Conclusion
Whilst KTech cannot influence the external factors affecting the construction industry, it is essential that it address the critical elements internal to the company. These are:
• Projected potential losses for the next 18 months and projected lack of cashflow;
• Lack of qualified and experienced production staff;
• Management procedures and systems still require adjustment to provide a workable structure and process suitable for growth into a large business.
THE PLAN
Objectives
The construction industry in Thailand is mature and competitive in the extreme. As a company listed on the Stock Exchange of Thailand, KTech is encumbered with compliance and regulatory costs that unlisted companies need not bear. As such, KTech must develop a strategy whereby it competes with like structured companies and not with smaller sized construction companies. To implement this successfully, KTech must develop a reputation for completing projects on time, in budget and of above average quality.
Critical Constraints
In preparing the strategy, there are three critical constraints to be considered:
• Fund Shortage
o The current shareholders have stated an unwillingness to invest any additional money into the company;
o The capital markets are depressed such that additional investment by way of rights offering, private placement and the like will be unsuccessful;
o The credit markets are restricted such that credit lines offered by financial institutions are likely to be limited in value and subject to project performance, not available for general use.
• Market Availability
o The major shareholder has issued an edict that KTech business is to be restricted to two markets only – Thailand and Myanmar, and that Indian clients cannot form part of the company’s client base (historically Indian clients represented a significant number of KTech clients). Thailand’s market is in parlous state and currently there is a hiatus in investment in Myanmar as investors await the outcome of the general elections in November 2015.