Q1 a) Discuss how the Economic Climate could affect L&H bidding strategy as a Main Contractor and how they may monitor their success rate. (25 Marks) Ans. The UK construction sector has a great importance and links to its economy, as the construction industry is about 8.5 % of the GDP of UK…
But now the situation is getting better and the CSN also stated that the industry will have a growth rate of 1.4% each year from 2011-14. Under such a recession that the medium and small contractors must restrategize themselves, their policies and their operating zones. As it is seen that the north parts of UK have seen massive downturn, and whereas other parts such as wales and London have seen growth due to important events such as Olympics and etc. It is to be noted that there are about 614 contracting companies working in the south east England which is the highest no of companies that work in any other region of UK, on the other hand there are about 511 contracting companies that operated in the London region. This statistics clearly show the high level of saturation in the market and the stiff competition to get projects. This fact the bidding process of L & H significantly, as L & H should go for the project which it has been invited for and at the same time it should be conscious of the fact that cost analysis of the project should be done vigorously and carefully as new location of project can open new markets for the company as well as cause loss to the company due to in experience in that region. The solution I suggest for the problem is that L & H must go for the bidding process with its full strength and if it is successful in getting the project it must involve and hire the workers and form a team which consists of the local people as well as L & H old loyal workers. Personally I believe that if L & H gets the new work at even a small profit it should go for it, as the main focus of the company should be getting projects and sustaining itself in recession. Then another fact that is to be noted that the growth rate of construction industry is about 1.4% but the growth rate of the south east England is just 0.8% which clearly shows that the growth in this region is less and companies need to move out of the region to sustain their own growth. Then L & H must also view which type of project is it bidding for, it is to be noted that there is huge growth in some sectors of construction industry and there is huge decay in the others. It is suggested that the L & H should be looking forward in creating its good will and name in the public sector as it is the only sector having significant funding at the moment. Whereas on the other hand private sector is not any longer investing much as it is in process to recover itself from the recession and has no confidence on the returns. It is to be noted that infrastructure sector of the construction industry is growing immensely that is it is growing at a rate of more than 6.7 % and majority of the projects coming up are of Infrastructure, contrary to this is the housing sector which is badly struck and experience a decay of 3.9 %. So when L & H must be bidding and going for projects in infrastructure sector. Concluding the discussion if L & H is to survive in these difficult times of recession and have to sustain its own growth it has to take a certain level of risk which is to expand its operational area and work in areas where there is both growth and lesser competition. On the other hand it has to emerge itself as a mainstream public sector contractor which mains interest is working in infrastructure and development. b) Morale has been low on several sites in one area, communication and quality of work has suffered. Discuss It has been proved ...
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