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Sterling Construction Case Study

Sterling Construction Case Report

Introduction
Starling Construction is one of the leading companies operating in the US market focusing on the construction of transportation and water infrastructure. It should be pointed out that the company is quite experienced and is well-known in the US since it has been founded in 1954 and gradually it gained the recognition and popularity among its customers. At the same time, the company operates nationwide and among its customers it is possible to name not only private company but also federal and local authorities which amply use the company’s products and services to develop their transportation systems and infrastructure.

In this respect, it is worthy of mention that the role of the state is extremely important for the stable work of the company since it is the state on both federal and local levels that is the major customer of the company. On the other hand, the need in the improvement of the transportation system of the US on all levels and growing water infrastructure opens ample opportunities for the further progress and development of Sterling Construction.

In such a situation, it is quite logical that the company is mainly focused on the US market and, at the present moment, it is a company that operates nationwide occupying the leading position in the national market. Its market value is 234.50 million US dollars.

The main products and services the company provides to its customers are the construction of highways, bridges, roads, and light railways. In fact, this is a traditional sphere where Sterling Construction provides its products and services, but, the company keeps progressing and nowadays the company is also focused on the construction of waterways and water infrastructure. On the other hand, the construction and reconstruction of highways, roads, bridges and light railways still remains among the main priorities of the company. It is necessary to underline that it is due to this specialization the company has managed to achieve positive results in its development and take one of the leading positions in the national market, while the development of waterways and water infrastructure is currently considered to be just a perspective direction in the further development of the company.

Also, it is worthy of mention that the company operates on the federal and local level. At this point, it should be said that the company demonstrates its flexibility since it is capable to work on different projects with equal success. What is meant here is the fact that the fulfillment of federal and local orders implies different volume of works the company should make. Even though the work on the federal level provides the company with long-term orders that implies stable functioning of the company, the work on the local level is also very important because it provides Sterling Construction with ample opportunities to fulfill short-term orders improving the quality of services and applying new technologies since the period of construction on the local level is traditionally shorter than on the federal one. As a result, the plans of construction on the local level are more susceptible to the implementation of new technologies since it is not always possible to change the technology of construction of a project that is supposed to last for several years, for instance, if it has already been started. In such a way, due to the work on the local level the company can implement more progressive technologies extrapolating them on the federal level. By the way, the implementation of innovations and new technologies is one of the major conditions of the market success of the company.

Nevertheless, the company still remains a reliable contractor serving public customers, including county and municipal public works departments, regional transit authorities, port authorities, school districts, and municipal utility districts.

SWOT analysis
In order to better understand the perspectives of the company in the market and objectively assess its current position, it is necessary to conduct SWOT analysis which can reveal the major problems and successes of the company as well as it will expose the main threats the company can potentially face as well as assess its perspectives. In such a way, due to the use of SWOT analysis, it will be possible to critically evaluate the position of Sterling Construction in the market and assess its perspectives.

First of all, it is necessary to dwell upon the major strengths of the company. In this respect, it should be said that Sterling Construction is one of the leaders of the national market. In other words, the company has a well-developed infrastructure and, what is probably even more important, its units cooperate effectively. In fact, the well-developed infrastructure is one of the major conditions of the general success of the company in the national market because it provides ample opportunities to develop the links between its units increasing the effectiveness of their work. What is meant here is the fact that the company can provide services nationwide that may be very convenient for its customers which perceive the company as a reliable and responsible partner

Furthermore, the company is also characterized by the good corporate culture which is also very significant and may be viewed as one of the major contributors to the successful functioning of the company in the national market. In fact, the good corporate culture implies the existence of certain traditions within the company that help maintain positive relationships between members of a team, which the entire company actually is. As a result, employees of the company feel that they are a part of large company and that their work is significant.

At the same time, the good corporate culture considerably contributes to the high level of productivity and effectiveness of the company. This means that Sterling Construction’s employees are well-qualified professionals who are able to work really effectively and the productivity of the company steadily growth. It is worthy of mention that the latter is, to a significant extent, determined by the implementation of innovative technologies into the productive process, which facilitates the work of employees and increases its effectiveness.

On the other hand, it is quite natural that the company has certain weaknesses, which effects should be possibly minimized in order to maintain the good performance of the company in a long-run. As for weaknesses of Sterling Construction, it is primarily possible to single out the trend to the authoritarian management style. Even though, in recent years the company has started to implement democratic and even liberal management style, it is still quite often tends to establish a high level of control and coordination of work of its units with the administration of the company and its top managers. Obviously, such management style slows the speed of operations within the company consistently, since its units, situated in different parts of the US, are practically deprived of autonomy and are subordinated to the headquarter of the company and, as a rule, practically all important decisions within the company are taken by its headquarter situated in Houston. Naturally, such a trend produces a negative impact on the development of the company, though, at the same time, it also implies the high level of control over operations of all units of the company.

Another significant weakness of the company is the lack of an effective system of training of the personnel within the company. In the modern economic situation, it is obvious that the company needs to prepare well-qualified professionals but, in the case of Sterling Construction, the company often uses external sources to maintain the high level of employees working at the company. In fact, such a situation exposes the company to certain risks of loosing well-qualified personnel but, at the moment, Sterling Construction manages to maintain the high level of professionalism of its employees and attempt to implement new, effective systems of training within the company.

In such a way, the general situation within the company is stable and basically may be assessed as positive, regardless certain weaknesses Sterling Construction faces. However, in the current economic situation, external factors may be not less or even more significant than internal one for the normal development and prosperity of the company. In this respect, it is necessary to dwell upon threats and opportunities of the company.

Speaking about the opportunities of Sterling Construction, it is possible to underline that the company has a good perspective of the enlargement of its market. In fact, traditionally, the company operated on the national market solely but, in the current situation when economies of different countries grow more and more integrated, it is quite probable that the company may initiate an attempt to enter a foreign market. In this respect, it is worthy of noting the market of Canada, or Mexico, for instance, which are geographically close to the US, while there is practically no frontiers between this countries. In practice, this means that financial barriers for entering these markets for Sterling Construction are minimal, while, taking into consideration its experience in the US and positive brand image, the company can successfully enter the markets of Canada or Mexico or both.

By the way, the positive brand image opens larger opportunities for the company in the market because it contributes to the higher level of customer experience and customer loyalty. This means that customers will prefer the services and product of Sterling Construction, instead of any other, less known or less respectable company.

On the other hand, it is necessary to remember about various threats the company may face. Firstly, it should be said that the competition in the national market is steadily growing and the position of the company naturally not monopolistic. Consequently, there is a real threat of gradual loss of the leading positions of the company, in case its competitors keep progressing faster than Sterling Construction. The latter is quite probable, taking into consideration another threat, the threat of the saturation of the market. This means that the need in the construction of new highways, bridges, roads, etc. gradually decreases as the national infrastructure develops. Consequently, the competition in this industry grows stronger.

Furthermore, it is also necessary to point out that the orientation on the national market may be a threat to the future of the company since, in the case of a multinational company entering the US market the position of Sterling Construction can deteriorate considerably, while, in contrast, if the company expands its markets, its position in the US will, in all probability, strengthen.

Strategies
Finally, it is necessary to focus on the strategies applied by the company. In this respect it is primarily necessary to point out that the company basically uses diversification strategy. To put it more precisely, it has been already mentioned above that the company was traditionally oriented on the construction and reconstruction of highways, roads, light railways, and bridges, while in recent years the company attempts to offer larger services to its customers developing the construction of waterways and water infrastructure. In such a way, the company diversifies its production and services.

At the same time, it is also worthy of mention that the company attempts to gain the advantages position compared to its major competitors by means of implementing the low cost strategies. In actuality, the company attempts to decrease the expanses and provide the products and services of higher quality compared to its competitors. This strategy is basically realized by means of possible reduction of costs and, what is even more widely spread, by the implementation of new technologies which help the company to reduce expanses consistently and save costs for the more effective production making the price of its products and services lower than it could have been, if traditional methods and technologies were applied.

In such a way, on applying these strategies the company manages to maintain its leading position in the market, which is nowadays quite god. Naturally, there are certain weaknesses and threats to Sterling Construction but its strengths and perspectives seem to be quite good to preserve the leading position of the company in the national market.

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