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Construction Business Strategy And Finance Question and Answer

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Construction Business Strategy And Finance

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Question 1

There were different reasons that were responsible for the failure of probuild. All of these reasons contributed in different ways to making probuild fail. These reasons are as follows.

Reduction of business chains

It is to be noted that use of the subcontractors is one of the most important & basic principles of work of a construction company. In this regard, the main thing that helps a company is the number of connections that Probuild has (Tezel et al. 2020). Moreover, the flexibility of the chain made by probuild with its subcontractors also determines the success of the business. Probuild that was considered here failed to do so. Hence, it lost its business chains. As a result of this probuild failed in its business.

The dominance of trade credit

Another important reason behind the failure of this company was the dominance of “trade-credit”. It can be seen that most construction companies tend to take more credits from their suppliers in advance. If it is seen that the project fails or the profit margin is very less then it becomes a problem. For this company also, the “trade credit” of this company increased very much that at a point in time, it was seen that a major part of the total expenses of probuild was formed by this trade credit.

Unsecured status of creditor

It was seen that there were different credits given by probuild that were unsecured in nature. It is to be noted that there are some clauses that should be involved in giving credit to a company. So, keeping this in mind the clauses of giving credit are determined. This company did not maintain a good creditor status (Rahmat et al. 2021). It can be noticed in the form that there were no fixed interests or charges applied to the provided interest by this company. This resulted in a huge loss for probuild.

Bad practices of payments

The success of a company depends on the type of payment made by a company to a large extent. In this case, also the process of payment also played a vital role. It can be seen that because of the delay in making payments to its subcontractors probuild ended up losing many of its subcontractors. Moreover, the process of making payments to its employees was also not so good that resulted in losing the trust of the employees in the company. So, because of the poor process of payment probuild witnessed failure.


In addition to this, another major reason behind the failure of this company was the underbidding committed by this company. It can be noticed that in this competitive market, one of the most famous strategies implemented by companies is to bid amounts as much as possible in a tendering process. In some case, the bid made by probuild becomes so less that probuild do not leave with any profit after completing the project (Marshal & Siahaan, 2021). In this case also for winning over its competitors, this company made many underbids. All of these resulted in making losses for this company.

Illegal phoenix activities

There are some activities that were not good ethically implemented by this company All of these also contributed to the failure of the probuild. Some of these activities are as follows. The first thing that it did was to transfer the assets of the probuild to one of the sister companies. This was done to reduce the amount of tax that was needed to be paid by probuild (Zone, 2021). As a result of this, the name of this company was involved with illegal activities. This contributed in making the reputation of probuild bad in the market.

Undercapitalized firms

At one point in time, it was seen that in this company there were fewer investments were seen. Because of this, this company was unable to take up big projects. As a result of this, the business of the company was limited to small projects only. This resulted in making the business of probuild to fail.

Lack of business management skills

Another reason for the failure of this company was the lack of management skills in the business. It was seen that the management of probuild failed to maintain a proper hierarchy of work within this organization (Banka et al. 2022). Also, the activities of this company along with its stakeholders were also not maintained well. All of these resulted in failing this company.

In addition to this, another thing that can be done is to make the relation between probuild and its employees good. It can be seen that the employees are the main asset for the success of a company. So, it is better to have a good relationship between probuild & its employees.

Question 2

This section holds information about the strategic and business plan for the failed company that should go in the next 5 years. The goal of this strategic plan is to provide a comprehensive plan for reviving a failing business over the next five years (Lei et al. 2020). By zeroing in on key regions like market examination, item/administration improvement, monetary rebuilding, client experience, and authoritative turn of events, the organization can recapture its strategic advantage and make long-haul progress. Various attributes of the strategic and business plan are given below.

Analysis of the Situation:

  1. Evaluate the current situation of the business, looking at its advantages, disadvantages, opportunities, and threats. Setting goals that are both specific and measurable and in line with the vision. For instance, expanding into new markets, boosting profitability, or boosting market share
  2. Look at probuild's failure from the perspective of market trends, competition, internal problems, and customer feedback.

Identifying the Goals and Objectives:

  1. Rewrite probuild's vision and mission statements to make them more in line with what the market and customers want right now.
  2. Craft a narrative that inspires stakeholders, customers, and employees to back probuild's revival with their support.

Conducting Market Research:

  1. Lead a top-to-bottom examination of the objective market, distinguishing client portions, patterns, and inclinations.
  2. Examine the strategies, distinguishing factors, and market positioning of competitors.
  3. Look for new market opportunities and partnerships or collaborations the might form.

Enhancement of Products and Services:

  1. Conduct a thorough evaluation of the product and service offerings, highlighting areas for innovation and enhancement. Create plans for the event of an emergency and devise strategies to reduce these risks.
  2. Make investments in R&D to improve existing goods and services or create new ones that meet current market demands. Because of poor financial management, inefficient marketing strategies, a lack of creativity, or any number of other factors (Van et al. 2021). Assess the state of the market at the time of failure. Evaluate the interior tasks and recognize any functional shortcomings or authoritative issues that added to the disappointment.
  3. Carry out quality control measures to guarantee consistency and consumer loyalty. Inspire employees to come up with fresh concepts and cultivate a company-wide innovation culture.

Monetary Rebuilding:

  1. Perform a comprehensive financial analysis that identifies inefficiencies and cost-cutting opportunities. Consistently survey and break down ther presentation against the set goals.
  2. For better pricing and terms, renegotiate contracts with partners and suppliers. Keep up with industry trends and new technology in order to find opportunities for change and innovation.
  3. To obtain the necessary capital for revitalization, investigate funding options like loans, venture capital, or strategic partnerships. Position ther goods or services in the market and define ther unique selling proposition (Achim et al. 2022). Develop a comprehensive marketing strategy that incorporates digital as well as traditional marketing channels.
  4. Carry out severe monetary administration practices to screen income, planning, and benefit. Identify potential target markets that provide growth opportunities by conducting market research. Take into account demographic, psychographic, and behavioral factors when defining ther ideal customer profile (Konvisarova et al. 2019). Dissect the necessities and inclinations of ther objective market to foster items or administrations that take care of their requests.

Enhanced Customer Experience:

  1. Lay out a client-driven approach by social occasion and investigating client criticism and inclinations.
  2. To attract and keep customers, use personalized marketing strategies like targeted advertising and loyalty programs. Ensure proper budgeting, financial forecasting, and cash flow management by reviewing and updating ther financial management practices (Yanyu et al. 2019). Create a realistic financial plan with projections of revenue, costs, and investment needs. Look for outer subsidizing if important, like credits, ventures, or associations, to help the organization's development plans.
  3. Increase the responsiveness and problem resolution of support and customer service systems. Recognize and address any functional shortcomings that were available in the bombed organization. Smooth out processes, further develop store network the board, and influence innovation to improve tasks (Motavaseli, 2021). Put money into training and development for employees to make them more productive and to create a culture of constant improvement.
  4. Make use of technology and data analytics to learn about how customers behave and modify products and services accordingly.

Authoritative Turn of events:

  1. Examine the organizational structure of the business and identify areas for enhancing efficiency and streamlining. Identify potential dangers and obstacles that might occur during the revival process. Assess and monitor risks on a regular basis to guarantee proactive management.
  2. In order to increase employee engagement and productivity, cultivate a culture of innovation, teamwork, and continuous education.
  3. Give preparing and advancement projects to improve workers' abilities and versatility.
  4. To encourage and acknowledge employees' contributions, clear performance metrics and reward systems should be established. To effectively reach ther target market, identify sales strategies like direct sales, partnerships, or e-commerce.

Execution and Checking:

  1. Create a comprehensive implementation strategy with distinct milestones, responsibilities, and timelines.
  2. Lay out an observing and assessment system to follow headway and make changes depending on the situation.
  3. To maintain transparency and build trust, regularly inform stakeholders, customers, and employees of updates and accomplishments.

Assessment of possible risk:

  1. Recognize likely dangers and difficulties that could thwart the organization's recovery endeavors.
  2. Make plans for an emergency to keep the business going and reduce risks.
  3. Lay out an emergency supervisory crew and methods to deal with unforeseen occasions really.

Planning Improvement:

  1. Cultivate a culture of nonstop improvement by empowering input, trial, and error, and gaining from disappointments.
  2. Update the strategic plan on a regular basis in light of changes in the market, technological advancements, and customer feedback.

The failed business can relaunch and achieve sustainable growth over the next five years by adhering to this strategic plan. It necessitates concentrated efforts in the areas of organization, service enhancement, financial restructuring, customer experience enhancement, and market analysis. 

Question 3

There are some innovations that can be done in the business that was proposed in this project. The description of these innovations is as follows.

The first thing that can be done is to improve the relationship between the business & the customers. The main activity in which probuild is related is the construction business. In this regard, it can be said that in this industry there is always a try from both the client & probuild to spend the least cost. This can be done by continuously interacting with the customer regarding the progress of the project along with the need for changes according to the changing condition.

Another innovation that can be done here is making the process of construction such a way that results in generating less waste (Larionov & Smirnova, 2022). This will result in making the projects of probuild sustainable. Moreover, by this probuild will be able to earn a good reputation in the market.

Furthermore, another innovation that can be implemented is to lift the position of probuild in the market. For this different things can be done. Among these strategies, the most important thing that can be done is to partner with other companies. By this strategy, the resources of both probuild can be shared and this will result in improving the work of probuild.



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  • Banka, M., Tien, N.H., Dao, M.T.H. and Minh, D.T., 2022. Analysis of business strategy of real estate developers in Vietnam: the application of QSPM matrix. International journal of multidisciplinary research and growth evaluation3(1), pp.188-196.
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