Strategic planning in construction companies

Strategic planning is an essential function of senior management in any business firm. Planning involves the firm's behavior in a competitive market and adaptation of the company's resources towards the selected market strategy. This paper presents a methodological procedure for strategic planning in a construction company. This procedure consists of the following stages. First, examine the company's mission. The mission reflects the owners' views with regard to the company's scope of activities and objectives. Second, survey the company's business environment. The environment includes both general economic factors that affect all types of business activity and additional factors, specific to the construction sector. This survey should reveal the specific "packages" of prospective project opportunities and highlight potential threats to a company's orderly activity. Third, analyze the company's main resources. The main resources in this respect include the construction capacity, the procurement system, the marketing system, the organization, personnel, finances, and knowledge. The relative strengths and weaknesses of each resource, in light of market needs, are identified. Fourth, develop a strategy. The development of a strategy is based on "mapping" of the relative attractiveness of the various possible activity areas. This strategy can follow one of several generic types that must be adapted to particular conditions of the market and company. It affects the subsequent choice of a strategy for development of the company's own resources. The choice of the optimal strategy, from several available alternatives, should follow a careful analysis of the costs and benefits inherent in the implementation of each.