Business Analysis Tools For Aurecon SG

Discuss aboout the Strategic importance of functional level strategies.

The purpose of this report is to solve the issues that the management of Aurecon SG is facing while operating the business in the market of Singapore. In this report an industry and company research has been performed and relevant business information is synthesised. In these report, relevant tools, theories and models are identified to get to know the bottom of the problem (Agwu and Onwuegbuzie 2017). One of the major purposes of this report is to identify the strength and weaknesses of the tools, theories and models and to suggest the limitations of those models and what other models or tools can be utilised to investigate the issues that are currently troubling the management of the organisation.

RQ1 Is Pestle, Vrio and porter 5 analyses are enough to determine all the factors that are making the management of the organization facing challenges?

RQ2 What other analytical tools the managements of business organizations like Aurecon SG to determine the factors that are challenging for the organization?

Aurecon is a well established business organisation that operates in the engineering management, project management and in consultancy industry majorly based in South Africa and Australia. Apart from these nations the businesses of Aurecon is spread in the market of Middle East, New Zealand, and in various countries in Asia too. These services include environmental management, digital advisory, and also integrated planning for satisfying the requirements of various business organisations, domestic needs and needs of the government (Aurecongroup.com, 2018).

In this section of this report it is mentioned that why external and internal analysis tools such as porter 5 model, pestle and vrio framework is not adequate to analyze the risks that the management of Aurecon Sg is facing nowadays.

Pestle analysis advantages and its limitations.

Vrio is an analytical tool that is used to make strategic planning by the managements of the business organisations.  This analytical framework helps the managements of the businesses to get necessary information to get the competitive advantage (Tolu et al. 2015). Vrio analysis helps to analyze the internal environment to identify the resources and to evaluate them. To be precise, it can be said that the information and results gained from Vrio analysis helps to analyze what competitive advantage the resources will supply the business organisation.

There are various disadvantages of vrio analysis is that while analyzing at times the organisation’s overall vision and the strategy gets lost and the operations of the company breaks down into various segments (Theocharous et al. 2015). While creating efficiencies is important for any business organisation, Vrio analysis does not allow the managements to link each activity in the chain together and that might lead to lose sight of how various activities relate to each other.

Porters five forces framework is used to get valuable information regarding the attractiveness of the business organisations by indentifying various forces of the industry and by understanding the interaction among them to evaluate the possibility of profitability within the industry.

Other Analytical Tools for Aurecon SG

It can be said that today’s market has been significantly changed from the market of the late 70s in terms of the rate of rapid changes in the industries and the market structure’s stability (Agwu and Onwuegbuzie 2017). Immense changes in the technological sector also affected the contemporary market. This analytical tool has two major weaknesses and the primary one is in its composition. As a static model, this framework delivers a snapshot of the industry in a wider scale and it can be utilised for strategizing for short term goals (Miller and Pessoa 2016). In making long term strategies, it would not help that much to the management of Aurecon SG. The second major mistake using this framework is that applying this framework to a specific business organisation rather than on the industry is a gross mistake. As this model can provide only information to ease the strategic decision making and it does not work as a company analytical tool. For that, it would be beneficial if the management of the business organisations use swot analytical tool.

Thus it can be said that the management of Aurecon SG can use other analytical tools such as Blue ocean, 7s, VUCA and dynamic capability frameworks to analyze the internal and external environment for securing the best interests of the business organisation.

Blue Ocean strategy– Blue Ocean strategy refers to the existence of less competition in the market. The strategy applied revolves around identifying a business that has less pressure from competitors and pricing strategy does not have to be implemented in the market. The application of Blue Ocean strategy can be implemented in various business and sectors across the market (Mebert and Lowe 2017). The application is not limited to any one particular business and is one of the most effective strategies that define the management of an organisation. In the modern world, most of the organisations operate under competitions that provide immense pressure in terms of gaining market share. The production of an organisation may come under threat with the application of pricing pressure. In the words of Kim and Mauborgne (2014), such a situation can be termed as Red Ocean strategy that defines the manner in which organisations tend to combat the pressures in the market.

In the case of Blue Ocean, there are limited opportunities for growth in the market. However, the opportunities for gaining a huge market share are more consideration the fact that the number of competitors in the market is limited. In the case of Aurecon, the company has less threat in the engineering consultancy industry. This is mainly because of the fact that the company is one of the best engineering consultancy firms in the country. Mi (2015) commented that despite the fact that certain competitors such as KPMG, Deloitte Touche Tohmatsu and PricewaterhouseCoopers exist in the market, the competitors does not have the resources to threat the capabilities that exist in Aurecon.

7s Strategy- McKinsey’s 7-Stratgey is used to define the hard and soft elements that exist in business management. The hard elements can be easily defined and identified and the managerial implication for these elements is the fact that it can be influenced. For example, strategies implemented by Aurecon over the introduction of latest technology in the organisation can depend upon the structure and system of the organisation. Ravanfar (2015) stated that the formal process and the IT system of a company are considered as the hard elements as control over these elements rest with the company. On the other hand, the soft elements involve the intangible factors that govern an organisation. Most scholars are of the opinion that without the existence of the hard elements, an organisation cannot grow. However, Shiri, Anvari and Soltani (2015) defined that the soft elements are as important as the hard elements as the culture and values of an organisation are defined with the application of these elements. One of the important aspects of the application of the 7s strategy is the fact that every element is connected to one another.

Blue Ocean Strategy

The non-existent of any one of the element can result in the downfall of an organisation. In the case of Aurecon the company needs to ensure that the implication of the soft elements are done effectively as the values, style, staff and skills present in the organisation are its main asset. Gökdeniz, Kartal and Kömürcü (2017) stated that the reason behind the success of Aurecon lies in the fact that the company relies heavily on the skills of the staffs.

VUCA- According to Sharif and Irani (2017), the VUCA framework refers to the use of strategic leadership across organisations. Every organisation requires the application of the VUCA framework to analyse the volatility, uncertainty, complexity and ambiguity that exists in the business. The lack of predictability can arise mainly due to the existence of the external factors of business. This gives rise to the complexity as the issues identified create a chain of confusion in an organisation. Mack and Khare (2016) stated that most of the times the fear of accepting the reality gets an organisation to fail in its productivity. The manner in which an organisation views its current and future state can be analysed with the help of this framework.

In the case of Aurecon, the application of VUCA framework can help in the retention of the competitive advantage it has in the market. For example, some of the factors that may be volatile for the company are the economic condition of Singapore, price of the economy and the infrastructure that exists within the company. These factors contribute to the realisation of the uncertainty factors that exist in the economy. For example, usually the economy of Singapore is rich but there may be times when the economic factor may drop. Hence, it is necessary to take into consideration the factors that contribute to the downfall of the economy. This is considered as the uncertainty venture in which the company need to comply with the changes in laws of the country (Mack et al. 2015). Hence, it is necessary to diversify the products in the market and ensure that the policies of the company are kept intact.

Table 1: VUCA analysis

(Source: Created by author)

Dynamic capabilities- In the words of Helfat and Peteraf (2015), dynamic capability refers to the capability of organisations to change and maintain the base resource. It can be related with the ability of an organisation to integrate, build and reconfigure any internal as well as external changes and competencies that are required in the business market. The manner in which an organisation can adapt itself in the market defines the factors that are required for the effective management of an organisation. Teece (2014) observed that the concept of dynamic capabilities is similar to the concept of operational capabilities.

Alpha consulting engineers pte ltd is a rival company of Aurecon and they are currently doing good in the market of Singapore where there is fierce rivalry of the similar organizations. Alpha was established in the year of 1995 and since then they have secured the market of engineering consultancy and eventually became a huge name in the market of Singapore. The management of the business organization have applied analytical tools like Vuca, Blue Ocean and 7s to determine the external and internal factors that can harm or prove to be beneficial for the organization along with analytical tools like pestle and vrio. Thus naturally the management of Alpha has been able to experience productivity and more profitability in the oddest times in the market of Singapore having numerous competitive advantage over Aurecon SG.

7s Strategy

VUCA: In the case of Alpha, the company has faced similar issues like Aurecon. The application of VUCA in Alpha mainly focuses on increasing the reputation of the company. Unlike Aurecon, Alpha does not have the capability or resources to become the best in the world and expand itself in the global market. Hence, the volatility factors that are faced by Aurecon remain the same. However, Mack et al. (2015) stated that the fact that Alpha has its sole business in Singapore makes it possible for the company to remain competitive and exploit the growing richness in the economic market of the country. The complexity factor underlines the manner in which Alpha the employees tend to approach a project. The fact that such an approach makes it difficult to improve productivity of the engineering company makes Alpha to remain in the uncertainty region. The bright spot is the experience that can be gained from the uncertain experience. The manner in which Alpha can adapt itself in the changing market in Singapore can help the company become the best engineering company in the country. In this regard, the analysis of the VUCA of Alpha can be rated based on the scale of 0-5.

Table 2: VUCA analysis

(Source: Created by author)

7s-Strategy: Alpha engineering can apply the implication of the 7s-Strategy by identifying the capability that it possess along with the capabilities of the competitors. The culture and value of the company is such that it believes in the policy of providing quality work to the customers and in the manner gain their trusts. The connection of every element with one another can help Alpha to understand the capabilities it possesses. It has already been seen that the skills of the staffs of Alpha are not as effective as that of Aurecon. Hence, it is necessary for Alpha to ensure that the employees are developed in manner that can help the company gain a competitive advantage in the local market. The intangible factors of the company help in maintaining the balance with the tangible factors. The initial effort of the company is to ensure that the customers understand Alpha with the applications of the intangible factors. One of the strategies that Alpha can develop is improving the system. In order to become the best organisation in Singapore, Alpha needs to develop their systems. In the modern world, skills of the employees are measured by the ways by which they can manage the system in an organisation (Ravanfar 2015). Thus, the development of the systems can help Alpha gain the recognition for the success of the company. Thus, the re-alignment of the strategies need to be such that Alpha gain competitive advantage in the market and overtake Aurecon as the leading engineering company in Singapore.

Conclusion

Thus, it can be concluded that with the popularity of Aurecon, it needs to be seen whether the company can maintain its competitiveness in the market. The application of the external factor analysis such as Porter’s five forces, PESTEL and VRIO provide an analysis of the success criteria for the company. However, certain gaps exist that prevent the application of these models. The fact that these environmental analyses provide only one part of information does not justify the manner proper of assessing the environment. The application of other strategies such as Blue Ocean, VUCA and 7-S framework provide an analysis of both the external as well as the internal capabilities of Aurecon. Thus, the application of these strategic tools can help in formulating the capabilities and resources of the company.

Reference

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