKANSKA)

At the beginning the company has grow very quickly. Then within the ten years the SKANSKA received its international orders and as well s played a main role in Sweden's construction industry. (SKANSKA)

In the mid year 1990's the SANSKA has well established as a commercial, property, residential unit apartments and family house developer. In year 1965 the company was listed on the Stockholm Stock Exchange. And late 1970's the SANSKA has entered to the United States market. On today United States is the SANSKA' largest business market is based on the United States. And also today's SANSKA is on the largest rank in the Unites States construction sector. (SKANSKA)

During the 1990s, SANSKA became its most expensive stage that ever became. They have doubled their sales within only few years. While the major portion of this growth was organic, a string of successful acquisitions also paved the way for Skanska's growth into a global company. Nowadays the SANSKA focuses on construction operations and development projects within the selected home markets in United States and Europe by Commercial, Residential and PPP-projects. (SKANSKA)

SANSKA's UK began was happened as part of Trafalgar House, owning companies like Trollope and Colls, established in the London construction market in late 1778's. In year 1996 Trafalgar House was sold to Kvaerner and then they have sold their construction business to SANSKA in 2000. Because of it SANSKA has borne on United Kingdom and started the works within the construction sector. (SKANSKA)

C:\Users\KASUN THARAKA\Desktop\SKANSKA_BLUE 534.png

SKANSKA's UK Practice

Within the United Kingdom SKANSKA has involved most prestigious projects in public and private sector. Whilst known mainly for large high-profile schemes, they also undertake many smaller projects including public realm improvements, hard and soft landscaping as well as hundreds of utilities projects each year covering gas, electricity and water. (SKANSKA)

By combining the skills and experience of construction operations and those of Infrastructure Development Business Unit, they have become a UK leader in Private Finance Initiative/Public Private Partnership schemes covering healthcare, education, defence, transportation and street lighting. (SKANSKA)

Their business model is to integrate core disciplines to deliver project solutions across chosen market areas. By integrating all disciplines and working together with their clients, their partners and their supply chain, make a real difference to the delivery of projects. And their focus is on creating sustainable solutions and they aim to be leaders in green construction, health and safety and business ethics. They work strictly in accordance with the SKANSKA Code of Conduct and to their Five Zeros, which reflect core values: Zero loss-making projects, Zero accidents, Zero environmental incidents, Zero ethical breaches and Zero defects. (SKANSKA)

They employ approximately 4,600 staff in the UK and undertake around £1.3 billion worth of work each year. They carry out all aspects of the construction, development and infrastructure process - from financing projects, through design and construction right through to facilities management, operation and maintenance. (SKANSKA)

SKANSKA's Strategy & Values

SKANSKA work strictly in accordance with the SKANSKA Code of Conduct and their Five Zeros, which reflect our core values. They are focusing about creating sustainable solutions and aim to be leaders in green construction, health and safety and business ethics. They also recognise that have a responsibility to the communities in work and take very seriously, working closely with those communities to keep them fully informed regarding the activities on their sites and employing local labour and trade contractors wherever possible. (SKANSKA, 2013)

SKANSKA's strategy for achieving its operational and financial targets

Focus on core businesses in construction and development.

Be an international company, with a leading position in selected home markets.

Take advantage of SKANSKA's worldwide collective resources - brand, employee expertise and financial strength.

Foresee and systematically manage risk.

Enhance green expertise throughout their operations.

Be an industry leader in green building and sustainability, in particularly in occupational health and safety, ethics and environment.

Recruit, develop and retain competent employees and to achieve a greater diversity.

Capitalise on urbanisation trends.

Five zeros.

(SKANSKA, 2013)

Five zeros

Zero loss-making projects.

Zero accidents.

Zero environmental incidents.

Zero ethical breaches.

Zero defects.

(SKANSKA, 2013)

Vision and Mission of SKANSKA

Vision - shall be a leader in its home markets - the customer's first choice - in construction and project development.

Mission - develop, build and maintain the physical environment for living, travelling and working.

(SKANSKA, 2013)

Some Projects Completed by SKANSKA

M25 Motorway, UK

London's M25 is one of the world's largest orbital motorways and Skanska is part of the consortium that's increasing its capacity in a 30-year operating concession and a £1 billion construction contract. As part of the Connect Plus consortium, Skanska is responsible for the design, construction, financing, operation and maintenance of 400km of motorway and trunk road. This includes the M25 network itself and large sections of the major motorways and trunk roads that cross it. They also have responsibility for the Dartford Crossing comprising two tunnels and a bridge across the River Thames including tolls and three further tunnels. (SKANSKA, 2013)

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Service: Public Private Partnerships, Construction.

Market segment: Roads.

Start date: 2009.

Completion date: 2012.

Clients: UK Highways Agency.

Country: United Kingdom.

City: London.

Concession period: 2009 - 2039.

Project status: Completed.

(SKANSKA, 2013)

Royal Derby Hospital, UK

The project involved the remodelling and redevelopment of the existing Derby City General Hospital site in Derby for the Southern Derbyshire Acute Hospitals NHS Trust. The new acute hospital combines services from both the existing Derby City General hospital and the Derbyshire Royal Infirmary to provide a modern energy efficient environment on one site with state-of-the-art equipment. In September 2012, Skanska sold its equity investments in the Royal Derby Hospital, the Central Nottinghamshire Hospital and the University Hospital, Coventry, to co-investor Inn is free for GB£66m, about SEK 715m. (SKANSKA, 2013)

Service: Construction, Public Private Partnerships.C:\Users\KASUN THARAKA\Desktop\ImageScaler.jpg

Market segment: Hospitals.

Start date: 2003.

Completion date: 2008.

Clients: Derby Hospital NHS Foundation Trust.

Country: United Kingdom.

City: Derby.

Contract value: 333.0 M GBP.

Concession period: 2003 - 2043.

Project status: Completed.

(SKANSKA, 2013)

30 St Mary Axe, London

30 St Mary Axe is one of London's latest landmarks. Standing 180m above the City of London, this iconic Foster & Partners-designed building is a very environmentally progressive skyscraper. The building programme saw seven of Skanska UK's Operating Units combine their skills to deliver this icon in under three years, on time and to budget, whilst working in one of the busiest areas of London. (SKANSKA, 2013)

Service: Construction.C:\Users\KASUN THARAKA\Desktop\ImageScaler (2).jpg

Market segment: Offices.

Start date: 2000.

Completion date: 2003.

Clients: Swiss Re Insurance.

Country: United Kingdom.

City: London.

Contract value: 131.0 M GBP.

Project status: Completed.

(SKANSKA, 2013)

PESTEL analysis of the macro-environment of SKANSKA

There are many factors in the macro-environment that will affect the decisions of the managers of any organisation. Tax changes, new laws, trade barriers, demographic change and government policy changes are all examples of macro change. (OXFORD UNIVERSITY PRESS, 2013)

Political factors - These refer to government policy such as the degree of intervention in the economy.

EU enlargement.

International trades.

Taxation policy - Increase of vat.

(OXFORD UNIVERSITY PRESS, 2013)

Economic factors - These include interest rates, taxation changes, economic growth, inflation and exchange rates.

Interest rates.

Exchange rates.

Income.

Inflation.

Market value.

(OXFORD UNIVERSITY PRESS, 2013)

Social factors - This include the changes in social trends can impact on the demand for a firm's products and the availability and willingness of individuals to work.

Aging the population.

Attitudes to work.

Income distribution.

(OXFORD UNIVERSITY PRESS, 2013)

Technological factors - New technologies create new products and new processes. Technology can reduce costs, improve quality and lead to innovation. These developments can benefit consumers as well as the organisations providing the products.

Building information modelling (BIM).

Innovation.

New product development.

Rate of technological obsolescence.

(OXFORD UNIVERSITY PRESS, 2013)

Environmental factors - Environmental factors include the weather and climate change. With major climate changes occurring due to global warming and with greater environmental awareness this external factor is becoming a significant issue for firms to consider.

Global warming.

Environmental issues.

(OXFORD UNIVERSITY PRESS, 2013)

Legal factors - These are related to the legal environment in which firms operate. In recent years in the UK there have been many significant legal changes that have affected firms' behaviour. The introduction of age discrimination and disability discrimination legislation, an increase in the minimum wage and greater requirements for firms to recycle are examples of relatively recent laws that affect an organisation's actions.

Competition law.

Health and safety law.

Employment law

(OXFORD UNIVERSITY PRESS, 2013)

SWOT Analysis for SKANSKA

This SWOT analysis has to use to identify the current position of Skanska in UK construction market and factors affecting the business, the abbreviation standing for strengths, weaknesses, opportunities, and threats associated with the business. (Research Methodology, 2013)

Strengths

Large amount of construction services.

Positive brand image contributed by 'green' initiatives.

Presence of some iconic projects (e.g. London's The Gherkin).

(Research Methodology, 2013)

Well-recognized global construction company.

Nontrivial datacentre experience.

The executive management of its mission-critical team provides a solid foundation for future growth and success.

(Schafer & Donoghue, 2013)

Weaknesses

Occasional cash flow issues.

High operational costs.

Overall higher costs of services.

(Research Methodology, 2013)

The company had significant wins in the datacentre sector, its industry recognition as a datacentre player is lacking. Its focus on tailoring each project to customer needs (or not having a base set of recognizable, off-the-shelf products) could work against it. (Schafer & Donoghue, 2013)

Opportunities

Development of separate division for lower-budget projects.

Entering the marketplace of emerging economies e.g. China and India.

Development of new niche markets.

(Research Methodology, 2013)

Offer the low costs that it claims (both up-front and long-term).

Delivery times in-line with competition.

Opportunity to capture a large portion of the yet-to-be-claimed prefabricated datacentre market.

(Schafer & Donoghue, 2013)

Threats

Delay of expected recovery of construction industry.

New competitors with access to cheaper resources entering the market.

Legislative changes with possible negative impacts.

(Research Methodology, 2013)

Other datacentre providers.

Vendors of prefabricated systems and components.

Wholesale datacentre companies.

(Schafer & Donoghue, 2013)

Strategic choices

Strategic choices involve the options for strategy in terms of both the directions in which strategy might move and the methods by which strategy might be pursued. For instance, an organisation might have a range of strategic directions open to it. The organisation could diversify into new products. It could enter new international markets or it could transform its existing products and markets through radical innovation. These various directions could be pursued by different methods. The organisation could acquire a business already active in the product or market area. It could form alliances with relevant organisations that might help its new strategy or it could try to pursue its strategies on its own (Johnson, Whittington, & Schholes, 2011, p. 17).

Business strategy

"There are strategic choices in term of how the organisation seeks to compete at the individual business level. Typically these choices involve strategies based on cost (for example, economies of scale) or differentiation (for example, superior quality). Crucial is deciding how to win against competitor (for this reason, business strategy is sometimes called 'competitive strategy')" (Johnson, Whittington, & Schholes, 2011, p. 17).

Corporate strategy and diversification

The highest level of an organisation is typically concerned with corporate-level strategy. The fundamental question in corporate-level strategy is therefore which businesses to include in the portfolio. This relates to the appropriate degree of diversification, in other words the spread of products and markets. Corporate-level strategy is also concerned both with the relationship between the various business that make up the portfolio of the business and with how the corporate 'parent' (owner) adds value to the individual businesses

(Johnson, Whittington, & Schholes, 2011, p. 17).

International strategy

"Internationalisation is a form of diversification, but into new geographical markets. It is often at least as challenging as product or service diversification". (Johnson, Whittington, & Schholes, 2011, p. 17)

Innovation and entrepreneurship

"Most existing organisations have to innovate constantly simply to survive. Entrepreneurship, the creation of a new enterprise, is an act of innovation too". (Johnson, Whittington, & Schholes, 2011, p. 17)

Acquisitions and alliances

"Organisations have to make choices about methods for pursuing their strategies. Many organisations prefer to grow 'organically', in other words by building new businesses with their own resources. Other organisations might develop through mergers and acquisitions or strategic alliances with other organisations". (Johnson, Whittington, & Schholes, 2011, p. 17)

Strategic choices of SKANSKA

According to the business plan for 2011-2015 of SKANSKA, they based on ensuring that all four business streams shall grow while maintaining a strong focus on profitability. There some strategic choices of SKANSKA. They are, (2013)

To focus on its core business in construction and project development.

To be an international company, focused on selected home markets.

To focus on recruiting, developing and retaining competent employees and to take steps to achieve increased diversity.

To be a leader in identifying and systematically managing risks.

To be a leader in the development and construction of green projects.

To be an industry leader in sustainable development, particularly in occupational health and safety, the environment and ethics.

To capitalize on urbanization trends and take advantage of the Group's know-how and experience as a city builder.

To take advantage of financial synergies in the Group by investing the cash flow from construction operations in project development.

To take advantage of the cost reduction achieved from coordination of the Group's purchasing.

To take advantage of the potential efficiency gains found in greater industrialization of the construction process.

To act as a responsible member of the community in all our operations.

(2013)

Strategy in action

Managing strategy in action is about how strategies are formed and how they are implemented. The emphasis is on the practicalities of managing.

Strategy evaluation

"Once a set of strategic options has been established, it is time to evaluate their relative merits. There are range of financial and non-financial techniques for evaluating suitability, acceptability and feasibility". (Johnson, Whittington, & Schholes, 2011, p. 18)

Strategy development processes

"Strategies are often developed through formal planning processes. However, while formal planning is important, in practice the strategies an organisation actually pursues are often emergent - in other words, accumulated patterns of ad hoc decisions. Bottom-up initiatives and rapid responses are unanticipated". (Johnson, Whittington, & Schholes, 2011, p. 18)

Organising

"Once a strategy is developed, the organisation needs to organise for successful implementation. Each strategy requires its own specific configuration of structures and systems". (Johnson, Whittington, & Schholes, 2011, p. 18)

Leadership and strategic change

"In a dynamic world, strategy inevitably involves change. Managing changes involves leadership, both at the top of the organisation and lower down. There is not just one way of leading change, however: there are different styles and different levers for change". (Johnson, Whittington, & Schholes, 2011, p. 18)

Strategy practice

"Inside the broad processes of strategy development and change is a lot of hard, detailed work". (Johnson, Whittington, & Schholes, 2011, p. 16)

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Table1.1

(Johnson, Whittington, & Schholes, 2011, p. 19)

Strategic acquisitions of SKANSKA

SKANSKA's strategy also includes boosting the market share and strength of SKANSKA's construction operations in their home markets. In 2011 they thus acquired companies in Finland, Poland and the U.S. Both Finnish-based Soraset and Poland's PUDiZ Group are very good companies that will pay off in terms of expertise, growth and profitability. (2013)

Their U.S. acquisition, Industrial Contractors Inc., is large and stable.

It will give a foothold in two new markets strengthening their competitiveness in energy-related and industrial construction, and gaining a strong presence in the Midwest. This unit, which will now be called Industrial Contractors Skanska (ICS), is based in Indiana, but they will take advantage of its expertise in other markets as well. The acquisition boosts the revenue of Skanska USA Civil by one third. ICS will also contribute to their profitability. (2013)

Ensuring the health and safety of SKANSKA's work sites is one of their most important tasks. During last years they developed a new tool - the Skanska Safety Road Map. It is both a checklist and a to-do list for facilitating and supporting the efforts to achieve healthy and safe work sites. Overall, they laid a stable groundwork for continued profitable growth in keeping with the business plan. Based on construction volume and their financial strength, the aim is to enable the various business streams to interact and thereby lift each other to new heights. Last few years SKANSKA demonstrated that this strategy is sound and works in practice. But the big payoff on the Company's potential still lies in the future. (2013)

During 2012 they can celebrate the first 125 years of SKANSKA's operations.

During the first 75 years, they modernized Sweden. In the past 50 years they have gradually increased international commitments, and today they are an important builder of communities in all their home markets. (2013)

They are also continuing to help improve societies. The New Karolinska Solna University Hospital in Sweden will provide world-class healthcare. In Bristol, U.K., they have developed modern schools that stimulate learning and help reduce bullying. The new green properties they build require less energy and reduce greenhouse gas emissions. SKANSKA's customers and tenants can trade up to modern office space while helping to improve the environment.

With their highly proficient employees and strong values, they have a stable platform to continue to build on. (2013)

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