Strategic analysis is crucial for industries to gather and analyse crucial data related to both internal and external corporate environment. In this report, a strategic analysis of Adelaide Brighton Ltd, a cement manufacturing industry will be done. For that purpose, the internal and external business environment will be studied and evaluated by making use of PESTLE, Porter's five force model. The competing environment will be studied in the context of the industry. The second part of the report will talk about the internal analysis of the company. For that purpose, the core competencies will be analysed and a suitable information system will be proposed. The report will conclude with certain recommendations regarding the same.
Adelaide Brighton ltd is an Australia-based Company and is one of the prime manufacturing firms in the material sector. The company has 1400 employees. The firm manufactures and distributes cement and other material, such as premixed concrete, clinkers, lime, and concrete products. It operates cement production in Western and Southern Australia, whereas the industrial lime manufacturing takes place in the Western and Northern territory. The major target market of the company comprises engineering construction, non-residential and residential construction, alumina and steel making industries, and mining.
Adelaide Brighton Ltd. initially started as cement manufacturing industry in the material sector. The company's prime activities involved manufacturing, distribution of material, and importation. The company produces a wide range of products for different fields, namely mineral, processing, infrastructure, construction, and building.
The environment analysis can serve as an important instrument for a sound decision-making. It provides information regarding the diversification of Adelaide Brighton Ltd. For this purpose, a PESTLE analysis is used (Ho, 2014).
Political Factors: These factors can affect the operation both directly and indirectly. As the company imports certain material for its production, the operations of the company are exposed to many political risks. Factors, especially the taxation rates, import-export policies, wage legislations, etc., affect the business.
Economic Factors: Inflation and recession are two economic factors that could severely hit the company’s profitability. Inflation would increase the prices of the raw materials and other services. In addition, the recession would have an effect on the disposable income. This reduces the demand for the products and services offered by Adelaide. Other factors, such as infrastructure quality, government interventions of free trading, growth rate, etc., affect the company (Ho, 2014).
Social Factors: The demographic factors, skill levels of people, societal culture, and shared beliefs play a significant role in influencing the marketer’s abilities to understand the target market of Adelaide Brighton ltd and the product design & development.
Technological Factors: Technology is ever-changing and to maintain the competitive position in the market, Adelaide Brighton Ltd., has to update its technology time-to-time. Being a Material industry, technology can affect the cost structure of the company. In addition to this, it affects the value chain structure of the Material sector.
Legal Factors: The Company has developed many distinct products that have their own secret methods. The company has to safeguards its intellectual property rights. Cement production companies often face serious criticism due to their environmental impacts. It has to consider laws regarding environmental protection, health, and safety of employees, discrimination law, data protection, etc.
Environmental Factors: Cement manufacturing industries usually have a high carbon footprint as a result of which, Adelaide Brighton faces many environmental restrictions while operating in Australia. It has to pay a large amount of penalty to the government due to its environmental impact. This affects the profitability of the company.
To analyse the internal environment of Adelaide Brighton Ltd, Porter’s five force model can be used. This analysis method will focus on the sustainable competitive advantage of Adelaide Brighton Ltd in the Material sector. This would help in developing an effective strategy to gain an edge in the market (Dulčić, et.al, 2012).
Threats from New Entrant: The scale of production of Adelaide is very large. Therefore, if any new entrant wants to enter the market, then it needs a huge investment to compete with existing Adelaide and other firms. But, if the product of the new entrant is unique and innovative, then it can be a real problem for the company. Hence, a new entry can have a moderate impact on the company's profitability.
Bargaining Power of Supplier: Adelaide depends on a number of suppliers for raw materials. These suppliers always try to cut a higher price deal. Since there is a large number of suppliers, the power of the supplier to control the price gets reduced. Hence, this force is not as strong as that of buyer's.
Bargaining Power of Buyers: Adelaide Brighton Ltd is the leading cement producing company and has a large customer base. Therefore, in order to sustain the customer base, the company cannot afford to lose them in the first place. Due to high competition, the buyers can negotiate the price of the products. This shows that buyers can have a strong influential force.
Threats from Substitutes: Since the company operates in a highly competitive market, the chances of a substitute product to grab the market share are very high. If in any case, the substitute product's quality is better than Adelaide's product, then the customer may get inclined towards the substitute. Therefore, the impact of this force is considered to be moderate (Dulčić, et.al, 2012).
Competitive Rivalry: Adelaide Brighton is not a sole player in the Material sector. The competition is intense and can affect the long-term profitability of the company. The impact of this factor is very large. To combat this force, Adelaide can improve its scale in order to compete better and working towards sustainability differentiation.
Adelaide Brighton Ltd operates in a highly competitive market. The major players of the market include both domestically and internationally leading cement industries. This comprises Lafarge, CRH plc, Cemex, Heidelberg Cement, etc. To top it all, the Australian government's decisions to liberalise the market increased the competition to a larger extent. Therefore, to compete in the competitive market, the company can go for cost leadership strategy, special focus approaches, and product differentiation.
Opportunities for Adelaide Brighton Ltd
Threats for Adelaide Brighton Ltd
The company deals in cement, dry blended construction products, and lime. It has a long list of associated brands and firms that comprise Northern Cement, Sunstate Cement, Cockburn Cement, Geelong Cement, Independent Cement & lime, and Building Product Supplies. In addition to this, the company has an employee base of 1400 workers across Australia. The company is characterised as S&P/ASX100 and is known for its employee-friendly working environment. Adelaide Brighton has formed numerous associates and joint ventures in order to increase its dominance in material and construction & distribution sector. The Company is depending on a number of limestone quarries and alumina quarries. It has two mining facilities, namely Rapid Bay Limestone Quarry and Klein Point Limestone quarry. Apart from this, it also owns two processing facilities, namely Angaston Plant and Birkenhead Plant. The Company has 1400 employees. The firm manufactures and distributes cement and other material, such as premixed concrete, clinkers, lime, and concrete products. It operates cement production in Western and Southern Australia, whereas the industrial lime manufacturing takes place in the Western and Northern territory. The major target market of the company comprises engineering construction, non-residential and residential construction, alumina and steel making industries, and mining.
Adelaide Brighton Ltd has three main domains, namely Concrete and aggregates, Cement and Lime, and Concrete Products. It has registered a great success over the last two decades. The firm manufactures and distributes cement and other material, such as premixed concrete, clinkers, lime, and concrete products. In order to reshape the company, it has undergone processes, such as merging, acquiring, expanding, and consolidating. This business model has created a high value for the investors and for the organisation. The company has registered a success in identifying the region of growth within Australia. These areas are undergoing rapid urbanisation, thereby creating large opportunities for the company to shine.
Core competency analysis is carried out by the company in order to determine the weaknesses and strengths. It is important to understand them if a company wants to grow in a particular market. In addition to this, the company can calculate its potential of sustaining in the market and compete with other rivals (Thistlethwaite, et.al, 2016). The core competencies of Adelaide Brighton can be arranged into a different group, namely Core, Support, and Operation competencies.
The core competencies are quintessential and are needed every time at all organisational level. These are not process or equipment specific but are more focused towards health, safety, interpersonal skills, quality, and environment. For Adelaide Brighton, there are 2 types of ‘core only' competencies:-
Operation Competencies are related to operations that result in the final product of Adelaide Brighton. These are often considered as sector specific. The cement manufacturing industry is associated with more than one sector. These competencies are related to operating machines, equipment, processing, designing, and finishing the product (Monczka, et.al, 2015).
Support Competencies are required while completing a task but are not associated with operations. These are applicable to any of the Material sector. These are associated with shifting of the material, packaging of cement, storage of final product, conflict management, and quality management (Monczka, et.al, 2015).
Adelaide Brighton is a cement industry and therefore, it involves multi-departmental information exchange, workflow execution, and coordination. This poses a great challenge for the company. Hence, to curb this issue, the Management Information System is essential for the company in order to have an edge over the competitors. The company has to have a seamless control over its processes. This system can help the cement industry in data collection from the process control system and then make them available for analysis purpose. It stores the historical data and later that data can be displayed. This way the company can compare one plant with other by making use of certain trend charts at a different time interval. Furthermore, the business organisation is greatly affected by the globalisation. This may shift the whole business market majorly. Hence, proficient MIS system can help in improving the business commitment and management.
The suggested Management Information System has both advantages and challenges. The major advantages of this system are:-
On the other hand, there are some challenges also:-
Recommendations for the Information System
In this report, a strategic analysis of Adelaide Brighton Ltd, a cement manufacturing industry was done. For that purpose, the internal and external business environment were studied and evaluated by making use of PESTLE, Porter's five force model. The competing environment was studied in the context of the industry. The second part of the report talked about the internal analysis of the company. For that purpose, the core competencies were analysed and a suitable information system was proposed. The report concluded with certain recommendations regarding the same.
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