You need follow the sample to write a market anaylsis, it need exactly 4 part like the sample provides, the industry is constr

Bertco Inc

Group 9

CHU-TING HSU

YUAN-YU CHIEN

Quanzhe Shi

SHIH-WEI PAN

Strategy

Having different qualification letters/certificates

Get as much high-value work as possible

Offer competitive bids and high quality of work for more job opportunities

Beat the schedule for higher profits and benefit the projects as a whole (SPEED IS KEY)

Bertco's main strategies are

1. Having various qualification certificates from the City of San Francisco, State of California, and Airport Commision, which are obtained by personnel through training courses. This not only allows the company to obtain jobs but also to meet project legal requirements.

2. Get as much high-value work as possible, like building skyscrapers, airports, etc.(how do they generate this?)

3. During the bidding process, Bertco will propose competitive bids and higher quality than the same industry to obtain job opportunities.

4. Beat the schedule for high profits and benefit the projects as a whole. For example, when the project's timetable is 12 months to complete, Bertco will complete the project two months early so that the company can turn a low profit job estimate into a high profit job execution.

Competitive advantage

Preform high value work

Meet the requirement of the law for the owner of the project

Local business enterprise

Reason

Most local business are not offering high value and skill any only provide single, low cost service (So they are unique in some sense)

Bertco Inc's competitive advantage is to perform high value work and able to meet the requirement by the law for the owner of the project. They are also local business enterprises.

High Value work is work that costs more than other scopes of work. If a developer wants to build a skyscraper, the cost to hire a company to paint the walls will be much lower than the costs to drill the foundational pillars, excavate the land, and install structural shoring. If a $100 million dollar high rise needs 20% of the dollars to go to Local Business Enterprise (LBE) of San Francisco, it is much easier to meet that if the LBE performs high value work like drilling, rather than painting.

The reason why those are competitive advantages is that most local businesses do not offer high value scopes of work. They only provide a low value work such as only wall or window service, but Bertco Inc provides scopes that are very cost heavy. The advantage of this is that they become a very appealing bidder for projects with LBE requirements.

Core competence

Certification to do high value work (State, City, and Federal Airport Commision Certification which are extremely difficult to earn) There core competence must be the skills that lead to certification, no?

Meet San Francisco City Requirements of LBE Participation on City owned and Private Developer owned projects

The firm has several certifications for large volume tasks such as drilling, shoring, and so on. The majority of companies that earn those certifications are larger than Bertco Inc, with revenues of more than a billion or a half-billion dollars every year. Therefore, they do not meet the requirements for being a local business in San Francisco. To meet San Francisco law's local business standards, the company must be local and have a revenue of less than $40 million per year. There are just two companies in the Bay Area that comply with the SF statute that also perform high value work. The first company, the competitor, has been in business for over a decade, and in 5 years Bertco has become the preferred LBE high value contractor for some of the largest Developers and General Contractors.

Is it skills?

7 S factors

Staff cause weaker performance:

Hourly wages demand for job stability

A lack of jobs to build pressures employees to seek other employers

Solution:

Try to bid and win more jobs

Keep the gap from completed projects to new project start dates short

The only weaker performance is staff :

Workers who build works for the company are paid by the hour rather than by salary. They are paid a high hourly rate of 80 to 90 dollars per hour. For example, suppose a corporation has a building project that will take one year to complete. If the project ends and the firm does not have a new project to work on until three months later, the employees will not be paid between the gaps because they don’t have work during that period. Furthermore, they will choose to depart for another firm that has the work for them. So that they can be paid on a consistent basis every day.

Solution:

1. Try to bid on a large number of jobs so that they can keep employees occupied all year round.

2. Try to keep the gap as short as possible since it's simpler to inform them that the job will start in a week and that they can take a week off at home. So that the workers can continue to work for the same firm.

V, R, I analysis

Value : Certified by the city of San Francisco

Rareness : Most small sized construction companies range from landscapers, material truckers, commercial painters, and carpenters. Bertco is a State Certified and qualified Civil Engineering Contractor, but with the revenue size of an LBE contractor

Imitability : Only one can do in the bay area market

Value: Bertco Inc. is a LBE(Local Business Enterprise) certified by the city of San Francisco, that can help the city of SF and also developers, meet their LBE requirements and to avoid the fine from the city.

Rareness: The work done is very professional, and it is not doable for ordinary companies (what makes it more professional?), but companies in the same industry are still different in size. The reason is that the founder and CEO of Bertco has over 30 years of experience in the industry and was the Chief Operations Officer (C.O.O.) of one of those aforementioned extremely large companies that perform this kind of work. And what did he learn that makes him successful?

Imitability: Only two firms in the bay area know how to make bay mud stable before constructing a structure. Bertco Inc is one of the companies, and they can do much more. It will also be less expensive if the building work is done by the same business. Rather than hiring the other company, along with other companies to perform 4,5 or even 6 scopes, developers like being able to hire Bertco to perform all the scopes in a single bid package because it lowers overall costs, and makes the developer’s job easier for having to manage only one company for the scopes rather than multiple companies for the same scopes.

Thank You 8.4

Product Quality

What do you like best about our product?

The high quality and safety in high profile project

If you could change one thing what would it be?

Increase the volume of work to make : can handle the project out of the California

Strategic Groups

X asis: In the construction industry, when the company have a job, the company must have a timeframe for completion. When the government hires a business to build a building, for example, they will also tell you how many days you have to finish the job. If you go over the timeframe, the company must pay out of pocket for the labor and equipment. If the job is completed sooner, the firm will still get paid the full contract. This means that if Bertco Inc completes the project sooner, the profit will grow. Also, the rental equipment can be returned to the location where it was rented. Furthermore, the owned equipment may be used on other projects that currently exist. Y asis: There are several types of equipment. Some of them are more expensive and need more time and money to train the employees how to use it.

Bertco Inc uses pricey equipment that can be programed how deep need to dig, and if go too deep, it will immediately stop. This prevents over excavation. Also, it will inform the operator of the weight of the soil you have placed right now. Company A, the operator is using less expensive equipment, they will have to estimate how much dirt visually. There are laws in California that prohibit you from running trucks that are loaded too heavy with dirt. If there are too many, the corporation will receive the ticket and lose money and the job can be shut down thus causing delays in schedule. On the contrary, if you load trucks too light, they will have to make more round trips to haul all the soil, thus taking more time and more money. Having a scale on the excavator eliminates those problems by allowing for maximum loading efficiency.

(Due to the company's privacy, Bertco Inc doesn't want us to provide the competitive company’s name, so we use Company A to represent on the graph & note.)

SO BERTCO IS FASTER.

SWOT

Strengths: •Perform more than one scope ( for example: demolition, drilling, shoring, and soil stabilization) •The government entity or a private entity is easier to manage their project	Weaknesses: •Weak financial data cause Bertco Inc hard to get a line of credit with banks and hard to give the bonds to the developers and the government agencies
Opportunities: •Have more high tec equipment for the construction industry •The equipment will increase the profits because it minimizes the mistake by the machine operator	Threats: •The external environment can endanger profit for the business •The construction industry is very affected by how the government decides to budget the money. •The private company don't want to spend money building new offices because of the pandemic

The strength of the company is that they perform more than one scope. They do demolition, drilling, shoring, and soil stabilization. The reason why that is a strength is that, when a government entity or a private entity is looking for a company to hire, it's cheaper for them to allow for one company to do multiple things. The other reason is that, even if Bertco Inc were the hired company to do the job, they still have to be managed by either the government entity that is hiring them or the private entity. It is easier to manage one company than 2 or 3 companies.

The weakness for Bertco Inc, is they are a young company. The company itself only has some financial data from 2018 to now. In the construction industry, they need to provide a bond to do the job. A bond is an amount of money to ensure the company has enough money to do the project. So when financial data is weak, it's hard to get a line of credit with banks and hard to give these bonds to the developers and the government agencies.

The opportunities right now from an external environment. This would be equipment. Such as Google makes high-tech equipment and systems for construction. If Bertco Inc. can get a machine that can break all the concrete for the company, they only need someone to program in the computer and then it will do it for the company. The equipment will increase profits because it minimizes the mistake by the machine operator.

The external environment can endanger profit for the business. The construction industry is very affected by how the government decides to budget the money. If the government stops spending money on building freeways or renovating airports that means there's less government jobs. The private side, the economy also will affect them. For example, if the pandemic forces everybody to work from home then the private company doesn't want to spend money building new offices because they don't know if everybody's going to be working from home or the company building.

5 forces of competition

1. Threat of new entrants

Not many new entrant because of high barrier – high cost industry

2. Substitutes

The threat of substitutes is a high one in construction industry – earn the trust of the government and developers

3. Bargaining Power of Suppliers

The bargaining power of suppliers is huge because equipment and material suppliers can give better prices to preferred contractors

4. Bargaining power of buyers

Buyers : government and developers who buy the project They have the power to resist the oligopolies of industry

5. Rivalry

Rivalry is tough, because of not many company entering

The company already in the industry has huge competition power Beat the price and bid for each other

1. The threat of new entrants for the construction industry is low because of high cost. The new companies usually open non-union companies like home remodel construction. Civil Work construction is mandatory Union work, which costs significantly more.

2. The threat of substitutes is a high one in the construction industry, the government would like to choose the company they used to cooperate with; on the other hand, if the company messed up once, they would like to switch to another company for this project. Reputation can make or break future contracts for work.

3. The bargaining power of equipment and materials suppliers is huge. If they give better prices to a preferred contractor, that contractor can price a job at a lower cost and win the bid.

4. Buyers : Government who buy the project. Not as prevalent as supplier power. The industry has traits of an oligopoly. A relatively few number of contractors control geographic regions of the industry (Socal, Norcal, Central Cal) (or State by state, ie. CA vs AZ). If all major “Specialty Civil Works Contractors” inflated prices, the government or developers would not subdue easily. They can cancel the project before it begins, which would lead to the industry having to be true and fair on pricing. They can tell because the government and private developers hire independent engineers who give an “Engineers Estimate” so there is a set range on what a project will truly cost.

5. Rivalry is tough, because of not many company entering ; on the other hand, the company already in the industry has huge competition power Beat the price and bid with and against each other to win. Joint Ventures or Solo ventures can win jobs if the price is right.

Industry life cycle

The construction industry is currently in the introduction stage.

Buy the best equipment to increase productivity and make profits.

Train employees how to use the high tech equipment.

In the mature stage, companies will have similar equipment and functions.

Currently, Bertco Inc is in the introduction stage. Bertco buys the best equipment to increase productivity and increase profits. They also spend a lot in training operator how to use the high tech equipment. In the mature stage, companies will have similar tools and functionality, and they will be familiar with the operation of the tools, which will make bidding jobs more competitive. Therefore, profits will decrease. They cycle will repeat after maturity/decline when construction equipment manufacturers (CAT, Link Belt, Bauer, John Deere), make even further technological advances with their equipment.

Thank You

8.41

Catch the New Wave: What’s the next hot thing in your industry? Is your firm well positioned for this?

Autonomous equipment would be the next new wave

Equipment have the ability to operate without a human inside

Well relationship and financial position let Bertco Inc be one of the first allocations of these machines

A new wave would be autonomous equipment similar to the Tesla cars that drive by themselves. The equipment will operate by itself without a human inside of the machine. Currently, the machines that are getting closer to mass production are for demolition. Bertco Inc would be pretty well-positioned for this because they have good relationships with the bank financiers for equipment, also have good relationships with the equipment companies so that when they come out, they will definitely help get Bertco. one of the first allocations of one of these machines. It's not quite ready yet, but when it comes, Bertco would be very well positioned for it.

What specifically? It is vague at this point.

Re-branding

There is no benefit to re-branding in this moment and near future

The company logo and slogan are California’s contractor

Licensing restrictions (Licensed only in California)

Don’t think that rebranding has any benefit at this moment or in the near future. The reasons are: 1. Currently, the company’s logo and slogan which are California’s contractor. 2. Licensed only in California. For these two reasons, Bertco's target audience or target consumers or municipalities are cities or federal programs in California state. If you look at the company's logo you will see the Golden Gate Bridge, which means it's a San Francisco company because it's located in San Francisco. The secondary colors are blue and gold, which is also a good representation of California because the UC system has both blue and gold whether it's UCLA or UC Riverside, and there's a prominent basketball team called the Golden State Warriors. These also represent the slogans of California contractor. The font for the logo is using Stencil Font, which can represent the building blocks of the letters because that build thing company is a construction company. It's a pretty neat branding pitch. Therefore, we don't think the rebrand can benefit Bertco in this period and in the near future, but maybe Bertco can expand to other states in the long term.

A small percentage of markup on the labor

The bigger profit comes from the equipment

Beating the schedule

How about a new profit model?

Can your firm benefit?

Didn't see any way that currently can benefit from any new profit model and didn't see any new profit models that are available to companies like Bertco Inc, and that is not just for Bertco but we think the industry as a whole. When the company is a subcontractor or even a general contractor, the profit from a few different things.

1. A small percentage of markup on the labor – if a labor cost 100 dollars per hour, the company will charge 15% markup on 100 for the total of 115 dollars an hour. Then 15 dollars extra would be the profit for every hour. That is a small portion.

2. The bigger profit comes from the equipment – when the company rents the equipment, they have to pay the bills to the company that rents it from but if the company owns the equipment it is an asset and equipment makes money. The car, personal vehicle are assets but they depreciate and don't make money but equipment even though it is still a depreciated asset it makes the money because it works. It's a machine, it's almost like labor, a person. It produces something, and so if you have the equipment it's on a finance from the bank, when the machine is working you will charge the company that is hiring you the money for the machine and you will use the money to pay the bank for the loan on that machine. And will still have a little bit of the profit but then once the machine has made enough money to pay for itself, you will now start making money that is purely profit from that machine which is a pretty substantial number when some of the machines can cost thousands of dollars for a day of work. If you imagine a job takes a month th

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