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Zengani Building Projects


Giving Solutions & Quality to Buildings

A COMPREHENSIVE CASE STUDY FOR ZENGANI BUILDING PROJECTS 73 Bridgetown Agulhas Road Bloubosrand Randburg 2188
www.zenganibp.co.za

(22nd April 2010)

INTEGRATING BUSINESS PROCESSES AND ACTIVITIES

PREPARED BY CUTHBERT CHINJI JNR 207014329

FOR MRS F. MPOSULA (BUSINESS ANALYSIS) CUTHBERT CHINJI JNR 207014329

2010

Zengani Building Projects


Giving Solutions & Quality to Buildings

Table of Contents
Page 1. Background...........................................................................................3 2. Vision.....................................................................................................3 3. Mission ..................................................................................................3 73 Bridgetown Agulhas Road Bloubosrand Randburg 2188
www.zenganibp.co.za

4. Firm Analysis........................................................................................3 5. Types of organisational Activities.......................................................3 6. Life stages of the company..................................................................4 7. Porter five forces..................................................................................5 8. Swot analysis........................................................................................5

9. Factors that cause a firm to decline....................................................6 10. Successful organisations......................................................................7 11. Analytical process................................................................................7 12. Strategic choices at the top level........................................................8 13. The resource based perspective.........................................................9 14. Strategic Position and Action Evaluation (SPACE)........................9 15. References...........................................................................................10

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Zengani Building Projects


Giving Solutions & Quality to Buildings

1. BACKGROUND 73 Bridgetown Agulhas Road Bloubosrand Randburg 2188


www.zenganibp.co.za

Zengani Building Projects (ZBP) is a small privately BEE owned company that was conceived in July 2008. It is one of the few companies that has managed to withstand the harsh realities of global economic recession which has forced many small businesses out of the business. As the name suggests, we specialise in waterproofing projects. 2. VISION We aim to be one of leading construction companies around Gauteng in terms of service delivery while empowering the society at hand through job creation. 3. MISSION Our mission is to provide the best services to our clients at competitive prices without exhausting the cash flow of our company.

4. FIRM ANALYSIS In our case study, we have used Firm Analysis to evaluate and identify strategic options available that we will implement to enhance and streamline our business activities. We identified that our clients need waterproofing related services such as building, painting, renovations and plastering which are not currently supplied. We have decided to offer such activities not currently supplied. This fits in our current activities since we are already dealing with close related activities. This will not only, satisfy our clients needs but also enable us to generate more revenue for company growth. Offering this new service will have a positive impact not only in terms of our cash inflow but as well as increasing our market share since we will be offering a wide range of services. The company does not have enough operating capital to fund acquisitions of raw materials as well as extra labour skills, and that poses a major challenge for us to extend our services to clients. Having already projected a positive cash inflow as a result of extending our services, we will raise funds through bank loans at affordable rates.Offering of our new services to our clients is seen as growth

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Zengani Building Projects


Giving Solutions & Quality to Buildings

within our company which will need to be managed. Unfortunately our top management is not well equipped with leadership skills due to previously held positions. In the best interest of our staff members as well as for sake of the company growth, our top management will constantly go on monthly basis for workshops to acquire leadership and managerial skills.

5. TYPES OF ORGANSATIONAL ACTIVITIES Innovation activities: We are predominantly charged with Sales and Marketing, Product research and development. We are doing this through local newspapers, sales agents, text messaging technology as well as through our newly launched web site. This has enabled us to reach new customers that are geographically dispersed.

73 Bridgetown Agulhas Road Bloubosrand Randburg 2188


www.zenganibp.co.za

6. LIFE STAGES OF A COMPANY Direction: Our Companys power still resides in the hands of the top management which are also the co-founder of the business. They take charge of the direction of the company. Functional tasks such as production, distribution and marketing are the responsibility of supervisors. The functional organisation structure of our organisational structure can best be depicted with the following histogram.

Manager

Salesperson

Supervisor

Accountant

Agents CUTHBERT CHINJI JNR 207014329

General Workers

General Workers

Book Keeper

Page 4 of 10 Figure 1. Functional Organisational Structure of Zengani Building Projects.

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Zengani Building Projects


Giving Solutions & Quality to Buildings

7. PORTERS FIVE FORCES i. The threat of new substitute Products: ZBP being a newly formed company has not fully gained a market share for its services. We therefore face threats from competitors that have been in the business industry for decades with similar products and services. This is true especially when customers do not incur switching costs between providers. ii. The threat of new entrants: 73 Bridgetown Agulhas Road Bloubosrand Randburg 2188
www.zenganibp.co.za

The rate of South African young entrepreneurs is growing in the construction industry. This brings another threat to Zengani Building Projects as many young entrepreneur enthusiasts are entering the construction industry with similar services and product features. iii. The power of buyers: When buyers have information about the costs of production, they can negotiate prices down and reduce our industry profitability. To avoid this, we will insure that price acquisitions and costs of our resources are kept as confidential as possible. iv. The power of suppliers: This is high when there no substitutes for the supplied products. As a result of this, such products can command high prices. v. Rivalry among industry members: Competition tends to be high when demand growing slowly or declining. This causes greater rivalry when it is difficult to leave the industry due to costs incurred or failure to sell off fixed assets. 8. SWOT ANALYIS i. Strength: The strength of our company lies in its distinctive and quality services it offers to its clients at competitive prices. Any work performed is assessed to ensure that it has met quality standards set by its top management. The launch of our new website has not gone unnoticed it has improved customer liaison and acquired new customers on the go. Customers are able reached the company at their convenience. Page 5 of 10

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Zengani Building Projects


Giving Solutions & Quality to Buildings

ii. Weaknesses: Despite the companys strengths, it acknowledges the challenges that it currently faces within the management. The top managing members that sit with organisations power come from a diverse culture with little previous managerial experience. This has made them difficult to secure many tenders. Another concern is the presence of their website. Initially the website was launched to enhance and integrate the business processes with its clients. The website has so many flaws, first being static in nature which does not rely on user input as opposed to modern dynamic websites that have captured the hearts of many internet users. The website has very basic content that lacks an element of marketing. This reduces its new potential customers. iii. Opportunities: The coming of soccer world cup has seen an economic boom in the construction industry and we view this as an opportunity. We therefore intend to extend our services on a wider platform to meet the growing needs of our clients. iv. Threats: The global economic meltdown poses the biggest threat by far in any industry and our organisation is not exceptional to that. Customers spending power is reduced and this slows down the economic growth of our business and we might eventually find unbearable to meet our obligations and be forced out of the business.

73 Bridgetown Agulhas Road Bloubosrand Randburg 2188


www.zenganibp.co.za

9. FACTORS THAT CAUSE A FIRM TO DECLINE Poor Management: The role of top management cannot be overlooked in the success of any organisation and its failure equally is attributed to top management. To curb this problem, our managers will undergo training to acquire necessary skills from recognised institutions as well as attend workshops and seminars that equip people with leadership skills and managerial skills. Another approach is to have an open decentralised management leadership style where staff members opinions in decision making would be valued. This creates a free and open atmosphere between managers and staff members which in turn promotes harmony in the organisation. CUTHBERT CHINJI JNR 207014329 Lack marketing effort: Our marketing effort is constrained due to financial hurdles. As a result, we do not have a strong client base. We have identified that by Page 6 of 10

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Giving Solutions & Quality to Buildings

enhancing our website we could use it as our core marketing tool to reach new as well existing customers.

10. SUCCESSFUL ORGANISATIONS i. Strategic planning relationships: These are relationships whereby the centre actively participates in strategy development and implementation. 73 Bridgetown Agulhas Road Bloubosrand Randburg 2188
www.zenganibp.co.za

This does not necessary apply to ZBP since it is a single business unit. However, it has partnered with SafeGuard as its core supplier for ZBP. This could see the two organisations develop long term perspectives and lead to business sharing ideas. ii. Financial control relationships: These relationships are defined on the basis of the main centre setting financial targets and delegates strategy development to business units. This not only is appropriate for urelatedly diversified corpaorations, but also helps motivate managers to focus on short term performance and identify short-term weaknesses in strategy. iii. Strategic control planning: These are intermediary relationships that lie between financial control relationships and strategic planning relationships developed by the business units often approved by the centre. 11. ANALYTICAL PROCESS i. Preliminary Corporate analysis: ZBP is a neatly structured and identifiable business that operates mostly around Gauteng area, but also stretches its operations as far as Pretoria. It deals with building, painting, renovations, and waterproofing of houses. The organisation structure of Zengani is small. As a result communication between the top management and staff members is quick and efficient. The financial performance of ZBP is just above the average. However, it heavily relies on a substantial upfront payment when a certain tender has been secured.

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Giving Solutions & Quality to Buildings

The suppliers as well as customers in conjunction with the employees are the major stakeholders. Suppliers need to know our track credit record so that they could be able to supply the organisation with resources on credit. The customers need to know if they will get the best value for their money in relation to the organisations services provided. Similarly with employees as stakeholders, they would not work for a company that has financial crisis. Individual business analysis: ZBP generally consumers are those who own houses including private institutions. Given its low cost of services/products offered to its clients without compromising quality, this has made the consumers as their number one priority. The organisation as an independent entity has some setbacks financially it cannot fund or acquire big projects. However, given its size, it is easily manageable. Summative Corporate analysis: ZBP is heavily affected by the global economic down turn. The cost of raw materials has substantially increased. To combat this phenomenon, we will acquire resources in bucks during promotions to reduce costs. Our management vision is to nurture the business so that it becomes a big empire that will not only confine its operations to Gauteng Province but also to all South African corridors.

73 Bridgetown Agulhas Road Bloubosrand Randburg 2188


www.zenganibp.co.z a

12. STRATEGIC CHOICES AT THE TOP LEVELS Business Disposal: Currently the organisation is in financial crisis. It does not generate enough funds to meet its obligations. We are looking at selling the business so that we can pay our out debts. Business Acquisition: Another option that we had in mind is to extend our services by offering related services as previously indicated. Recommendation: In the interest of our clients and our society at large, we have decided to look at other ways of raising money to meet our obligations. We will sell out shares to the public at competitive prices instead of constantly borrowing money from private institutions that charge us a lot of money.

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Giving Solutions & Quality to Buildings

13. THE RESOURCE-BASED PERSPECTIVES Heterogeneity of resources across the firm: We use unique resources that are uniform across its firms. Employees and company vehicles have emblems that bear the company logo. This helps them to be easily identified across the industry as well as to its our clients. It is also part of the marketing strategy since the company contact details are embedded on the emblem. The acquisition price of assets: We will keep at least a considerable amount of operating capital to take advantage of buying goods in bucks as well as those running on promotions so that we could make more profits.

73 Bridgetown Agulhas Road Bloubosrand Randburg 2188


www.zenganibp.co.z a

14. SPACE: The financial strength of the business: Our Company does not have financial strength. We cannot meet most of clients needs. We will raise money by selling out shares to the general public so that we can remain in the industry. We will also merge with a more cash-rich business in some form of conglomerate or concentric merger to increase our financial muscle. The strength of the industry: We operate in some sought of high competitive market that involve high cost of production. So there is a striking balance between cost and profitability levels. To gain competitiveness in the market, we will be acquiring resources in bucks and offer our services at competitive prices to retain as well as reach customers. Factors that determine the strength of the industry include: i. Growth potential ii. Profit potential iii. Financial stability iv. Technology know-how
Giving Solutions & Quality to Buildings

CUTHBERT CHINJI JNR 207014329

The degree of environmental stability: We have already implemented an online web site to reflect the current trend in business environment which is inclined to using technology in conducting business. We are reaching new customers with low costs incurred that are geographically dispersed.

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Giving Solutions & Quality to Buildings

Factors that determine the degree of stability with the organisation compared to its rivals include: i) Technological changes ii) Rate of inflation, iii) Price range competitive advantages iv) Demand variability The level of competitive advantage: We operate around Gauteng that has many competitors. We are focusing on entering on the same market segment with new services and by delivering high quality products and services at competitive prices. We believe this will give us some level of economic boom. Factors that determine the level of competitive advantage of the business include: i) Market share ii) Product quality iii) Customer loyalty

73 Bridgetown Agulhas Road Bloubosrand Randburg 2188


www.zenganibp.co.za

15. REFERENCES: Williamson, D. (2004) Strategic Management and Business Analysis. UK: Elsevier td.. Nelson, R . ( 1982) An Evolutionary Theory of Economic Change. Harvard University. Zengani Building Projects: Company Profile. www.zenganibp.co.za. Accessed: 20th April, 2010.

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