Chapter 3: Comparison between S.W.O.

T and Other Analysis

3.1 Types
There are number of different analysis that are done in industries, business companies or firms.
Naming few main analysis are:
1. PESTLE - Political, Economical, Social, Technological, Legal and Environmental
2. Benchmarking
3. Growth-Share Matrix
4. Portfolio Method
Most of the cases it is seen that the above analysis are done to support the result of S.W.O.T.
In this chapter we are going to discuss the difference between the other analysis and S.W.O.T as
much as possible.
3.2 PESTLE and S.W.O.T
PESTLE analysis is used as a tool by companies the world over to track the environment they're
operating in or are planning to launch a new project/product/service etc. Similar to SWOT analysis,
there are certain questions used for conducting this analysis, which give them an idea of what
things to keep in mind. Questions include mostly about:
Political: The political situation of the country and its effect in the industry
Economy: The prevalent economic factors
Social: How much importance does culture has in the market and its determinants
Technology: Technological innovations and their effect in the market structure
Legal: Legislations that regulate the industry or any change in the legislations for the INDUSTRY
Environment: The environmental concerns for the industry, It may be so! That the importance of
each of the factors may be different to different kinds of industries! But it is imperative to any
strategy a company wants to develop that they conduct the PESTLE analysis as it forms a
much more comprehensive version of the SWOT analysis.

3.3 Benchmarking and S.W.O.T

Benchmarking is used to measure performance using a specific indicator such as, cost per unit of
measure, productivity per unit of measure, cycle time of x per unit of measure or defects per unit of
measure resulting in a metric of performance. Whereas in S.W.O.T; Strength, Weakness,
Opportunities and Threats of a company are taken into account. Benchmarking may be a one-off
event, but is often treated as a continuous process in which organizations continually seek to
improve their practices but S.W.O.T is done before the start of a project with a final result.
Benchmarking method focuses on the following points before implementing a plan.
Identify problem areas
• Identify other industries that have similar processes
• Identify organizations that are leaders in these areas
 Survey companies for measures and practices
 Visit the "best practice" companies to identify leading edge practices
 Implement new and improved business practices
Similar to SWOT analysis, Benchmarking can be internal or external.
However, within these broader categories, there are three specific types of benchmarking:
1) Process benchmarking, 2) Performance benchmarking and 3) strategic benchmarking!

3.4 M.O.S.T and S.W.O.T

M.O.S.T is a superior strategic planning tool helps to clarify Mission - where the business intends
to go, Objectives- the key goals which will help to achieve that mission, Strategy - analyses what
options there are for proceeding forward and Tactics - how these strategies are going to be put
into action. Comparing with S.W.O.T, we find that M.O.S.T is a sort of visionary planning, where
and how a company can reach their aim completing their goals. However in S.W.O.T, how a
product or project can fulfil ones need comparing other product or projects can be analysed.

Chapter 4: S.W.O.T analysis in Construction Sectors

4.1 Why S.W.O.T for Industrial Sectors
A country's development depends on its construction sectors. Construction industries can be
international or local but both are beneficial for the country. Such industries are capable of bringing
huge foreign remittances if they can cope up their productions, quality and maintenances with
other foreign industries. There are great deals of challenges for industry owners who want to
maintain an international standard for their product. Challenges may include quality, production
rate, profit, growth-share rate, stability in the market etc. An owner also has to be aware of the
existence of other industries which also produce the same items and how to compete with those
industries. As a result to compete with the other industries, an owner wants to perform S.W.O.T
analysis with respect to other rival industries. In industrial sectors, S.W.O.T analysis reveals the
ups and downs of the company, where to invest, which product needs more modification and
improvements etc. Performing S.W.O.T analysis, an owner of the industry can easily understand
the market situation, product demand etc. and can come up with a solution.
In this chapter we are going to discuss about the facts that are dealt during analysis. We are going
to discuss the subject into four separate parts, Strength, Weakness, Opportunity and Threats.
4.2 Performing S.W.O.T Analysis for an Construction Industry
Here we are going to discuss about Civil Engineering industry in UK. Agile Construction Initiative is
a project which was established at University of Bath with an objective to collect data to compares
civil engineering processes and provide information to develop the civil engineering industries with
world class performance. It was established mainly because of the market conditions of the world.
It is seen that the civil engineering industries in UK are unable to compete with the industries in
US, Europe and Japan. The analysis on which Agile Construction Initiative project was developed
are given below:
• The dominance of world market for civil engineering.
• Domestic contractors vs. foreign contractors in domestic markets.
• Fragmentation of domestic markets with many contractors competing for market share.
• The international market for civil engineering is mainly in the newly industrializing countries
of South East Asia (including China), South America, the Middle East and Eastern Europe.
• Importance of privately financed projects in both the main domestic markets and the
international markets.
 • Capacity in the UK civil engineering market vs. Low profit margins.
• Clients demand in procure projects due to the effects of infrastructure privatisation and the
introduction of the, private finance Initiative.

Strengths and Weaknesses of the UK civil engineering industry

• The traditional procurement method for civil engineering contracts in the UK has been
design-bid-build.
• The UK construction industry is beginning to speak with one voice across a range of issues.
The subsequent establishment of the Construction Industry Board.
• The largest UK civil engineering contractors by turnover are Tarmac and Balfour Beatty at
13th and 14th in Europe, France has the four largest, Germany three in the top ten and Italy
two in the top ten.
• With more and more work being financed privately the leading UK civil engineering
companies may not have the financial strength to compete against their bigger European
rivals.
• The level of education in the UK construction industry is lower than that in its European
rivals.
• The level of research and development expenditure by the UK construction industry is lower
than some of its international rivals, in particular Japan and the US and very much lower
than other industries.
• Weakness of UK civil engineering is that contractors have a reputation for bidding prices
that are below cost in order to gain work and then attempting to cut costs by compromising
on quality and increase revenue through the claims process. Clients are increasingly
adopting procurement methods that do not allow additional revenue to be generated in this
way.
• Some civil engineering contractors have succeeded in responding to clients new
expectations and their profitability has improved.
• UK civil engineering contractors have less in-house design capabilities than their overseas
rivals. This may be a disadvantage in winning turnkey projects overseas and privately
financed projects at home.
• UK civil engineering contractors have been slow to start operations in Europe. With the
single European market and harmonization of specifications across Europe, this may leave
them vulnerable to entry from European contractors who are already working throughout
mainland Europe.
• UK civil engineering industry has been slower than other industries to exploit information
technology in its main value adding processes.
• The level of integration of the design team is low compared to other countries and
industries.
• Some successes have occurred in value engineering of projects but value management
throughout the life of a project is not as well developed as in other countries.
• The leadership style on sites differs greatly from that seen in other countries.

Opportunities that exist for the UK civil engineering industry

 The US market is highly fragmented and may present opportunities to UK civil engineering
companies.
 Newly industrializing countries have a need for infrastructure to sustain economic growth
but less well developed home industries and a shortage of money to finance development.
Companies that can arrange finance will find opportunities in these markets.
 Privately financed infrastructure projects represent the greatest opportunities in the UK in
the foreseeable future.
 Environmental policies, such as the landfill tax may lead to pressure to reuse materials or
look for alternative materials.
 Client expectations have changed and civil engineering companies that become more
customer oriented will get more business from these clients.
 Higher client expectations and increased use of design and build and design, build, finance
and operate contracts give the leading contractors the chance to increase the barriers to
entry to the industry.
 Companies that make a concerted effort to develop core competencies that are value by
clients will be able to differentiate themselves from their competitors.
 The UK government and the EU are both working to create research agendas to meet the
specific needs of the construction industry for research and development.
 A crucial element of lean thinking is the integration of design and production, which leads to
faster projects, using fewer resources and providing a better result.
Threats to the UK Civil Engineering Industry
• Existing competition is intense and there is overcapacity in the market
• Fragmentation of markets compared with other large scale engineering activities such as
aerospace or shipbuilding. Competition between players is therefore keen and margins low.
• The overcapacity in the civil engineering market has been sustained by shareholders and
banks who have been unwilling to wind up operations that have consistently
underperformed over a period of years.
• UK civil engineering clients have traditionally bought on the basis of lowest price. With
overcapacity and a large number of companies in the market, this has led to pressure on
prices and margins.
• Separation of design and construction by clients has limited the opportunities for
contractors to differentiate their offerings from one another. Low prices have therefore been
achieved by passing price pressure down the supply chain rather than through innovations
in product and process.
• Some suppliers exert power over the contractors they supply. Certain suppliers enjoy
monopoly conditions; others have a particular advantage with respect to certain contracts
due to the economics of transporting bulk materials. These suppliers are able to resist price
pressures from contractors.
• With a good supply of competent suppliers and subcontractors there may be a rise in the
number professional construction managers who will take work away from the traditional
main contractor, as result quality and performance may deteriorate.
• Competition from overseas is increasing. The main threat to UK contractors in their home
market is from Europe. The threat has three elements (i) the opportunities presented by PFI
(ii) harmonization of specifications carried out as part of the Single European Act, and (iii)
the globalization of infrastructure.
• Falling demand for civil engineering due to the rise of alternative to construction
• There are predictions that demand for transport infrastructure will be hit by the use of IT to
increase the capacity of the current infrastructure or as a substitute for travel.
• Increases in the amount of off-site manufacture will shift turnover from contractors to
suppliers.
This above example or situation gives us a clear idea about what are the problems that may
arise and what are the positive ideas for competing with other industries. It seems that in every
stage of a company's growth there are things to understand such as, market demand,
availability, innovations, quality and experience etc. Through analysing the number of problems
and ideas, a company may come out with a perfect solution which will give them a leap forward
to developments.