1. Abstract

Singapore and Far east Asia in general had been investing heavily in the Oil, Gas & Petrochemical sector since the last economic downturn. Many of the Oil Giants like Shell, Exxon Mobil, ESSO, Chevron have moved their Far East regional offices to Singapore, in order to cater to the growing demands in this sector in Far East Asian region. As a result of this, the downstream process industry owners like Large Chemical, Petrochemical, Pharmaceutical companies have also located their regional head offices in Singapore. This has resulted in large investments and hence large number of heavy Construction Projects in Singapore and the region in General.

In Singapore market specifically, it is difficult for the Contractors to keep large pools of manpower due to their multidiscipline nature of contracts. Hence traditionally they have been taking manpower from the manpower suppliers.

This paper deals with a Manpower supply company, which is amongst numerous manpower companies existing in Singapore and with the new projects coming up, needs to innovate in order to stand out from the crowd and increase its business potential. This innovation is based on the companies strength of skilled workmen (competitors would take time to buildup this kind of strength), availability of technical resources like safety experts, planning, contracts & construction expertise within the organization. The Company also has certifications from various governmental authorities and is also ISO certified. The traditional manpower companies lack these expertise or this level of manpower strength.

With the above strengths in hand, the Company would start taking subcontracts, involving its technical experts and would take up partial scope of Project (specifically in the field of insulation, fireprotection, scaffolding & chemical cleaning) rather than just supplying manpower on manhour basis as other manpower contractors would be doing.

This innovative way of serving the established market, using a shift in business model, whilst using the same platform is based on a paradigm innovation. This would benefit both the Contractors and well the company. While on one hand it will reduce Contractors fixed cost for Supervision, Planning, Safety & QA/QC on the worksite, which would be provided by the Company for the portion of the piece work accepted by them, on the other hand, this would be unique kind of contracting service provided by any manpower supplier.

2. Table of Content

1. Abstract 2. Table of Content 3. Introduction - Company Profile - Present Scenario / Status 4. Scope of Project

5. Scanning5.1 Overview of Scanning 5.2 Scanning Activities

5.2.1 Scaffolding services5.2.2 Fire protection services5.2.3 Chemical cleaning services

6. Market Analysis6.1 Oil and Gas projects in Singapore6.2 Oil refineries projects6.3 Pharmaceutical factory project6.4 Environmental Infrastructure Projects

6.4.1 WTE (Waste-to-Energy) plant construction project

7. Market Potential - Forecasting - Review of Market potential 7.1 Forecast and review of market potential of oil and gas field in

Singapore:7.1.1 Long Term prospects7.1.2 Comprehensive Capabilities7.1.3 Maximising Strengths7.1.4 Deepening Competencies

8. Outsourcing alignment8.1 Outsourcing

8.1.1 Individual Contract8.1.2 EPCI Contract8.1.3 Project AllianceFigure 1: 3 contract form commonly found in the oil and gas industry

8.2 Current Outsourcing strategy for this case study 8.3 Training & Competency8.4 Foreign workers levy

9. Launch Strategy: Implementation Plan ( Shift in business model)10. Maintaining Competitive advantages 11. Conclusion

3. Introduction - Company Profile - Present Scenario / Status of Company

Mirador Manpower Pte Ltd (Here in after referred to as Company) is essentially one of the numerous manpower supply companies existing in Singapore. Present business model of the company is a simple one. The Main Contractors or Service Contractors hire the labor from the manpower supplier on $/manhour basis and this labor is used to accomplish the task ascertained by the Contractor hiring them, thus the labor works under the supervision of the main Contractor or the service Contractor ( Herein after referred to as Contractor).

The Company has a strength of over 700 workers, which is a mixture of skilled as well as semiskilled labor, catering to various construction activities viz : Industrial Insulation, Painting, Scaffolding, Welding, Fabrication, Civil masons, Electrical works etc. The work force caters to the needs of the Oil & Gas, Petrochemical, Power generation, Pharmaceutical, Chemical & in general the Process industry construction / maintenance projects.

The Company has a present turnover of around 10 million Singapore Dollar per annum with a net profit of around 10% and fixed costs of around 8%.

Company has a staff strength of around 8 office and 15 site based personnel.

4. Scope of Project

This report aims at the study of the Contracting strategies applicable to Engineering Procurement & Construction (EPC) Projects in Asia Pacific Region and specifically in Singapore market. Study of these contracting strategies would help the Manpower Company to know the feasibility of applying an innovative business opportunities in tandem with the existing contracting strategies in the market and hence create a niche market for providing such services, which are different from the existing Manpower suppliers and well as different from the existing subcontractors.

5. Scanning

5.i. Overview of Scanning

Adding innovative features of existing products or services can enrich our Manpower Supply firm’s existing line of business. We scan the existing market behaviors and focus on the new services, which did not exist previously in the market.

5.2Scanning Activities

For the past decades and presently in Singapore ,the government has pledged to continue investing in various major projects . There will also be kinds of major road works and more tendering opportunities in infrastructure and oil and gas projects. To accomplish these mega projects within the deadline ,the process of outsourcing may be viewed as a component to the growing division of labor encompassing all societies. According to the our scope of projects and services to be rendered , various types of sub contracting services are inevitably involved. we determined a few common sub contracting services involved in the projects in the area of Oil and Gas, Petrochemical, Chemical and Pharmaceutical industry . They are as follow:

Scaffolding services

Ministry of Manpower data enlists numerous scaffolding companies who provide material, manpower and/or design of the scaffold for all the industries. Major Chunk of these companies are into providing services to Civil construction or Ship repair industry. ASIA (Asian Scaffolding Industry Association) has approximately 25 member companies which are major scaffolding companies existing in Singapore. Out of these 25 Companies, only 7 major companies exist who provide the total scaffolding package to the Oil, Gas & Petrochemical industry. Our Manpower Supply Company would endeavor to get a Subcontract from these companies, providing them with certified and trained manpower along with supervision, Planning and Safety personnel on a unit rate or Lump Sum basis for a particular scope of work. This would relieve these subcontractors of the progress, schedule and safety liabilities for the scope of work that it would outsource to our Manpower supply company.

Fire protection services

Fire protection in Oil and gas industry is required for the structural steel members and fire hazard zones. Fire Protection is carried out by using either Vermiculite based cementatious products or Intumescent coating products. Sprinklers and other type of active fireprotection is excluded from this scope. Companies which provide insulation and painting services, take up this scope of work as part of the complete package. Our Manpower supply company has expertise as well as skilled manpower to take up this part of the scope as a package with insulation & scaffolding.

Chemical cleaning services

Industrial and process typically contains deposits, scale and contaminants, which affect their efficiency, capacity and heat transfer. And the chemical cleaning has proven to be the most effective method in cleaning the new or old equipments to its optimum operating condition.

The routine chemical cleaning process need to be carried out for the machineries and equipments such as boilers , pipelines, hydraulics and lube oil system, oxygen pipelines , heat exchangers, condenser and so on. In Singapore there are only a few registered chemical cleaning companies.

There are so many types of chemical cleaning systems practicing and the most common types are as follows:

Alkaline solution Surfatants Mineral Acids Organic Acids Chelants Emulsion Inhibitors Organic solvents

Industrial Insulation services

Out of all the above services, this scope of work requires large amount of manpower. Typically on a Medium sized project, there would be around 300 to 700 workers required for carrying out Insulation and heat conservation activities on pipelines and equipment in order to maintain the process temperatures, conserve heat, avoid heat gain, acoustic, personnel protection. Our manpower supply company has large amount of skilled and semiskilled manpower in order to cater to the upcoming projects. This particular discipline is the strength of our Manpower company and hence the company would try and provide a package service to the industry, embarking upon its strength.

Market Analysis

After thorough analyzing of the Singapore sub contracting market trends , we could see that there is a lot of major projects has been carried out in recent years and there are a lot more upcoming projects to be completed in the next 5 to 10 years time starting from 2010 onwards.At no time in Singapore’s modern history has there been so many large projects being built or invested within such a short span of time.

We carried out the analysis of the market on its potential growth of the demanding sub contracting services on the dimensions as market trends, market size and market growth and its distribution channels on the following project areas:

Oil and Gas, Petrochemical and downstream process based projects in Singapore

Environmental Infrastructure Projects Pharmaceutical factory projects

Oil and Gas projects in Singapore

Singapore is recognised as the world’s leading centre for the conversion of tankers into Floating Production Storage and Offloading vessels (FPSOs) and Floating Storage and Offloading vessels (FSOs). It has been reported that Singapore has a 70% worldwide market share of FPSO conversions and jack-up rig construction as well as a strong refining industry. Singapore is commonly regarded as South East Asia’s oil & gas hub.

In 2008, the Singapore offshore sector (which includes the construction, repair, upgrading and conversion of all types of offshore drilling rigs and floating production units) achieved considerable growth, with output leaping by 49.1% to a new revenue level of S$7.4 billion. In the same year, a total of 14 FPSO/FSO conversion projects were completed, with more than 10 in the pipeline. As at the end of 2008, Singapore shipyards had completed a total of 144 FPSO and FSO related projects.

Indeed, there appears to be good reason to believe that the Singapore oil & gas sector will rise once again. 2009 has seen several big names in the marine, energy and oil & gas industry relocate or enhance their operations in Singapore. It was reported that ABB, the leading power and automation technology group, is opening an engineering centre in Singapore to carry out engineering of floating production, storage and offloading (FPSO) projects in the marine and oil and gas industries. ABB has expanded its Singapore

presence since establishing a global Centre of Competence (CoC) for Marine Drilling Drives Systems here in 2005 with 15 engineers.

Oil refineries projects

Shell and ExxonMobil, as well as petrochemical firms including Sumitomo Chemicals generate 39 per cent of the country’s manufacturing output, billions in revenue (nearly S$260bn/€128bn in 2008) and daily refine 1.3 million barrels of oil here.

Jurong Island’s highway was recently moved to make way for Exxon Mobil’s new refining site.When completed in 2011, it will be the corporation’s largest.

Pharmaceutical factory project

In 2009, global biomedical sciences companies have located strategic functions in Singapore that include regional headquarters (e.g. Medtronic, Quintiles, Takeda), first-in-Asia and global manufacturing facilities (e.g. GlaxoSmithKline, Illumina, Lonza, Medtronic, ResMed, Roche) and R&D bases in Asia (e.g. Abbott, 3M, Merck, Roche, Inviragen, FORMA). These companies operate multi-purpose plants with the capability to manufacture a wide range of active pharmaceutical ingredients (APIs), biologics and nutritionals.The Singapore’s pharmaceutical and biomedical manufacturing output grew about S$ 21 billion and employed more than 12,000 people in that year.

According to the announcement of Economic Development Board (EDB) of Singapore, the pharmaceutical industry is expected to expand with two new manufacturing plants coming on stream this year. Five others are expected to open in the next three years.

Environmental Infrastructure Projects

WTE (Waste-to-Energy) plant construction project

Together with Senoko Waste-to-Energy Plant (Senoko WTE Plant), Keppel has become the only private operator of waste-to-energy plants in Singapore with our two waste-to-energy plants and will be able to treat up to 47.6% the total volume of waste that was sent for incineration in Singapore.

In early 2006, Keppel Integrated Engineering was awarded the contract by National Environment Agency to design, build, operate and own the plant for 25 years. The completed plant has the capacity to treat 800 tonnes of solid

waste a day to generate more than 20 MW of green energy, contributing to Singapore's electricity supply.

6. Market Potential - Forecasting - Review of Market potential

This project throws light on the market potential of Oil and gas field in Singapore, which examines prospects for oil & gas and Subsea by projects, reserves and production, identifying the trends by region, water depth, operator, field ownership and development type, probable impact of the current economic circumstances on the offshore oil and gas sector in the country.

Forecast and review of market potential of oil and gas field in Singapore:

Singapore has become leading oil and gas centres - by leveraging its strengths and maximising opportunities, despite global economy slowing down. it has been estimated that the oil and gas sector would grow by 71 per cent from 2006 to 2030, and will be led by Asia-Pacific and the Middle East.

This shows that there is great future for Singapore’s oil and gas (O&G) industry. Although the city-state has neither of these raw materials, it exhibited remarkable foresight by leveraging its strategic location to birth a port that is now not only one of Asia's most important shipping nerve centres, but also one of the world's busiest in terms of shipping tonnage.

 

 

Work in progress at Keppel Shipyard.

Long Term prospects

The current financial climate has affected the O&G equipment industry like it has for most other sectors. Oil prices have shown great volatility this year, and the industry faces some uncertainty in the short term. However, with sustained demand for energy from both the major and emerging economies, the long-term outlook for the industry is positive. Singapore is committed to maintaining its strong track record by continuing to invest in the O&G sector.

Most of the Republic's offshore petroleum services are concentrated at Loyang Supply Base, which, for nearly four decades, has raised its status as Southeast Asia's key offshore logistics hub. Today, it is home to over 200 well-established O&G services companies. With the establishment of TOPS, this cluster is set to grow exponentially.

As it is, companies like Prosafe Production Services Pte. Ltd. are already reaping the benefits of being based in Singapore. Roy Hallas, President of Prosafe Production Services cites Singapore's predictable fiscal system, geographical location as well as offshore cluster with yards and engineering companies as its strengths.This reinforces the established base and services available here.

Comprehensive Capabilities

The significant presence of these companies in these upstream activities has helped transform Singapore into a "Houston of the East". Today, Singapore has a comprehensive O&G ecosystem in place, including oil majors, drilling operators, specialised equipment manufacturers, service providers, and offshore engineering companies which is been affirmed by Lim Hng Kiang, Singapore's Minister of Trade and Industry

In the last two to three years, companies such as FMC Technologies have invested heavily in additional plant and testing facilities and sophisticated tools in Singapore. Robert E Sullivan, Director of Operations - Subsea, FMC Technologies, has explained that, the main driver of company’s growth was the expansion of their subsea business capabilities from a 'products' supplier to a subsea 'system' supplier.

In 2007, Floating Production Storage and Offloading (FPSO) engineering and operating company, MODEC, made Singapore its third global hub and centre for project execution with a 250-person regional office. Elsewhere, the Global Process Systems Group, renowned for its FPSO conversion work, is also using its Singapore office to reach its worldwide clientele, while classification society ABS set up its Singapore Offshore Technology Centre to advance offshore technology innovation for the region.

The nation is also a major petroleum refining centre and importer of natural gas, which are considered vital downstream activities that represent the backbone of the O&G industry. The city-state's total crude oil refining capacity exceeds one million barrels a day, which has been achieved by heavyweight global players that have a long and distinguished history in the country such as ExxonMobil, Singapore Petroleum Company and Royal Dutch Shell.

Maximising Strengths

Due to the extra-ordinary air, sea and land connectivity, the Republic's status as a major transhipment port has assured the country's strengths in supply chain management and logistics - both of which are crucial factors that have helped in establishing upstream and downstream O&G activities.

Today, Singapore is host to two of the world's biggest oil rig builders, Keppel and Sembcorp Marine, which provide essential marine and offshore engineering activities in the assembly and maintenance of FPSO conversions, fast ferries, ship repairs, offshore support vessels and jack-up rigs. Notably, an approximate 70 per cent of the world's jack-up rigs used for oil exploration and drilling are produced here.

Encouraged by the success of these locally formed enterprises, other major O&G specialist equipment companies such as Halliburton, Cameron, Proclad, ReedHycalog Singapore and Schlumberger, have also settled in Singapore to produce such sophisticated components as drill bits, wellheads, and downhole and production equipment.

The reason for these companies move up the value chain beyond manufacturing is because the country offers the

best talent in engineering, a conducive research environment, highly regarded intellectual property protection regimes. sound business infrastructure, connectivity, political stability, good fiscal regime and available manpower., lowered corporate income taxes by 50 per cent for oil companies

Deepening Competencies

The city-state is constantly upgrading and expanding its range of capabilities to meet increasing demand. Furthermore O&G industry standards have been improving as higher-level activities and skills are introduced.

The government and industry players have spearheaded various initiatives to ensure O&G's integrity, quality standards and research. The National University of Singapore's (NUS) Centre for Offshore Research and Engineering (CORE) recently launched an Offshore Technology Research Programme to undertake R&D in the latest offshore technology. It has also signed Memorandums of Understanding (MOUs) with seven industry partners for CORE to collaborate on joint research projects in offshore and marine engineering with industry.

Local polytechnics are working with highly respected overseas naval architecture and marine engineering universities. To further augment training and R&D-related capabilities for the industry, the Centre of Innovation has been established within Ngee Ann Polytechnic to help small and medium enterprises in the marine and offshore sector to engage in process automation, innovation and applied research for product development. Engineering experts have also been brought to Singapore to share their professional knowledge.

Erik Peyrer, Vice President, Business Development, Asia Pacific and Middle East, Cameron (Singapore) Pte Ltd., has cited that Singapore's role in the O&G industry is to continue expanding as a regional nerve centre, technology hub and knowledge/manufacturing base, and to become the Houston of Asia-Pacific.

Set against the backdrop of strong worldwide demand for energy, the Republic continues to boost its attractiveness as a global O&G hub that is open to new opportunities, ventures, innovations - and just as importantly, talent. It looks like the country's well-oiled strategies will definitely reap huge rewards in the years to come.

First Integrated Yard Facility Strengthens Singapore's Global Leadership in Marine & Offshore Industry

Singapore’s marine and offshore industry took a major step forward today with the announcement of the first integrated yard facility here. Developed by Sembcorp Marine, the new yard is a key milestone in the transformation of the sector, and will position Singapore for continued global leadership in the industry. The 206ha facility will be constructed in three phases, with Phase 1 occupying a land area of 74ha.

The state-of-the-art facility incorporates a revolutionary shipyard design as well as the latest production technology and processes. As a result, land use is optimised and the supply chain efficiency improved, thereby achieving a quantum leap in productivity, resource optimisation and operational synergy. The increased flexibility in the cross-deployment and multi-tasking of workers will also lead to improvement and upgrading in workforce quality.ABB opens FPSO engineering centre in Singapore

Some of the Companies and their market potential are listed below.

ABB, the leading power and automation technology group, is opening an engineering centre in Singapore to carry out engineering of Floating Production, Storage and Offloading (FPSO) projects in the marine and oil and gas industries. ABB's investment will further strengthen Singapore's offshore ecosystem and is in line with Singapore's desire to develop as an integrated marine and offshore hub. Building on its competence in marine and offshore systems and solutions, ABB will be bringing expertise in FPSO/Floating Storage Offloading (FSO) projects closer to customers in the expanding Asian market with the new engineering centre. ABB has expanded its Singapore presence since establishing a global Centre of Competence (CoC) for Marine Drilling Drives Systems here in 2005 with 15 engineers. The CoC now has 90 dedicated engineers, and revenue has risen more than four-fold over the last two years.

Rolls-Royce, the global power systems companies, announced that it would be relocating the global headquarters for its marine business to Singapore. Rolls-Royce's significant decision highlights Singapore's growing presence as a home for companies to manage and drive their global businesses. It also underlines

Rolls-Royce's long-term partnership with Singapore and the country's status as a hub for the marine industry.

In 2008 Rolls-Royce established a global head office for its Marine services operation in Singapore and today’s move builds on that progress. The new Marine headquarters will have global responsibility for business development, marketing and corporate services.

Shell has completed its largest, integrated refinery and petrochemicals hub, Shell Eastern Petrochemicals Complex (SEPC) project, in Singapore.Shell said that it designed the new facilities to maximize the benefits of locating refining and petrochemicals production within a single manufacturing hub on Bukom and Jurong islands, just off the Singapore coast. Jurong Island is a major petrochemical zone, which provides opportunities for further integration with current and potential customers, as well as in Shell’s own operations.Each of the new chemical production units started up as planned.

In addition, the project included modifications to the Shell Pulau Bukom Refinery, enabling it to process a range of crudes to supply feedstock to the cracker. A new ethylene jetty and cryogenic terminal enable the import and export of ethylene.

Peter Voser. CEO of Shell, has cited the project clearly demonstrates Shell’s strategy to focus on growth markets and to integrate oil and chemicals manufacturing to gain efficiencies. Creating Shell’s largest integrated site will bring considerable synergies in terms of feedstocks, operations and logistics.”

7. Outsourcing alignment

Outsourcing

An important process to getting some of the work process sub-contracting to specialists or dedicated organization which can perform the task in a better way or cheaper alternatives.

Three Common form of contract arrangement are used in oil & gas industry:

Individual Contract

EPCI (Engineering, Procurement, Construction & Installation) Contracts

Project Alliances.

Individual Contract

The operator is responsible for the defined scope of work as per contract. It covers the overall planning, execution, monitoring and delivery of the scope of work.

EPCI Contract

The operator is responsible for the defined scope of work as per contact. The operator is usually involved in the engineering phase, procurement, construction & installation phase of the work. Due to the magnitude of the work, the operator usually sub-contracted certain scope of the work to its contractors. Very commonly, the operator will have individual contract with each of its contractors and develop a project organization to handle the overall responsibility. The operator will monitor the performance of its contractors.

Project Alliance

In this scenario, a contractual relationship exists between the operator and its several contractors. This partnership provides a mutual sharing of risk, rewards and resources, skill and competencies. The operator here is acting the role of an equal partner. This is different from the previous contract form which the operator is having the customer role. These alliance methods unified the project organization.

Figure 1: 3 contract form commonly found in the oil and gas industry

Strategically Outsourcing innovation, using the most current technologies and management techniques, can put a company in sustainable leadership position. Leading companies have lowered innovation cost and risk 60 to 90%

while similarly decreasing cycle times and leveraging the impact of their internal investment by tens to hundreds of times. As it relief the main company from possessing additional resources, the company can be managed in a leaner and more effective ways. The main company might not have the profession or expertise in the particular process, research and development by the main company of the particular process might have to take years or million of dollars to achieve the completive edge. It make logical and innovation sense to outsource that particular process.

8. Current Outsourcing strategy for this case study

Let us take a look at the outsourcing process shown above. This is a typical outsourcing process in current market.

At the lowest tier lies the multiple manpower companies which needed to depend on this upper tier sub contractor to engage them. Typically, once they are engaged, the contract for their service will last about a year or more. They will provide the necessary manpower for the operation of the sub contractor. If they failed to get the contract, they will have to sit it out and get the next tender for the next operator project. That also means it is not viable to keep their resources of manpower abundant at all times as the wait might last to a year!

Training & Competency

This scenario raises an issue with training & competency of the manpower provided. Sub contractor are usually equipped with resources, supervisors and engineers. But they too cannot afford to maintain certain manpower resources. Due to the fact that they cannot afford to the manpower resource readily available, these manpower companies might suffer experience/ skilled manpower at the short notice even if they manages to get the job. This might leads to certain technical issues or schedule delay for the subcontractor.

Foreign workers levy

Since Mar 2010, Countries like Singapore had increase the foreign workers levy .This will brought about a decrease of foreign workers to be replace by local workers (which might be a big problem for countries like Singapore) or improve the technology to reduce the use of manpower.

This brought about an issue to manpower companies that supplied manpower to support the sub-contractors. They will not be willing keep these foreign workers for long or if they are not employed by the sub contractors

9. Launch Strategy: Implementation Plan (Shift in business model)

The above Search and select strategy clearly shows that there is lots of potential for Oil & Gas sub contracting in the Asia Pacific and in particular Singapore market. It is also clear that there are existing players in the services sector who are the established subcontractors. The number of projects exiting at one time in the market, as well as the cut throat competition, make it impossible for all the services sub contractors to be engaged at a single juncture. Logically, a manpower supplier would look forward to becoming a subcontractor. But our search and select procedure indicates if our Manpower contractor joins the bandwagon of the existing subcontractors, it would require heavy investments and competing with his present clients. Hence the following ground rules were laif to launch and implement the Paradigm innovation:

We would only take up the scope of work on a subcontract basis ( Lumpsum & Unit rate) from these subcontractors, since our company has already established relationships with these sub contractors.

We would only take up the quantum of scope, for which we have skilled manpower available.

Our company would provide the service based on a complete package ie piece meal job and would ensure the adherence to the project schedule. This would be accomplished using our own project planning & monitoring team, as well as our own site & safety supervision.

Company does not intend to take the scope of work directly from the M&E contractors. Doing this would mean we become competitors to our subcontractors.

Our company also intends to provide technical expertise to the Sub Contractors as part of the package ie all method statements, Inspection test plans, designs for the awarded scope of work.

Market analysis shows that this strategy would hold good for 5 to 7 years, before other companies start imitating the strategy and hence resulting in undercutting the pricing and create competition. Analysis and based on the Project market outlook for the next 5 years, our manpower company has decided to keep the target to reach a turnover of around 25 million Singapore dollars within the next 5 years with a profit contribution of approximately 17 %, using this innovative business strategy. These targets are based on the approximate EPC contract values of the projects coming up in next 5 years and average profit margins in sub contracting, taking into consideration the inflation, increase in manpower costs and expected competition.

10.Maintaining Competitive advantages

Companies strategy would be to further innovate in order to maintain the business way over 5 to 7 year period and hence the second phase of innovation would start 3 years after implementing the aforementioned strategy, by which time the market behavior and acceptance of this business model would have been proven. The second phase of innovation would include search & selection on the following signals in the market:

Establishing networks with the Sub Contractors including prebid agreements.

Establishing networks with the critical material suppliers and hence start a material supply division to cater to the same customer base.

Venturing in other countries like Indonesia, Malaysia, Thailand and Vietnam, where lots of projects are coming up in future. Since the existing client base would also be targeting the same projects, our company could provide similar services to them.

Memorandum of understanding with a Middle East based contractor working in the same field, looking at the feasibility of labor rotation between the two areas during lean periods and at the same time retaining the skills of the manpower.

11.Conclusion

Market analysis of the upcoming projects, availability of skilled manpower with the company and present networking with the sub contractors gives this paradigm innovation a very low risk profile. Analysis of competitors ( other manpower suppliers) Strength & Weaknesses have also revealed that it will take time for them to imitate this business model and hence the company has ample time to plan and implement its second phase of business model change.