Luddon construction ltd a privately owned Scottish based contractor. Luddon have been in the construction industry since 1975 and have steadily grown into one of Scotland's largest privately owned contractors. Luddon specialises in civil engineering and building in the construction industry. The civil engineering projects are the main part of the business and are 70% of turnover. The infrastructure and ground works are both carried out to the client directly and also to the main contractor this is usually on a package basis. Luddon are also preferred by the local authorities carrying works such as environmental improvement works, road alterations and traffic calming measures. Luddon also are used by the petrochemical companies such as BP and are currently involved at Grange mouth. Luddons building work are the industrial, commercial and medical sectors in the industry it includes minor works, repairs and defects and multi pound complex office design. The report will discuss Luddon as an organisation and examine there bidding strategy relative to ISO 9001:2001. As Luddon construction are quality assured organisation the work to a quality management system which demands high quality of all takes under taken by the organisation.
Corporate strategy is created decisions in an organisation that sets the objectives and purposes, these then sets policies and gives planning for achieving the objectives, it also sets the route of businesses the organisation is working to. It also sets the case for the economic and human organisation it sets to be. It also sets the economic and none economic ways of the organisation works towards with shareholders, investors, employees, customers.
Corporate strategy outlines the operation which the organisation will compete in. it will define the operation and business they will compete in. it will define the area and will outline the way that focuses resources to show a distinctive competence into a competitive advantage. This is an outcome of continuous method of strategic management.The strategic decision is set to achieve an effective and efficient outcome. The strategy is set and changes with the industry market. The strategy is in place to make the business more profitable and the business more successful.
In business the customer must receive value for money this is the same for the construction industry although it is the client who is known as the customer. For the client who must choose a contractor who will deliver a project. The process of bidding is carried out. A competitive bid will be received from invited tender contractors. The client and there professional representatives and consultants will examine and review all of the contractors competing from past experience which they have carried out similar to the proposed project. There is no purpose of receiving bids from contractors who are not equipped or suitable and have no chance of winning the project. The contactors in the construction industry who always issue low bids are regarded as being highly competitive than contractors who issue high bids. This would show the contractors as being inconsistently competitive in the construction industry.
In the construction industry surveys where carried out by Drew and Skitmore (1990) they established that there where two very successful methods of bidding (1) for consistently bidding very competitively for specific types of construction work and, thereby, having a comparatively low bidding variability relative to 2 other bidders and (2) being inconsistently competitive and having a comparatively high bidding variability relative to other bidders.
A later study from (Drew and Skitmore 1992) showed a significant correlation between competitiveness and bidding variability in which less competitive bidders where more variable in bidding. The suggestion came that it would be a more responsible solution in winning work successfully due to a less competitive bidder with a low variability would be unsuccessful to obtain any work and bidders who display opposite tendencies would in time become bankrupt.
To mistake, competitiveness variability has cause factors such as differences in cost estimates (Beetson 1983), mark up policies, serious, non serious bidsand the cause of subcontracting. The bid to win a contract is affected by type of project and project value (Flannigan and Norman 1982). Competitiveness variability is that some contractors have preference to the type of contract and value of project in the construction industry in which they then bid more competitively. In this report the aim is to discuss the competitiveness behaviour of contractors.
From this report we have examined bidding in the construction industry and Luddon construction. Due to the current situation with the economic climate the construction contracts are highly competitive at tender stage and projects are hard to acquire. This is due to contractors cutting profit margins and are in the current industry climate are carrying out works where income low and in most situations are cutting even or making a loss, this type of contractor is taking high risk. Construction organisation such as Luddon construction does not operate to this strategy of 'buying contracts' to have a full order book. As Luddon construction are on approved contractors list for the petrochemical industry and are an approved contractor for local authority carrying out such works as road alterations and are also an approved contractor with Bovis lend lease, they are invited to tender and are often awarded the work due to past experience of project and working relationship with the organisations. A major reason for Luddon winning contracts is due to there quality management system which is ISO 9001 which gives Luddon as an organisation a system and standard of set procedures to work to achieve high standards on every procedure they work to, and plan to work safely, time, cost and quality. As Luddon constructions logo statement 'the complete contractor' which with past of experience of using Luddon as a sub contractor they have met those expectations.