A business strategy for construction materials modern trade : case of small-to-medium sized company

Abstract

The main purpose of this research is to formulate a business strategy for small-to-medium sized construction materials modern trade that operates in a competitive situation. The research is conducted by performing internal and external analysis to gain an understanding of the current market situation. For internal analysis, this research uses data from customer questionnaire survey and interviewing the company’s managing people. For external analysis, Porter’s five competitive forces framework and PESTEL analysis are utilized. The company’s SWOT and key success factors then can be derived from the information in order to form the marketing concept. The marketing strategy is then formulated from the concept, consisting of business model for the strategic dimension and action plan for the operative dimension. Situation analysis found that despite its being complimented of good product and service, the case study modern trade is unable to compete in the construction material price war. However, since its own line of all wood furniture production has no competition and sells well and its competitors offer narrower scope of design jobs, the strategic solution has been reached. The business decides to differentiate itself by focusing instead on providing furniture products and design works. The business model is then constructed based on the new value propositions of lifestyle, good product and service quality and customer co-creation/customization. The validation of the n model exercises the comparison between the old and the new model. The business model framework, selected as most appropriate, provides the framework of nine elements as aspects to be necessarily considered for a business model. By putting the old model into the same framework, it is found that the old framework has inconsistencies of value propositions against some of the key elements. This is due to the company failing to see the clear picture of the business, which results in unsystematic model as opposed to the new systematic one.