Transformational Corporate Strategy

CRANEFIELD COLLEGE OF PROJECT AND PROGRAMME MANAGEMENT

INDIVIDUAL ASSIGNMENT

FOR

MODULE M 4

Transformational Corporate Strategy

Please include the following declaration:

“I hereby declare that this assignment is entirely my own work, and that it has not previously been submitted to any other Higher Education Institution. I also declare that all published and unpublished sources have been fully acknowledged and properly referenced. This includes figures, tables and exhibits. Where modified by me, this has also been indicated.”

Table of Contents

Executive Summary        1

1.        INTRODUCTION        2

2.        PROBLEMS AND CAUSES        2

2.1.        Sandvik Competitive Environment        2

2.2.        Sandvik Basic Strategic Environment        3

2.3.        Degree of turbulence in the market        5

2.4.        Analysis of the stages of market growth        7

2.5.        Key Factors of Success in the Industry        7

3.        FIVE FORCES ANALYSIS        8

3.1.        Threat of new entrants        8

3.2.        Bargaining power of suppliers        8

3.3.        Bargaining power of buyers        8

3.4.        Threat of substitutes        8

3.5.        Competition in the industry        8

4.        FOUR LINKS ANALYSIS        8

4.2.        Opportunities and threats from formal cooperative links and networks.        9

4.3.        Opportunities and threats presented from complementors.        9

4.4.        Opportunities and threats from government links and networks.        9

5.        ANALYSIS OF COMPETITORS        10

5.1.        Analysis of customer and market segmentation        11

6.        CONCLUSIONS AND RECOMMENDATIONS        11

6.1.        Conclusions        11

6.2.        Recommendations        12

7.        BIBLIOGRAPHY        13

TABLE OF  FIGURES

Figure 1: SWOT ANALYSIS        3

Executive Summary

Sandvik Mining and Construction RSA (PTY) LTD is part of the swedish-based Sandvik Group, a global industrial concern specializing in the marketing and supply of underground mechanized mining products.  The company has a vision of setting the industry standard.  In respect of the construction side of the business, various solutions are provided for surface rock excavation, tunnelling, demolition, recycling and road rehabilitation.  Customers benefit from a range of equipment that are developed based on extensive research conducted by Sandvik research teams, focusing on rock tools, drilling rigs, loaders and trucks, crushing and screening machinery and bulk materials handling.  

The company operates in the african market, that has been stable for the past few decades.  Growth has been steady at around 4,3% with very little turbulence in the market.  There is fierce competition between competitors to deliver products to the limited customer base.  Africa is however the new shopping mall for developers, and the market will explode, with new opportunities, as government investment in new infrastructure increase.  This will result in even more competition, and only those with innovative products will survive.  Research and development in new more portable mining and construction equipment is needed, as these will be in high demand, replacing the traditional heavy machinery.  Collaboration will be key in finding and developing equipment of the future, and Sandvik with its already established research capability, is well positioned to take the lead in this area.

Sandvik's strategy of focusing on improving customers’ operational efficiencies and profitability through the creation of high-tech engineering products, is well poised to take them to the next millennium.  There core capabilities drive value creation.  It makes use of a common value chain, but the emphasis is on strong differentiation in its application. Its value creation is based on strong market position and pricing power, attractive returns and customers benefitting and capitalizing on reduced cost and increased productivity. This together with its well established business practices and exceptional leadership, will ensure sustainability for years to come.  Focus should however be on the development of small portable equipment.