Investing in new plant

Description

You work for a subcontracting firm specialised in sourcing and placing steel reinforcement, for example, within reinforced concrete construction, on site. The company has experience of building and civil engineering projects, where steel reinforcing bars, meshes and cages are required. It has good contacts with its own suppliers, i.e. steel producers and reinforcement fabricators, in the UK and elsewhere. It also holds unique capabilities and experience in building the protective shells where nuclear reactors and associated nuclear reaction processes take place. The company’s board has tasked you with formulating the company’s strategy for the next three years. Along with this strategic remit, the board particularly wants you to consider two specific aspects, as follows:

1. Engagement with main contractors Would you recommend alignment with a limited number of major contractors, or should the company build relationships at tender stage, as and when tenders come in? Should the company wait until a main contractor approaches it, rather than be pro-active? As part of your answer, consider the ethical, relational and technical integration issues of any type of strategic alignment with a main contractor.

2. Investing in new plant

Investment in the latest technology could improve the competitiveness of the firm. The board has noticed that reinforcement fabricators have up to date automated production. Should the company extend its operations to include fabrication, or are there other ways to update its technology? The board is interested in understanding all the implications of such investment, both positives and negatives. In your answer, pay particular attention to the economic/commercial and technical issues.

 

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