Aerated Concrete Industries, Co Case Study Example | Topics and Well Written Essays - 1000 words

Aerated Concrete Industries, Co - Case Study Example The chosen business organization is Aerated Concrete Industries, Co. which is engaged in the core business of production and manufacturing of light weight blocs and reinforced slabs.On the other hand, ACICO's subsidiaries are into contracting/construction, real estate development and/or investment and engineering consultant office. Because of the diversity of its business units, ACICO employs a corporate strategy centered on cost leadership.ACICO employs the expertise of its multiple sub-units in order to efficiently manage costs and enhance its expertise. It should be noted that there is a strong coordination among ACICO's business units which enable it to build skeleton houses in a relatively short period of three days. After purchasing land, the investment in real estate moves to develop the property. The engineering office processes the necessary permits and creates the design. Afterwards, the contracting unit takes over to begin and finish the construction. It can be seen that a ll the processes in real estate development and construction are all undertaken in-house. In fact, ACICO's competitive advantage is its capacity to undertake every process in the value chain efficiently enabling it to develop high quality housing at lower costs than competitors.Being engaged in a highly capital intensive business operation, ACICO profits through economies of scale. Its multiple sub-units enable it to spread its expenditures in advertisement and administration in order to minimize unit production cost. The company has also developed expertise in different each value chain process allowing it to create high quality products and provide excellent services. The three main strategies discussed above consistently diversify risks and keep consistent cash flow by generating income from different sources as well as financial engineering. 2. Translate the Strategies Identified into Strategic Tasks The broad strategies mentioned above are efficiently carried out by ACICO through its operations. Intensive growth is expected to be achieved by exploring suitable opportunities with aim to expand by enlarging the scale of operations of its existing business operations. Through diligent implementation of this intensive growth strategy, ACICO becomes successful in entering the Dubai, Saudi Arabian, Qatar markets with its Autoclaved Aerated Concrete plants and is currently working to penetrate the market and improve its market share by forging alliance with renowned local partners possessing who are proven market influences and share good local standing. This enables it to attain its objective of increasing shareholder wealth by expanding in core knowledgeable business. Integrative growth is undertaken through the implementation of backward, forward, and horizontal integration within the construction and real estate industry. Management intends exploiting the opportunities offered throughout this industry's value chain, which ultimately slows greater operating flexibility, reduces reliance on third party providers, deliver quality client service and offer competitive products to customers. This serves ACICO's objective of maximizing shareholder wealth by operating in all spheres of the construction and real estate value chain. The implementation of diversification growth strategy is intended to multiply growth prospects by focusing on profitable business ventures outside its core businesses. ACICO does this through a detailed mapping of the market prior to any decision to venture and is considered