Fluor and Their Competition in the Construction Industry Term Paper

Fluor and Their Competition in the Construction Industry

Business Strategy(s)/Strengths of Fluor

Company Information

Competitive Tactics/Strategy/Advantage-

Corporate Strategy-

Differentiation Strategy-

Executive Leadership-

Financial Leverage-

Industry/Industry Information

Market Position/Segmentation-

Strategic Decisions-

Porter's Five Strategies/Forces

Union Relations-

Outsourcing-

Business Strategy(s)/Strengths of Fluor

Fluor Corporation is seen as one of the largest and publicly owned organizations in the world. It is in the business of engineering, procurement, construction and maintenance of facilities for manufacturing organizations. As a company it operates through its subsidiaries and has become now one of the world's business leaders. It is able to provide very good expertise and technical knowledge during all phases of a project. The strength of the company is viewed by its customers as being able to provide the best possible solutions which are able to optimally use the assets of the customer. This helps the customers improve their competitive business position and provide greater successes to their business. Engineering News-Record magazine has been regularly placing the organization among the top three among the top design and build companies as also the top 400 contractors in the world. The organization operates all over the world and is engaged in many types of business, both traditional and newly developing.

Company Information

The company is over a hundred years old and operates through a number of subsidiaries. It is now a trusted business leader and is capable of providing very high quality expertise and technical knowledge for all parts of a project. The dependence of customers on Fluor is to provide solutions that use their assets most efficiently, and thus improve their position in the highly competitive world of today. This increases their business success. They are also viewed as one among the safest contractors in the world and their job is to develop, execute and maintain their construction projects on schedule and within the prescribed budgets, while giving excellent quality of work. It is today a large contracting organization and has a large number of workers with more that 30,000 employees situated in more than 25 countries and distributed over 6 continents. The solutions provided by these employees are cost effective and intelligent.

Due to their competence, these are also delivered in time. In the industry of building all over the world, these employees provide solutions which are of high dependability, expertise and safety. The quality of service that is provided has made Fluor an important leader in the world marketplace of building contractors. Due to their long established experience, the organization is capable of serving contractors in a wide field of industries and these industries include chemicals and petrochemicals, commercial and institutional, projects for different national governments, life sciences, manufacturing, microelectronics, mining, oil and gas, power, telecommunications and infrastructure for transportation. The long experience has given the organization a great reputation throughout the world.

Competitive Tactics/Strategy/Advantage

The company has earned itself a reputation as one of the safest contractors in the world, and the organization now build its future on development, execution and maintenance of capital projects on schedule. The company has earned a reputation for dependability, expertise and safety and this is what has given its greatest pre-eminence in the world market place. (About Fluor) The industries that it services are varied and consists of biotechnology, chemicals and petrochemicals, engineering, procurement, construction, operations and maintenance, project development and finance, project management, program management, staffing, commercial and institutional, equipment, government, gas processing, manufacturing, microelectronics, mining, offshore services, oil and gas production, petroleum refining, pharmaceuticals, power generation, telecommunication and transportation. They have a large number of projects in operation now, and among them are Biogen large scale manufacturing facility; EPT3 Project and AECI Lysine project in fine, specialty and intermediates; Yanpet Expansion Project and Jose Petrochemical Complex in ethylene and derivatives; Aromax Benzene and Cyclohexane in aromatics and derivatives; Carbon Fibers and Zytel in engineering plastics; Equate in utilities and offsite project; Aladdin Hotel and Casino, Four Seasons Resort, Great Exuma at Emerald Bay and Hot Springs convention center at entertainment centers; Pfizer Global development facility, Pemex gas and Criogenica plant as corporate offices; Federal Emergency Management Agency of the department of homeland security; Logistics Civil augmentation program for defense; among others. The full list is available at http://www.fluor.com/projects/projects.asp.The large presence in the industry is the main reason why the company is able to get many contracts as they have an experience in many types of operations.

Corporate Strategy

The global strategy of Fluor is to have major subsidiaries in select locations of Canada, Manila, New Delhi and Poland. These are all engineering operations and the location in these places permit Fluor to have cost efficient operations and get highly trained engineers. At the leading edge is of the procurement operations is EPC. This division of Fluor decides on the locations for its clients and also offers its services for the acquisition of the required sites. The location of sites is based not only on the feasibility for construction of the plant, but there is also evaluation of the location regarding cooperation from the government, and also the availability of workforce for the industries who would be coming into those areas. So far as construction side is concerned, Fluor has more than 50 construction divisions spread all over the world. These divisions build for projects not only within the country, but also for other locations in the world.

As the divisions are spread all over the world, the company has the choice to use the particular division which has the best capability for construction of the type required, and also keep the construction costs low. Another organization which assists in the construction is Fluor Daniel Wright Ltd. This is a subsidiary company which specializes in mining, mineral and metals engineering. This is also the technological center for procurement of special materials. The advantage of divesting into these companies and thus not concentrating only on their core competencies is now helping the organization. All these organizations are continuing to develop their core competencies and this makes all of them suitable as global competitors and gives Fluor a competitive advantage in their operations for the present and will also continue to assist them in future. The other important strategy that has been taken up is in the area of building human capital.

There are two organizations in Fluor which attend to this - Fluor signature Services and TRS Staffing Solutions Inc. It is stated on the Fluor website that these organization help in the maximization of Fluor's investment in people, processes and technology so that the company can deliver services with high quality as also cost effective. The second of these organizations is specialized in the placement of engineering, computer, technical, secretarial and clerical staffing. The organization clearly recognizes the importance of employees' growth and development and is viewed to be a key priority and thus supported by a wide range of programs. These take the form of online training courses and also specific development processes to match people with the opportunities and also gain valuable experience. Thus the attempt is not only to build human capital through different programs for learning, but also to place the developed individuals in the right place at the right time as this will give a mutual benefit to the employee and the company.

Differentiation Strategy

Another strategy which Fluor pursues in a manner from many other companies is to try for continuous increase of it business with the U.S. government. This is seen in their strategies acquiring of Trend Western to support the operation of Del-Jen Inc. which was acquired by Fluor in the beginning of 2003. The two organizations will be in a better position to respond to any desire of the federal government for total consolidation of the outsourcing of providers at the military bases. Now Trend western has become a wholly owned subsidiary of DJI and will be totally integrated within that organization. Trend western is based in Fullerton, California and provides logistics and base operations support to the different branches of the Department of Defense. The company has always maintained an excellent relationship with the air force, and to them they provide base supply, fuels, vehicle operations, vehicle maintenance, traffic management and contingency support services, both within United States as also in foreign countries.

From the other side, DJI provides services support in the areas of base operations and maintenance, engineering and construction and education and training. Trend western has expertise in logistics which will widen the existing skills in operations and maintenance of DJI, and the end result is expected to be better value for the clients. This had been happening in the contracts even earlier where in two out of eight cases where Trend Western is providing services, the two organizations are teamed together. One of the corporate strategies for Fluor is to grow and selectively diversify the business mix that it has in engineering, procurement, construction and maintenance. This is done through selective acquisition. In a period of eighteen months, Fluor has taken over DJI…