Analysis of Strabag Societas Europaea Company - Case Study Example

Table of Contents Table of Contents 1.Introduction 2 1 Strabag Societas Europaea: 2 a)History: 2 b) Activities 3 c) Management 4 d) Present Performance 4 e) Key Markets 6 f) Market Share 6 g) Major Competition and Market standing of the company 7 1.2 Construction Industry 8 1.3 Purpose of this Paper 9 Bibliography 11 1. Introduction The business chosen for this company is Strabag Societas Europaea. This section of the paper will deal with the details of the company and will provide details about the history, management and a brief introduction to the company. Since Strabag Societas Europaea is such a big organisation by itself, the main focus for the entire research will be a part of this organisation ‘Strassenbau’ which mainly deals with the road construction business. The following subsections will deal with a brief insight to the company and will provide a brief industry analysis as well. Also the main purpose of the paper will also be discussed here in this section. 1.1 Strabag Societas Europaea: The sub section will deal with a brief insight into the company and will provide for a cleat view on the share prices of the company as well. a) History: The company was founded in two main businesses, i) Lerchbaumer and ii) Strassenwalzenbetrieb. The first was founded way back in 1835 by Anton Lerchbaumer. This was later in 1954 renamed and recognised as ILBAU. The second was founded in 1895, which later in 1930, went on to be recognised as STRABAG. Both these businesses together were under a single ownership of BIBAG Bauindustrie Beteilingungs Aktiengesellschaft. This was later recognised to be Strabag SE. The company was listed on the Vienna Stock Exchange in 1998. However later in 1999, STUAG was taken over by STRABAG (STRABAG.com, 2009). The group was later recognised as one single brand and has been known as STRABAG ever since then. The other brands like the ILBAU, STUAG no longer exists and in Austria these have been recognised to be STRABAG AG. The table below provides a clear timeline of the company. Figure: Company Ranking (STRABAG, 2009) b) Activities The company, i.e. STRABAG SE has a number of complex processes. This can however be divided into three main lines of business and these include, i) Building Construction & Civil Engineering, ii) Transportation Infrastructures and iii) Special Divisions & Concessions. c) Management The company is head under the supervision of its CEO Dr. Hans Peter Haselsteiner. The Vice CEO of the company is Ing. Fritz Oberlerchner is responsible for the Technical Transportation Infrastructures of the company. Other major heads of the management include: i) Dr. Thomas Birtel (Commercial Responsibility Building Construction and Civil Engineering), ii) Dipl.-Ing. Nematollah Farrokhnia (Technical Responsibility Building Construction and Civil Engineering), iii) Mag. Wolfgang Merkinger (Commercial Responsibility Transportation infrastructures), iv) Dipl.-Ing. Roland Jurecka (Technical Responsibility Special Divisions & Concessions), v) Mag. Hannes Truntschnig (Commercial Responsibility Special Divisions & Concessions as well as Service divisions), (STRABAG.com, 2009). d) Present Performance The company’s current performance is impeccable and it employees as many as around 73,000 employees. The company earns as much as Euro 12, 227.8 million (as of 2008) and the company’s operating income is as much as Euro 269.9 million. The company also has a net income of as much as Euro 166.4 million (please note: all these figures are for the year ended 2008). STRABAG currently stands as the fourth largest construction company and is the number one company in Austria. STRABAG is one of the few of the largest groups which provide civil engineering, heavy constructions, and also concession services. The company constructs various projects like transportation infrastructures, power plants, bridges, water and waste treatments facilities and many buildings to cater for residential, commercial and also industrial purposes. The company specialises in the construction of roads and railway tunnels, underground galleries and also caverns. It also provides for various produces and supplies construction materials which include asphalt, concrete and aggregates. The figure below provides a clear understanding of the company structure and also provides for a clear view on the output for each region for the company. Figure: Company Structure (STRABAG, 2009) Figure: Output by Volume (2008) (STRABAG, 2009) e) Key Markets The company operates out of a number of markets. A clearer image of the markets that the company operates is in provided in the figure below: Figure: Overview of STRABAG’s Markets (STRABAG, 2009) f) Market Share The company at present holds a very strong position in the market. STRABAG is affiliated to the following companies and this helps the company generate higher levels of market share of the industry as well. The companies that STRABAG is affiliated to include, ZUBLIN AG, DYWIDAG, HEILIT+WOERNER, CRNAGORAPUT, MISCHEK, ZIPP, NCC and also Nostra Cement Kft (Austrian Times, 2009). This helps the company create a larger and stronger market for itself and thereby provides a chance to have a bigger chunk of the market and the industry customers as well (Global Markets Direct, 2009). Figure: Market Share of STRABAG (STRABAG, 2009) g) Major Competition and Market standing of the company STRABAG is known for its position that it has created in the markets. The company stands among the top five companies across the Central and European countries. This is clearly seen from the figure provided below: Figure: Current Standing of the Company in Central and Eastern Europe (STRABAG, 2009) 1.2 Construction Industry The construction industry is one of the fasted growing industries. However over the past few years the industry had suddenly seen a strong stoop and this lead to a number of companies being affected (Austrian Times, 2009). Reports and researches in the past show that the industry will again see high levels of growth in the recent future and will be able to regain its stability as well. As seen in the previous sections the company has gained a high market place and has a strong market share when compared to other companies as well. The industry has numerous high players and numerous big corporations however, STRABAG has been able to make its way through and ranks number 4 in the current industry. In a recent report by Hoover, it has been noted that the industry has been faced with a sudden stoop which is possibly going to improve in a very short period. The figure below highlights the drop in the markets and how the industry has been faced with high levels of issues and concerns. The graph below highlights how the industry has been faced with a drop, however this will recover very soon and the industry will again go back to being a major contributor to the aggregate economy as well. Figure: Dip and Recovery of the Industry (Hoovers, 2009) It is also essential to note that the industry is a major contributor to the national income and a drop in this industry will cause a major impact on the economy of the country as well. In another recent development there has also been information of the decline n the current year and the report clearly states that, ‘The nonresidential sector losses were mitigated by a 52 percent increase in manufacturing construction, followed by a 14 percent rise in public safety construction. A nearly 2 percent decline in highway and street construction spending may indicate that stimulus dollars allocated for some roadway improvements may be stalled by planning or other decision-making steps’ (Hoovers, 2009). 1.3 Purpose of this Paper The report provides a comprehensive insight into the company, including business structure and operations and key competitors. The paper is aimed at discussing about the STRABAG Company and to provide a deep insight into the working of the company and the current position of the company in the markets. As seen above, the introduction of the paper has dealt with a brief understanding of the company and some major features of the company along with a brief insight into the industry and the trends in the industry. Further more in this paper a few major aspects of the company will be discussed. This will include aspects like the issues that are being faced in the supply chain management of the company. Also a deep discussion of the physical function and the market mediation functions will also be discussed. These will provide a wholesome view of the supply chain management of the company and will also provide a clear insight on the issues that are being faced. Lastly a supply chain will be designed in this paper for the company. This will take into account all the current issues, the past issues and a prospective future. The supply chain will be designed to help the company improve from its current standing and move on to become the best company in the industry. The main purpose of this paper is to enable a clear view of the issues and then use the theoretical knowledge that has been gained from the various literatures and put it into practice. The designing of the supply chain will be helpful as it will provide for a real life company experience and how the issues can be tackled. The next section will deal with the major issues in the supply chain management. Bibliography Austrian Times, 2009, ‘Strabags German subsidiary gets €67mn contract’, 27th August 2009, Accessed on 18th September 2009, Retrieved from http://www.austriantimes.at/news/Business/2009-08-27/15955/Strabag%27s_German_subsidiary_gets_%8067mn_contract Global Markets Direct, 2009, ‘Strabag SE - Financial and Strategic Analysis Review’, Bharat Books Hoovers, 2009, ‘STRABAG’, Accessed on 16th September 2009, Retrieved from http://www.hoovers.com/free/co/competition.xhtml?ID=srtjy&FRIC=51&x=38&y=15 STRABAG, 2009, ‘Investor Presentation’, Accessed on 17th September 2009, Retrieved from http://www.strabag.com/databases/internet/_public/files.nsf/SearchView/366484E36BBD0540C12575AD00449741/$File/Investor%20Presentation_Mai%202009_AKTUELL.pdf?OpenElement STRABAG.com, 2009, ‘STRABAG – on its way to the top’, Accessed on 17th September 2009, Retrieved from http://www.strabag.com/databases/internet/_public/content.nsf/Navigation?OpenAgent&docid=79E200B4108F278FC125736A0046758E Read More