Your assignment is to research and analyze the strategies of two or, better yet, three competing organizations within an industry and/or market and to assess their relative strategic prospects over...

Competitor Analysis- Construction Infrastructure
Competitor Analysis-
Construction Infrastructure
U n i v e r s i t y
C o u r s e
P r o f e s s o r
D a t e
Name
1

Contents
Introduction ................................................................................................................................................... 2
Industry Overview ........................................................................................................................................ 2
Major Players ................................................................................................................................................ 6
Competitor Analysis ..................................................................................................................................... 6
Michael Porter’s Four-Corner analysis ................................................................................................. 7
Company-1: Larsen and Toubro ............................................................................................................... 9
Company-2 Punj Lloyd ........................................................................................................................... 11
Company-3 Hindustan Construction ....................................................................................................... 13
Recommendations-competitive and corporate actions ................................................................................ 15
References ................................................................................................................................................... 17
2

Introduction
Infrastructure construction is the most vital industry for the growth of the country and economy
of India, the importance of which has been realized by all the stakeholders in the country.
According to the Twelfth Five Year Plan, infrastructure industry will attract US$1 trillion to
India. This will not only impact the industry positively but also result I increase of job creation,
although the industry grapples with the availability of the skills, raw materials and financial
resources. Construction Industry Development Council (CIDC) along with the construction
industry has taken many initiatives to develop the sector through skill development, green
ratings, productivity development, quality assurance, grading, benchmarking, creating databases,
tool development, conducting research, risk mitigation methods, effective disagreement, making
products and forums for industry to interact and reach to the solutions to a common ground.
Industry Overview
Indian economy boasts of the second largest growing economy in the world and the construction
industry is an integral part of the development process which is due to industrialization,
economic development, urbanization, rising expectations of the citizens and rapid growth in
purchasing power parity of the Indian people. The construction industry serves as a basis for the
overall growth and development of the country and conduit for growth on account of
industrialization, urbanization, economic development and people's rising expectations for
improved quality of living. Construction is a second largest industry after agriculture in India and
accounts for approximately sixty five percent of the investment done in infrastructure by the
government and private companies. Contribution of construction industry to the GDP of India is
around eleven per cent. The foreign direct investment has been moving upwards in the sector
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with the growing opportunities in the sector and the construction industry received a FDI of USD
216.53 million in the present fiscal year.
In most cities, residential launches will boost the construction sector in Indian in 2013 although
south India will see a decline in new launches as there will be very less launches in Bangalore
and Chennai as compared to the 2012. According to a report on Indian construction industry
2013 forecasts, most of the metro cities will contribute towards ,most of the growth, around 74-
76 % in the in 2013 owing to the absorption in commercial projects. Big investments were seen
in commercial space mainly in Bangalore, Delhi NCR and Mumbai in real estate in 2013. Most
of the NRI investments are also to be seen in year 2013 in commercial space arena. This is
because of the fact that they can leverage the currency exchange are advantage and the real estate
price values are still fifteen to twenty five per cent under their 2007-2008 peak levels. New
organized retail projects will be completed and the growth will be seen at 109 % year on year
basis in cities of Kolkata, Pune, Hyderabad and Pune. This cities will be the major contributors
to the increase with the fifty three percent of total share of the country’s overall retail space
supply in 2013.
SWOT Analysis on Construction Industries in India
Strengths
 The sector is one among the largest employment generation sectors in the country with
many training opportunities in the field.
 There has been humongous potential in the housing and commercial building space of
multi building projects on feasible locations in the country
 The national network facilitates the boom of construction industry.
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 India has large amount of low cost skilled labor which make the sector very cost effective
and profitable.
 Indian has sufficient availability of natural resources and required materials for the
construction.
Weakness
 The physical distances between the construction projects reduce the business efficiency
for the construction companies
 Training and equipment incurs large cost and that is a challenge for new entrants.
 Dynamic nature of the industry makes the requirements ever changing and ageing
workforce may emphasize the skills gap.
 Long term career growth plan is highly required to attract talent and retain the workforce.
 There is a huge competition in allocation of large contracts among government projects.
 There are no clear laid out defined processes and procedures for construction and its
management.
 The initial investment required are large as compared to other industries which makes it a
capital intensive industry.
Opportunities
 The private sector housing boom will create lot of construction projects opportunities in
the country.
 The projects will become profitable in future with Public Private Partnerships in many
construction projects.
 The supply chain is becoming robust through involvement in large projects for the
industry.
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 The new projects using renewable sources of energy will offer opportunities to develop
the capacity and skills in newer markets.
 Training can be made available by more flexible delivery methods that are now available.
 The loan, income growth and insurance sector development makes solid support to the
investment in the construction projects.
Threats
 The market is uncertain and instable which may prevent the opportunities and expansion
of the construction sector.
 The economic scenario in the west influences the investment form the NRI segment
which is the major contributor to the construction sector
 The security conditions and political scenario conditions in the region and the
enforcement of the late legislative measures are threat to the growth of the industry.
Political and security conditions in the region and Late legislative enforcement measures
 The infrastructure safety is difficult to maintain which poses a risk of security to the
investors.
 There is a lack of political will and support for development of the new strategies.
 The natural calamities such as floods and earthquakes pose a much larger threat to the
construction boom.
 The inefficiencies in the planning and infrastructure pose threat to the infrastructure.
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Industry Segments
REAL ESTATE: Residential, Industrial, Corporate, and Commercial
INFRASTRUCTURE: Roads, Railways, Urban infrastructure, Ports, Airports, Power
Major Players
1. Larsen &Toubro Ltd
2. Punj Lloyd Group
3. Jaiprakash Associates Ltd
4. Lanco Infratech Limited
5. Nagarjuna Construction Company
6. IVRCL Infrastructures & Projects Ltd
7. Simplex Infrastructures Ltd
8. GMR Group
9. Gammon India...