Bechtel group – Case Study Example

BECHTEL CORPORATION: SWOT ANALYSIS Bechtel Corporation SWOT analysis Bechtel Corporation (Bechtel) is one of the leading engineering, project management, and Construction Company around the globe. The company has offered these services around the globe, it has been contracted by developed and undeveloped countries. The company is characterized by its billions projects, it is famous for its construction feats on the Hoover, the Boston central Artery/ Tunnel project, and rebuilding of Kuwait’s oil and gas infrastructure after the invasion by Iraq in 1990. Competitive advantage of Bechtel is project management, competitive advantage is attained where the organization has unique resources and services that competitors can’t imitate. This paper is aimed at conducting a SWOT (Strength, Weaknesses, Opportunity, Threats) analysis of Bechtel corporation, SWOT analysis summarizes key issues from the business environment and strategic capability of a corporation that are mostly like to influence development of strategy (Johnson et al., 2009). SWOT Analysis for Bechtel Summary Matrix Helpful to achieving the objective Harmful to achieving the objective Internal origin (attributes of the system) Strengths Significant order backlog Worldwide operations Diversified business Weaknesses Delays in delivery Legal issues and claims Declined revenue growth External origin (attributes of the environment) Opportunities Nuclear power business Increasing energy demand in North America Rise in demand for Civil Infrastructures Globally Threats Stringent regulation Cost overruns Shrinking supply of skilled craft professionals I. STRENGTHS a) significant order backlog Bechtel Corporation has a significant order backlog worth billions of dollars. Some of the corporation’s recent projects include: Construction of 30 high-security data centers worldwide for Equinix, Inc. worth $1.2 billion Construction of natural gas pipeline in Thailand $ 700 million Building of a new subway in Athens, Greece worth $ 2.6 billion Such backlogs of projects ensures that the corporation is guaranteed of revenues for some time, hence a strength that some of its competitors don’t possess. b) Worldwide operations The corporation has established itself around the globe, it has managed to conducts its operation almost in all parts of the globe. This strength can’t be compared to some of its competitors that have conducted their operations in few countries. When countries or companies around the globe seek to manage massive projects, they contact Bechtel Corporation. c) Diversified business Bechtel Corporation is engaged in various forms of business activities, which enhances that when one type of business fails others will sustains the business (Kotler et al., 2009). The company is engaged in various activities such as construction, engineering, and project management. II. WEAKNESSES a) Delays in delivery One of the major weakness that Bechtel faces is delays in deliveries of construction materials. The materials slows down the stipulated time of completing a project, disadvantaging the company (Cadle et al., 2010). The delays can be managed by contacting efficient companies that can supply the materials. b) Legal issues and claims Legal issues and claims as a result of compensating those who and has been used to construct some projects. There are also political issues that surrounds constructions of some projects in some countries raising legal concerns. c) Declined revenue growth Declined revenue of the company has been as a result of entrants of other construction and engineering companies. There is also a decline of backlog of projects, reducing the company revenues. III. OPPORTUNITIES a) Nuclear power business Bechtel Corporation has found opportunities in nuclear power business. This will see the company boost its revenues and enhance its operations. b) Increasing energy demand in North America Of late there has been an increasing demand of energy in North America, which has seen the company engage in energy provision service in this region. This is an opportunity that will see the company venture in energy provision service boosting income. c) Rise in demand for Civil Infrastructures Globally Developing countries are seeking to enhance their infrastructure such as roads, energy plants and subways. This is an opportunity that Bechtel can capitalize. IV. THREATS a) Stringent regulation Engineering and construction industry is characterized by rigorous rules, laws and regulations from the federal government. Sometimes this regulations affect operations of the business affecting revenues. b) Cost overruns Cost overrun is the actual amount that exceeds the estimated, target or budgeted cost. Though the competitive advantage of the corporation is project management the company experiences cost overrun from time to time. Cost overrun is a great threat to the company since it reduces revenues to great levels. c) Shrinking supply of skilled craft professionals The education system around the globe has seen a reduction in training of craft professionals. It will be very unfortunate in the foreseeable future since the company won’t find the necessary professions to assist in the operations of the business. References Cadle, J., Paul, D. and Turner, P. (2010), Business Analysis Techniques, 72 Essential Tools for Success, BSC The Chartered Institute for IT. Johnson, G., Whittington, R. and Scholes, K. (2009), Exploring Corporate Strategy with MyStategyLab, Financial Times/Prentice Hall. Kotler, P., Keller, K.L., Brady, M., Goodman, M., and Hansen, T. (2009), Marketing Management, Pearson Education.