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In: Finance

Discuss the probable effects of the business strategies and financial performance of companies that are involved...

Discuss the probable effects of the business strategies and financial performance of companies that are involved in the construction-related industries.

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Expert Solution

­­­Business strategy and Financial Performance of construction related industries

Main objective of any business industry is to maximize business and enhance profit for this, businessmen prepare strategy. Business strategy was successful or not this is judged by financial performance of company. There are various type of business strategy adopted by companies like:-

  1. Enhance technical competency by research and development and take an edge over competitors.
  2. Aggressive marketing strategy to make its product popular and prime.
  3. Use Branding so that its product can be identified separately
  4. Expansion in different and various locations.
  5. Use different products and associated services.
  6. Provide after sale services
  7. Use of social networking
  8. Collaboration with other business (other than competitors)
  9. Use of advance and attractive technology for consumers.
  10. Others –Register in trade directories, create website etc.

Effect of these strategies over financial performance: -

  1. Enhancement of sales
  2. Increase of customer base
  3. Profit maximization
  4. Maximum Resources utilization
  5. Improved input output ratio
  6. Increase of key ratios like return to assets, return to capital etc.
  7. Easy loan availability and increased credit period.
  8. Easy dividend payments
  9. Less labor unrest.
  10. More capital involvement and others.

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