PORT 2020D/The story of the Competition
|Early Years||Later Years|
|PERIOD 5: "'MKK' make the early running"|
After a period of intensive trialling the University of Portsmouth (Distance Learning) Enginuity 2020 Competition is underway, with a competitive field of teams all battling for supremacy against their peers. And so to the early action, and the pacesetters after impressive 32% growth are "MKK" with 1,324 pts. However, the early leaders cannot rest on their laurels with the "RCX Group" and "Four Port" close on their heels. 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 unexpect ed. 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.
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.
|PERIOD 6: "A tough quarter see 'MKK' hold onto top spot, but only just!"|
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 for 5 of the 8 teams. However, those that were able to post positive growth figures made substantial gains.
Most notably "Gosport Construction" outperformed all their rivals to move 3 places up the table with 7% growth, closely followed by "Portsea Building" with a 6% improvement. At the top of the table all three of the leading teams declined slightly, but it enabled "MKK" to hold onto top spot with 1,305 pts, but they are under intense pressure from "Four Port", who moved up one place and to within just 5 points of the leaders, with the "RCX Group" only 4 points further back despite dropping one place. With just 9 points separating the leading three teams one good or bad decision can make a huge difference to a team's fortunes.
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.
|PERIOD 7: "Growth across the board, and all change at the top!"|
Period 7 reflected the turbulence and uncertainty of the real world as previous leaders "MKK" fell four places to 5th despite 2% growth as they were outperformed by the chasing pack. In particular "Four Port" continued their systematic rise up the table, from 3rd to 2nd and now to top spot with 1,451 pts after 12% growth, and they have opened up a significant 76 point gap at this stage to "Gosport Construction" in second. In third are "Southsea Power Enterprises", who achieved the rare double of posting the best results in the quarter, an eye catching 17% growth, and making the biggest rise up the table, climbing 4 places.
The next period is the last one of the Early Years, and a crucial one for all the teams as they have one last round to strengthen their business before they enter the unpredicatabilty of the Later Years that lie ahead, and every decision needs to be carefully considered.
IEWP = SUCCESS
A leading industry think tank have come up with a simple formula for running a successful construction business.
Another essential part of running a successful business is being able to form an effective Risk Management Strategy to keep the business as profitable as possible. This can take a number of forms, firstly by building sensible risk contingencies into the original bids based upon the likelihood and cost of the risks occurring. Secondly, and just as importantly is mitigating the affects of any risks that strike through targeted investment into risk management companies, using a BIM model if available, and employing the most suitable project managers to jobs in progress. However, even when these mitigating actions are taken, risk can still be costly to job and company profits, and during period 7 problems with site access isssues affected the erection of new onshore wind turbines for the client, First Wind USA, near Palm Springs, California, with an estimated risk cost of nearly 290k before mitigation.
|PERIOD 8: "'RCX' make a dramatic move as UNKNOWN bidders wreak havoc for many"|
Period 8 saw major turbulence amongst many of the teams as a number of teams struggled to win new work, with UNKNOWN rival bidders such as The Crayford Road Group and Sharami International undercutting them, and those who put all their eggs in one basket by bidding for just a few jobs suffered the most.
However, there were some success stories, and most notably the "RCX Group" turned the Competition on its head after a stunning 14% improvement, by far the best in the quarter, saw them surge 6 places up the table to become the new leaders with 1,503 pts, and they have ended the Early Years with a massive 133 point lead over their rivals, but that can easily be wiped away as the teams now enter the unpredictability of the second stage of the competition, known as the later years, when they go 'head to head' in direct competition against each other for work. Watch this space to see the outcome!
The chasing pack to the new leaders are led by previous leaders "Four Port", who were one of the teams to succumb to unknown bidders as they lost out on some key bids, with "Gosport Construction" just 7 points further back. 6 of the 8 teams posted deteriorating results, and none more strikingly than the leaders from periods 5 and 6, "MKK", who now prop up the table after a 15% and 3-place fall. The Competition really is reflecting the ups and downs that can occur in the real world being simulated.
Running a successful construction business requires effective internal decisions to be made, such as bidding competitively to win new work, and progressing jobs as profitably as possible. However, external economic, political and environmental WORLD EVENTS can also impact upon the business. Clues to some of the events, but not necessarly all of them, are reported in the ENGINUITY NEWS NETWORK (ENN) each period, and close examination of this valuable new source may influence the current and future strategy of the business.
|PERIOD 9: "The 'RCX Group' extend their lead despite the increased Competition for work"|
The teams are now in the second stage of the competition, known as the later years, when they go 'head to head' in direct competition against each other. With the increased level of competition for new work in the later years, each company needs a successful procurement strategy, and the effectiveness of the decisions and strategies taken in the early years are put to the test. In particular, the marketing decisions assume added significance, and a company can obtain a competitive advantage by finding niche markets, and building strong client relationships to gain repeat business when price is not the only deciding factor in tender awards.
Despite the increased competition for work, period 9 saw mixed results, with as many success stories as there were disappointments. At the top of the table the "RCX Group" extended their lead to over 200 points, and also became the first team this year to retain pole position with 1,621 pts after another solid 8% growth, helped largely by 3 new contract awards, all of which were secured with superior client relationships to their rivals after close bidding, further demonstrating the valuew of good cliuent relationships at this stage.
Behind the leaders "Southsea Power Enterprises" moved up 3 places to second, and "Portsea Building" climbed one place to 3rd. Further down the table "MKK" posted the best results in the quarter, an impressive 12% improvement that saw them move away from the foot of the table, the key to their success being the award of a massive 23m contract with South Wales County Council. However, there were a number of casualties due to the increased competition for work with two teams failing to secure any new work, and they will need to adapt quickly to the intensified bidding, as well making sure their marketing department is well equipped and staffed to identify more jobs in order to give themselves more bidding opportunities. However, no-one should despair at this stage as the only certainty in these uncertain times is that there will be a lot more volatility in the league table in the remaining 2 rounds. Watch this space!
|PERIOD 10: "'Four Port' make their move, but is it too late ?"|
The penultimate round of the competition saw some growth for all but one team. The most significant move was made by the leaders from period 7, "Four Port", whose 10% growth, built on securing an incredible 5 new contract awards, moved them up two places to second, but have they left it just too late to catch the leaders. Despite not growing in the quarter, the "RCX Group" held onto a substantial 160 point lead with 1,628 pts, and it would take a brave person now to bet against them becoming this year's champions.
At the wrong end of the table it was a great round for the "Bimmers", who recovered in some style from a poor previous quarter by posting the best results, an impressive 13% improvement that lifted them up two places and off the foot of the table. Their success was helped in no small way by winning 28m of new work, with all 4 contracts won becauseuase of their superior client relationships to their rival bidders, showing how important client relationships are at this stage of the competition.
|PERIOD 11: "Veni, vidi, vici!"|
"I Came, I Saw, I Conquered". Way back in history, Julius Caesar's sent those famous words in a message back to the Roman Senate in recognition of an overwhelming victory. And so it was for the "RCX Group", who extended their lead at the top of the table in the final round to nearly 400 points, with 13% growth, to deservedly become the University of Portsmouth Enginuity 2020 Champions with an impressive finishing score of 1,839 pts, and their success owed much to them demonstrating one of the guiding principles in running a successful business, consistency, as they had led the Competition since period 8.
Behind the Champions, it was a lot tighter, with "Four Port" holding onto the Runners Up spot, despite being pushed hard by "Portsea Building", with "Southsea Power Enterprises" only 3 points further back in 4th. There was just 160 points separating all the teams apart from the Champions, showing how closely matched the teams were.
In the final analysis every team finished with stronger, more sustainable companies than when they took over in period 5, a testament to the skill and application shown by the management teams in what was a roller coaster of a journey through nearly 2 simulated years of management.