OB 2020/The story of the Competition

Early Years
Period 5
Period 6


PERIOD 5:  "'Clatt Construct UK' are the early pacesetters!"

After a period of intensive trialling the Oxford Brookes University Enginuity 2020 Competition is underway, with a competitive field of 12 teams all battling for supremacy against their peers. And so to the early action, and the pacesetters after impressive 37% growth are "Clatt Construct UK" with 1,366 pts. However, the early leaders cannot rest on their laurels with "Corona & Crew" only 4 points behind in second place, with "Forefront Construction" and "Part time construction" in 3rd and 4th also close on the heels of the pacesetters. It is early days, and there are sure to be plenty of twists in the weeks ahead as the journey through the Early Years unfolds.

The early signs are that the competition will be very competitive, with all the teams improving their overall position in period 5. However, this was not unexpected. After being formed at the beginning of period 1, overhead costs were incurred whilst the companies were being established, without any profits being generated. The companies were now in a position to generate profits against a more stable overhead base, and this was reflected in improved operating profits. Of course, growth will be impossible without an effective strategy, and all the management teams have had time to think about this carefully, and come up with a set of objectives to deliver business success for their stakeholders.

Looking in more detail at the world economies, 2019 saw some dramatic economic and political changes in the UK. Prime Minister Theresa May's Brexit deal was rejected several times by Parliament, and the UK did not exit the European Union as originally planned at the end of March. Theresa May then resigned, and Boris Johnson became the new PM, and promised to secure Brexit by the end of October, but his minority government's new Brexit deal was also thwarted. However, a majority victory in the General Election on December 12 for the Conservative Party opened the door for the UK to finally leave the European Union at the end of January 2020.
UK economic growth remained modest at 1.4% in 2019, with a projected long-term rate of around 2% providing that there is an orderly exit from the European Union. Consumer spending has continued to drive the economy, but the housing market has cooled and job creation is likely to slow during 2020, and business investment has been on a declining trend as a result of ongoing Brexit-related uncertainty and this is expected to continue until this is resolved. For the UK construction market uncertain times lie ahead, and growth will be hard earned.

Further afield, and unlike the UK, the Global economy grew quicker during 2019, at 3%, with 3.4% expected in 2020, However, the steady pace of expansion in the global economy masks an increase in downside risks that could potentially exacerbate development challenges in many parts of the world, according to the World Economic Situation and Prospects 2019.
The global economy is facing a confluence of risks, which could severely disrupt economic activity and inflict significant damage on longer-term development prospects. These risks include an escalation of trade disputes, an abrupt tightening of global financial conditions, and intensifying climate risks.

League table at the end of period 5




PERIOD 6:  "A turbulent quarter sees new leaders, and a lot of changes"

After the impressive growth figures posted in period 5, not unexpectedly period 6 proved to be a much tougher quarter. This was largely driven by the companies being unable to win as much work as they had previously, with the corresponding reduction in forward workload and margin KPIs. The result was that growth figures were down almost across the board. However, those that were able to post positive growth figures made substantial gains.

Most notably "Buildability" stunned their rivals as they posted the best performance in the quarter, 10% growth that enabled them to storm through the field with an incredible 10-place gain that enabled them to open up a 33-point lead at the top of the table with 1,405 pts. "Forefront Construction" moved up on place to 2nd as previous leaders "Clatt Construct UK" dropped back one place to 3rd. At the wrong end of the table the shareholders of "Meow Meow" will not be purring after labour scheduling problems on the completion of a key transport contract in South Africa saw their profitability take a major hit, and they will be working hard not to repeat the error in future periods. Business is often a roller coaster ride, learning from both successes and failures, and every management team will be looking closely at the decisions made in period 6 to make effective ones in the next round.

With KPI points hard earned it will become increasingly important that the management teams look very carefully at every aspect of their business for potential improvements, and those that are most successful in doing so should prosper the most. Two areas that the teams need particular attention are Marketing strategy and Procurement (rival bidders), which are discussed in more detail below.

Marketing is possibly the area of the business that requires the most thought, as there are numerous strategies that could be adopted. The market trend can only be gauged for one year ahead, and not always accurately, and as marketing departments are expanded, the choices of where to direct the marketing effort are wide ranging, by sector, country and job size. The task is not an easy one, but has a major impact upon procurement options, and the future work undertaken, and ultimately on the long term prosperity of the company.

Another important consideration is that rival bidders do not necessarily stick with the same bidding strategy, and as time goes by they can change their strategy according to market conditions. This makes it imperative that teams keep a close eye on the margins rival bidders are applying, and how they may be changing. Evaluating these strategies could make the key difference between success in securing work, or not. To complicate matters even further there may be UNKNOWN rival bidders, and the only clues to these may be in the ENGINUITY NEWS NETWORK (ENN) for the period.

League table at the end of period 6
Improvements, or otherwise, during period 6