In this report, study has been conducted to evaluate the internal and external business functioning which would be required to implement to start up new construction business. The new construction business company name would be ABDOCAK construction private limited. It is a limited liability partnership company which is incorporated with a view to earn profit and satisfy clients demand and need. This report reflects the key understanding on the opportunities, threats and other concerns which an entrepreneur face while running construction business in Australia.
ABDOCAK construction private limited is start up business in which only 10 members are making joint efforts to accomplish set objectives and goals. Company has followed proper centralised functioning in which all the decisions and strategies will be formulated by promoters and key managerial persons. However, employees who are indulged in labour activities will be accustomed to act as per the directions and instructions given by line managers. It is further observed that if top management department will indulged in formulating the strategies and implementation work will be done by the other line managers and managers of functional department. However, company has planned to enhance its value chain activities within 5 years by decentralised functioning (Brush, Greene, & Hart, 2011).
ABDOCAK construction private limited is has vision to successfully delivering projects across Australia.
It has mission to customize its value chain activities as per the wants and needs of clients in market.
External and internal environmental forces
Company has environmental forces which provide various threats to organizations. However, with the increasing ramification of economic changes and increasing demand of clients, company has been coming up with different strategic planning and methods such as customizing its plots and construction as per the clients demand and needs (Cooke & Williams, 2013). In addition to this, Australian government has increased tariff and traits on the constructions works which not only increase the overall cost of constructions but also reduce the overall profit of company. Nonetheless, the major problem in construction work is related to hiring talented architect in Australia. Company has started up its new business and for the better and effective quality of servicers company has to take assistance from the experienced architect who could provide their best professional services to other employees in the organization. In addition to this, there are several rules and regulations such as workmen compensation act, provisions and laws of real estate act and other corporate laws which should be complied by the company otherwise it may result to heavy imposition of penalties on the company (Bryman, & Bell, 2015). Nonetheless, other issue which ABDOCAK construction private limited could face is related to management of finance. It is true to say that company has to manage its sources of finance with a view to reduce the overall cost of capital of company (Sakas, Vlachos & Nasiopoulos, 2014). For instance, ABDOCAK construction private limited could raise its finance from various sources such as issue of initial public offer, debts funds and private equity funds. Management department should implement capital budgeting tool to reduce the overall cost of capital of company. However, external business environment forces could be evaluated on the basis of PESTLE analysis.
Political situation in Australia is very stable. It will enable company to come up with effective investment strategies and on the basis of stable political factors. However, company could make strategic alliance with other organizations for enhancing its value chain activities in Australia in real estate construction business.
This factors provide that economic conditions and other applicable environmental laws and regulations. ABDOCAK construction private limited needs to evaluate the level of carbon emission and other hazardous substance should be in accordance with the applicable carbon emission acts (M?ller & Parvinen, 2015).
It is related with the value, belief, culture and other choices of people living in Australia. People in Australia are less inclined towards associated cost of construction services and give more weightage to quality of constructions services. ABDOCAK construction private limited needs to provide best quality of constructions services to Australian people with a view to increase the overall market share (David, 2011)
This provides the applicable laws and regulations which needs to be complied by ABDOCAK construction private limited to run its business effectively. However, the penalties imposed due to non-compliance of applicable law may increase the overall construction cost of ABDOCAK construction private limited. There are several acts such as workmen compensation act, provisions and laws of real estate act and other corporate laws (Coates, 2016).
This factor will provide the purchasing power, interest parity rate and gross domestic product rate of Australia. It is evaluated that people in Australia has high purchasing power and more inclined towards availing quality of construction services. Therefore, company has to manage its business functioning in such a manner which will meet all the expectation of clients in Australia.
Risk that will faced by ABDOCAK construction private
There are several risk which will be faced by ABDOCAK construction private while running its construction business in Australia such as arrangement of finance, complexity of business, increased overall cost burden, fault in complying with the applicable rules and regulation of real estate act. In addition to this, if company fails to hire professional employees, architect and other labour then it will destruct the planned business strategies and result to failure to provide best quality services to clients. Another risk which ABDOCAK construction private could face is related to high competition from the rivals. If company fails to deliver its promise with the given time manner then it will not only destruct the brand image of company but also increase the overall cost of construction. There are several rivals such ADCO construction and Faltosy construction who are providing best possible construction services in Australia with a view to increase the their overall market share. It is further observed that if ABDOCAK construction private customized its construction services as per the demand and needs of clients then it will surely increase the overall turnover and profit.
Business practice of company
There are several business rivals in construction business such as ADCO construction and Faltosy construction who are following standard business practice in Australia. However, ABDOCAK construction private company needs to enter into strategic alliance with other business partners in Australia. This level of business practice will not only improve the business performance of company but also increase the overall brand image. However, company might face problem of finance arrangement for making payment of consideration for the strategic alliance. This level of strategic alliance will increase the overall productivity and quality of constructions services in Australia. Nonetheless, if company could also use other strategies such as SWOT analysis, PESTLE analysis and implement new SMART strategic functioning in its business practice to increase the effectiveness of business performance. However, people in Australia are more inclined towards constructing their own houses, apartment and building as per their choices and expectation. Therefore, ABDOCAK construction private company should make its value chain activities customized as per the client’s needs and demand in Australian market. Now in the end, it could be inferred that company should adopt following business practice such as customization of its construction services, implementation of new strategic plans and procedure, entering into strategic alliance with organizations and providing best quality of services at cheapest price to clients in Australia.
Important functions within ABDOCAK construction private company
The main important functions of ABDOCAK construction private is related to strategic planning of management department, hiring of experienced employees and architect, customization of value chain activities and investment of highly sophisticated machines and plants. If company could install highly developed machines then it will surely increase the efficiency of business and reduce the hard work of labours in construction process system. In addition to this, strategic alliance with other organizations may provide pool of talented employees, machines and set process system which could enhance the quality of constructions services provided by ABDOCAK construction private company to its clients (Horkoff, et al. 2014).In addition to this, use of high technology machines and experienced staffs in architecture work may also increase the quality of work and brand image of company. It could be used by company as important market factor in the promotional plan of company.
Now in the end, it could be inferred that if company could customized business functioning as per the client’s needs and demand in Australia then it will surely increase the overall turnover and brand image of company. ABDOCAK construction private company needs to implement all of its strategic plans in systematic manner after evaluating all the internal and external factors. However, business practice such as customization of its construction services, implementation of new strategic plans and procedure, entering into strategic alliance with organizations and providing best quality of services at cheapest price to clients in Australia will surely result to company’s overall all performance.
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