Strategy Management

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Strategy management in construction
Creating a new development strategy for Skanska|

Department: Civil Engineering
Lecturer: Ms. Rebecca Allan
Student Number: 510119
Course: MSc. Construction Project Management

Date of Submission: May 11, 2011

Table of Contents
1.Introduction3
1.1.Mission statement3
1.2.Vision in 20153
1.3.Financial status in 20104
2.Challenges5
2.1.Recession economic5
2.2.Oil crisis5
2.3.Human resource6
3.Opportunities6
3.1.New market6
3.2.Making brand Skanska stronger7
3.3.Developing in green building8
4.Strategic alternatives8
4.1.Expand market to new potential areas9
4.2.Human resources10
4.3.Cooperate with rivals10
5.Recommendation11
6.Bibliography12
7.Appendix14
7.1.Appendix I: Five Force analysis on Skanska14
7.2.Appendix II: SWOT analysis on Skanska16
7.3.Appendix III: PESTLE analysis on Skanska17

1. Introduction
Skanska was established in 1887 by Aktiebolaget Skånska Cementgjuteriet in Sweden. Nowadays, Skanska has since become one of the biggest construction companies in the world (Top 100 construction Companies 2010). The employees force was estimated at 55,000 in 2010 and - Skanska is active in many construction fields e.g. homes; commercial properties; public private partnership, so on. 2.1. Mission statement

“Our mission is to develop, build and maintain the physical environment for living, travelling and working.” (Skanska). 2.2. Vision in 2015
“Skanska shall be a leader in its home markets - the customer's first choice - in construction and project development.” (Skanska). Skanska put forward their vision to 2015 as below: * “In Construction, we have grown faster than the market, with strong capital efficiency and best-in-class operating margins. * Project Development is a bigger part of our business; we have reinforced our presence in existing regions, and entered new ones. * We are a recognized market leader in Safety with an LTAR of 1.0. * We are recognized as a role model in Ethics.

* We are recognized as a leader in People Development.
* We are a recognized market leader in Green.
* Our increased focus on opportunities is coupled with world-class Risk Management.” (Skanska, Our strategy - Profitable Growth, 2010)

2.3. Financial status in 2010
Income statements, SEK M| 2010| 2009| 2008| 2007| 2006| Revenue| 122,224| 139,124| 143,674| 138,781| 125,603| Cost of sales| -109,774| -125,417| -131,532| -125,807| -114,220| Gross income| 12,450| 13,707| 12,142| 12,974| 11,383| Selling and administrative expenses| -7,533| -8,078| -8,932| -7,970| -6,985| Income from joint ventures and associated companies| 541| 404| 876| 402| 364| Operating income| 5,428| 6,033| 4,086| 5,406| 4,762|

Net financial items| -35| -233| 324| 261| 223|
Income after financial items| 5,423| 5,800| 4,410| 5,667| 4,985| Taxes| -1,395| -1,579| -1,253| -1,546| -1,330|
Profit for the year| 4,028| 4,221| 3,157| 4,121| 3,665| Profit for the year attributable to| | | | | |
Equity holders| 4,022| 4,216| 3,102| 4,096| 3,635|
Minority interest| 6| 5| 55| 25| 20|
Earnings per share, SEK| | | | | |
after repurchases| 9.76| 10,16| 7.44| 9.78| 8.68|
after repurchases and dilution| 9.66| 10,12| 7.42| 9.77| 8.68| Average number of shares outstanding| | | | | |
after repurchases| 412,229,351| 415,059,131| 416,985,073| 418,553,072| 418,553,072| after repurchases and dilution| 416,448,523| 416,743,454| 417,851,397| 418,992,099| 418,827,470|

Figure 1. Five-year Group financial summary (Skanska, Income statements). (EUR 1 = SEK 8.9382 (ECB, 2011) As can be seen from Figure 1 above, Skanska has huge consistent yearly revenue. The gross income in five years is more than 10,000 million SEK. Overall, Skanska is...
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