Development of management strategy for small company in a growing economy


Development of management strategy for small company in a growing economy


Nowadays technologies are growing so fast that if we will not be able to adopt them in time, than our company becomes non-competitive. This project was done with an aim to apply gained knowledge’s in engineering and management course, to analyse how selected firm can be developed from engineering and management sides. Engineering studies will help from the one hand to apply engineering knowledge’s, but from the other hand to get known new technologies and how they make our life better.

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Universities experience in management and marketing studies will help to do analyses of rival companies and make clear how company’s management can be improved or adopted from existing successful companies.

There are two important processes in building construction, foundation and roof. Both constructions are equally important for building wellbeing. Foundation need to be designed and build up right in the beginning of construction, but roof need to be carry during all buildings life period. It means that roofs are every sequenced time of period that depends on material, need to be overlaid or repaired. On this theory was born project’s engineering part. For project’s object was selected a construction firm that focused on roof construction, its technologies and sheet metal works.

By exploring roofing market will be determined its growing technologies with an aim to adopt them to selected firm. Exploring major roofing companies management, will help to improve chosen firm current way of management.

Generally this project is based on roof technologies, management marketing research. Gained experience will be applied to chosen firm development in all directions.


Develop management strategy for a small company.


1. Literature review of management prescriptive strategy development:

* Analysis of environment

* Analysis of resources

* Development of company’s vision, mission and objective

* Types of management strategies

2. Choose a company with an aim to apply management strategy

3. Literature review of chosen company

4. Develop management strategy to the chosen company

5. Develop additional management improvements

6. Conclusion

Strategic Management

Essence of Strategic Management

According to the Emergent view there are strategist that suggest that it is hard to predict future and strategy need to be more dynamic with an element of risk.

The Prescriptive view Strategic management is about defining a purpose and plans of organisation and work out the actions to achieve desired purposes. The essence of Strategic Management consist from two levels that are shown in Figure 1 and described below :

* General corporate level – Decision making process depends from in what type of business company belong. The leadership and culture of corporation are very important strategy management.

* Individual business level – Decision making process generally based on competing for customers, generating value from tangible and intangible business resources and focus on resources that can bring competitive advantage. Strategy is about relations of internal capabilities and external relationships.

Figure 1 Essence of Strategic Management (Lynch, p5, 2010)

(Lynch, p5, 2010)

Approaches to Strategic Management

There are exist two different approaches to strategy: Prescriptive and Emergent approach.

The prescriptive approach

Approach is based on idea that future is predictable and strategy development begins from “Where-we-are now” and all objectives and steps how implement ideas are developed. The prescriptive theory have three core areas: Strategic analysis, Strategic development and Strategy implementation. All three areas are closely related sequentially. The prescriptive strategy development process shown in Figure 2.

Figure 2 The prescriptive strategic process (Lynch, p19, 2010)

The emergent approach

Approach is based on view that strategy emerges and developed during further period of time based on unpredictable environment. The final objective of emergent approach is unclear and objectives are developed during its realisation. Strategic analysis, Strategic development and Strategy implementation are interrelated. But because strategy is implemented by improvisation and allow mistakes, it is not need to make clear distinction in development and implementation phases. The prescriptive strategy development process shown in Figure 3.

Figure 3 The emergent strategic process (Lynch, p19, 2010)

Analysis of Environment

Analysis of environment is a research of everything and everyone in external environment. It includes suppliers, customers, competitors, government, technologies etc. There are exist nine different tools how environment can be analysed and they are shown in Figure 4.

Figure 4. Environment analysis tools (Lynch, p74, 2010)

Environment basics

There are three basic things that should be analysed:

* Market definition and size – Question need to be asked in this area is “What is the size of market?”. It is important to know market size because it will help to design strategy objectives. Market size usually shown in annual sales.

· Market growth – After establishing market definition and size need to evaluate how much the market has grown in particular period of time, usually in a year. Market growth rate will influence strategy objectives. Organization that would like to grow quickly will be interested in fast growing market

· Market share – It can be defined as ratio of all sales in a market that is detained by particular company. There are different ways how market share can be measured, but most important of them are “Sales revenue” and “Sales volume”. (tutor2u)

(Lynch, p79, 2010)

Degree of turbulence

It is important to evaluate external conditions of organisation, specially dynamic of environment. In strategy environment will have high degree of turbulence it will be hard to apply analytical techniques. Environmental forces that influence organisation:

* Changeability – Degree of environment changeability that shows rate how external factors likely to change. Changeability splits further in such factors:

o Complexity – Degree of complexity of such factors as internationalisation, technological, social and political.

o Novelty – Degree of how often new situations influence environment.

* Predictability – Degree of how changeable environment is predictable. Predictability is subdivided in two categories:

o Rate of change – How fast environment changes. Usually rated from slow to fast.

o Visibility of future – Based on previous experience determine how predictable is future.

Figure 5. Dynamics of environment. (Lynch, p81, 2010)

After doing analysis of factors above will be possible see how stable will be strategy for particular environment. In predictable environment with low turbulence can be used prescriptive approach. In case of high turbulence better to use Emergent approach because of high rate of change where designed objectives can lose their value in short period of time.

PESTEL analysis

PESTEL is checklist type analysis that is widely used to analyse environment in different directions. Analysis rely on past experience and events that after listing can be used to forecast future or apply them on company improvement design. Factors that need to be discovered in PESTEL analysis:

· Political:

o Government policy

o Regulations

· Economical

o World trends


o Inflation

o Unemployment

o Energy costs

· Social

o Changes in lifestyle

o Demographic

o Customer demand

o Population

o Culture

· Technological

o Patents and products

o Technology development

o Speed and change of technologies

o Innovations

· Environmental

o Public opinion

o Green issues

o Recyclability

o Renewable energy

· Legacy

o Law

o Health and Safety

(Lynch, p82, 2010)

Industry life cycle

Entity of strategy will change as company move from one life cycle phase to another. In the Introduction phase, company try to attract interest in new product. As product became more recognizable and increase in demand than industry moves into next phase called Growth and with demand increase amount of competitors. Over time when market is saturated and most customers are satisfied with product life cycle proceed to Maturity phase where growth is slowed down. Few competitors may join in this phase, but hard to survive because of high competition. After Maturity phase cycle start to Decline. Whole process is shown in Figure 6.

Figure 6. Stages of industry cycle. (Lynch, p87, 2010)

Company have more opportunity to survive and gain more profit in life cycle early ages while entry barriers are low and there are only few competitors. But it is hard to determine the beginning of life cycle because if its unpredictable duration.

(Lynch, p87, 2010)

Key factors for success

The Japanese strategist Kenichi Ohmae argue that for successful strategy organisation should define key factors for success that will help to define objectives more correctly. Key factors are resources such as skills, labour, experience or attributes that can bring competitive advantage to organisation. Key factors can be determined not only from internal advantages but also designed based on external environment. There are three factors need to be analysed:

· Customers – What exactly customers want? Who are they? Are there any special segments? Why they buy from us? Need to be evaluated (Lynch, p95, 2010):

o Price

o Service

o Product or service reliability

o Quality

o Technical specification

o Branding

· Competition – What factors help company to compete successfully? Who are our competitors? What factors influence competition? Need to be evaluated (Lynch, p95, 2010):

o Cost comparison

o Price comparison

o Quality issues

o Market dominance

o Service

o Distributors

· Corporation – Companies technologies, organisational ability and marketing? Key resources of our competitors? Need to be evaluated (Lynch, p96, 2010):

o Low-cost operations

o Economies of scale

o Labour costs

o Production output levels

o Quality operations

o Innovative ability

o Labour/Management relations

o Technologies and copyright

o Skills

(Lynch, p94, 2010):

Porters five forces

One of the most important organisation analysis that need to be performed is evaluating environment forces that influence particular company. Such evaluation will help to gain better competitive advantage than rivals. Professor Michael Porter provide model (Figure 7) that helps evaluate forces that will help to understand organisation opportunities.

Figure 7. Porters five forces model (Lynch, p95, 2010)

The bargaining power of suppliers – Every organisation require raw materials to produce product or service it mean that organisation depend from raw material suppliers. There are shown how suppliers can influence organisation:

* If there are few suppliers it means that it is hard to switch to another supplier in case supplier is exert its power.

* There are no substitute raw materials that supplier provide.

* Organisation costs depend from suppliers price. If supplier increase price for provided material than costs will increase and organisation need decide: increase product price or not. Increased price can lead to lose of competitive advantage but if price stay the same that profit will be smaller.

The bargaining power of buyers – To make a profit organisation sell their products or service to customers. Every customer have need, wants and own opinion about particular product. Organisation should make customer power analysis to understand who have more influence over other. There are some issues:

* There are only few buyers. Organisation have weak position and generally depend from customers and want to attract them as more as possible. In this case customers can easily influence organisation.

* Product or service is undifferentiated. Customer can easily switch to product offered from other organisation.

The threat of new entrants – Entrance of new rivals is possible whet profit margins are attractive and entry barriers are low. Porter argue that there are seven factors that influence entry barriers:

1. Economies of scale – Production cost are reducing when product volume significantly increased. These cost reductions provide entry barriers, because company entered in such market forced to keep small price to be competitive.

2. Product differentiation – Brand, level of service, attracted customers provide entry barrier because by entering in such market will lead to spend extra funds and time to make new brand more recognizable and establish in the market.

3. Capital requirements – Entrance in some markets require investment in technologies equipment, distribution etc.

4. Switching costs – When customer is satisfied with provided service or product he is not thinking about other products and it is hard and require high investments to influence customers opinion.

5. Access to distribution channels – Production need to be effectively distributed. It takes long time to establish own distribution channels and make it work profitably.

6. Cost disadvantages independent of scale – Already established companies invested hardly in infrastructure and gained mayor buyers in the market. It becomes hard for new company to find what to start with, because infrastructure is already established and it is hard to involve changes.

7. Government policy – Government tend to secure local companies and publish law that defend them.

The threats of substitutes – Substitutes is something that can replace a product or service usually provided for smaller price. Things that need to be analysed relative to substitutes:

* Customer ability to switch to the substitute

* The possible threat of obsolescence

* What costs will provide switching to substitute

Rivalry among existing firms – Some markets and companies are more competitive than others. There are thing that need to be analysed (Model of competition):

* Number of competitors

* Size of competitors

* Growth rate

* Product differentiation

(Lynch, p97-101, 2010):

Four links analysis

Most organisations links together to perform better with other companies help. Co-operation can lead such factors:

* Reduce costs

* Increase organisations sustainability

* Open new market sectors

The Co-operation usually divided in four subgroups that help more clearly define co-operation type and how it might be improved:

· Informal co-operative links and networks – The organisation links and co-operates together on mutual basis without contract. The analysis need to be made to find out what opportunities will provide such link. Usually analysis contain from strengths and weaknesses. Need to pay attention by forming mutual contract because in case fraud it will be hard to prove that particular company is right.

· Formal co-operative links – Formal co-operation is linked with legal contract. The difference from informal co-operation is in degree of formality. Such links usually form alliance or joint ventures that works together for many years to gain competitive advantage over rivals and take more market share.

· Complementors – The Complementors are companies that supply products that add value to final product. Usually such co-operation is based on several companies that provide different skills and resources that work together on manufacturing of one product. Such organisations have interdependence between themselves.

· Government links and networks – The organisations that have linkage with government.

(Lynch, p102-105, 2010)

Competitor analysis

In most markets there are more than one competitor. It is hard to evaluate each of them and because usually it is done by taking few companies and making narrow evaluation. It will help to understand what advantages and disadvantages compare to organisation rivals have. Broad analysis of competitors and their power helps to find their forces. Basic analysis will consist from making competitor profile based on such issues:

· Objective – An analysis of competitors objectives help to forecast its strategy. If competitor tend to gain market share then probably will start to implement aggressive strategy. If seeking profit growth than possibly competitor will invest hardly in new plant or improve technologies. Every objective can help to forecast rivals action. Companies annual statements can be useful in evaluating but need to be analysed wit attention because of factor of bluffing.

· Resources – The type, size and amount of resources that provide competitive advantage to company need to be analysed.

· Past record of performance – Can provide company’s successful performance that can be adopted.

· Current products and services –

· Links with other organisations – Evaluate links, alliances and other types of co-operation than deliver competitive advantage.

· Present strategies – Innovation, customers, investments, market share, product range etc. Evaluate how such things used for strategy purposes.

Customer analysis

Customer is crucial resource of company profit income. Any company will always be interested in as more as possible customer attraction. There are measurements that can be used in customer analysis:

* Identification of the customer and market

* Market segmentation and its strategic implications

* The role of customers service and quality

Previously market was based on “Mass marketing” theory where one product was sold to all customers. Nowadays is used “Targeted marketing” where company aims on particular market segment and provide product or service only for this segment. Market segmentation can deliver more opportunities to strategy:

* Particular segments can be more profitable than others

* Some segments can have less competitors that can provide competitive advantage

* Some segments can have higher growing rate.

(Lynch, p107-108, 2010)

Analysis of resources and capabilities

Analysis of resources and capabilities gives not only opportunity to look how resources provide competitive advantage but also help understand two important things:

* How resources can provide higher profit and better service

* Which resources provide competitive advantage and how they can they be improved all time.

There are two way that goes interdependent: Value added and Sustainable competitive advantage (Figure 8).

Path of resource analysis (Lynch, p119, 2010)

Resources and Capabilities

Resources and capabilities analysis aim is to recognize where is value added resources and explore what resources deliver competitive advantage to company. There are four questions need to be addressed to company with regard to resources and capability analysis (Lynch, p122, 2010):

1. What kind of resources and capabilities company own?

2. Why organisation have these resources?

3. Why they are important and what advantage they deliver to company?

4. How they can be improved?

Figure 9 Sequence of resources and capabilities analysis (Lynch, p122, 2010)

Analysis of resources and capabilities starts with full range analysis of resources. It is hard because of some resources are hard to measure. Resources and capabilities can be divided in three categories (Lynch, p123, 2010):

· Tangible resources – Are physical resources that contribute to companies value added. These can be modern equipment, location, etc.

· Intangible resources – Resources that have no physical presence. It can be companies recognisable brand name, culture, skills level etc.

· Organisational capabilities – Such resources as management or leadership that manage tangible and intangible resources.

Value added

The role of resources in company is to add value and gain profit. The value adding process shown in Figure 10 and can be defined as the difference between product output price and the costs of input.

Figure 10. Add Value process (Lynch, p130, 2010)

The Value chain

The value chain is a value of all activities that is linked with functional parts. Each part makes contribution in value add process. Company perform two types of activity that add value to product or service: Primary activities and support activities. Primary is activities that process itself. Support activities are performed by management and human resources. Porter designed company’s value chain process that is shown in Figure 11. Where “margin” is difference between Total Value and Cost of performance

Figure 11. The value chain (Lynch, p132, 2010)

The primary activities add value to company by its own way and they are(Lynch, p132-133, 2010):

· Inbound logistics – The areas that related to receiving raw materials and goods from suppliers, storing them till they will be required, moving and carrying within company.

· Operations – The production area where products or services being produced.

· Outbound logistics – The distribution of final product to customers. It is about transportation, warehousing, wrapping etc.

· Marketing and sales – Analysis of customers needs and wants and deliver to customers information about what product or service company offer.

· Service – It is about before product selling pre installation or after selling service.

The support activities:

· Procurement – The person or department that is responsible for purchasing raw materials or goods. The goods need to be purchased for as low as possible price and highest quality.

· Technology development – The important are that need to be updated all the time.

· Human resource management – Training, recruitment, management improvement, employees motivation is important for companies success.

· Firm infrastructure – Background planning and control of system.

The value system

Every company have own value chain and at the same time belong to wide system that involve supply and distribution chain and customers chain. The competitive advantage can deliver suppliers that supply better goods to you rather than rival organisations. The value chain need to be evaluated and improved.

Sources of competitive advantage (Lynch, p147, 2010):

* Differentiation – The development of exclusive feature or service that could appeal particular market.

* Low costs – Development of low cost product or service can attract more customers.

* Niche marketing – Concentration on particular market and distinguish and provide all necessary to appeal customers from this market.

* High performance or technology – Improved performance and customers needs satisfaction better than competitors will provide growth in the market share.

· Quality – Provide quality that competitors not able to match.

* Service – Provide service that competitors not able to match.

* Vertical integration – The backward acquisition of raw material suppliers can increate competitive advantage.

* Synergy – The combination a parts of business that together could deliver better result success and profit than separate.

* Culture leadership and style of an organisation – The way how company is organised and managed. The good managed company will lead to employees satisfaction and improve their attitude to company. It will improve service, quality and deliver good environment for innovation.

Resource based sustainable competitive advantage

There are seven resource elements that can deliver sustainable competitive advantage:

· Prior or acquired resources – Easier to create value on already available to company strengths rather than start from beginning.

· Innovative capability – The innovation is important because it can deliver competitive advantage and improve entity.

· Being truly competitive – Identify resources strength and opportunity is not enough because they need to be comparatively better than competitors as well.

· Sustainability – Resources are more competitive if they don’t have and cannot be substituted.

· Appropriability – Resources must deliver success only to individual company, but not shared among others.

· Durability – Good resources should last as long as possible. There is no reason to identify a competitive resources if they are not sustainable.

· Imitiability – Resources should be hard to imitate.

Defined resources need to be classified in hierarchy of resources (Figure 12) by their importance and delivered competitive advantage.

Figure 12 Hierarchy of resources (Lynch, p151, 2010)

Improving competitive advantage

There are three methods how resources and capabilities can be improved (Lynch, p158-160, 2010):

* Benchmarking – Compare practice and experience with other companies and identify what improvements can be performed. The compared industry can be perform another kind of job, need to be copied only companies principles of operation.

* Leveraging – Exploit companies resources fully. That method can be subdivided in 5 prescriptive routes:

1. Concentration – Focusing company’s resources on the key objectives.

2. Conservation – Exploit every resource or aspect available to company.

3. Accumulation – Evaluate fully resources of company and use it where appropriate.

4. Complementarity – Analyse resources with an aim to combine them. New combination can deliver competitive advantage.

5. Recovery – Make sure that all resources generate produce as quickly as possible.

* Upgrading resources – The resource analysis can show that an organisation is losing its competitive advantage, so resources and technologies need to upgraded.

Vision, Mission and objective of the company.

Strategy purpose is explored by established mission and objectives of company. To identify mission and objective need to be evaluated why company exist and how value adding can be generated? Additionally need to be explored company’s vision based on opportunities and how it can be evaluated.

The purpose of the organisation

The purposes of organisation need to be defined clearly otherwise it will be hard to establish proper strategy. To define purpose more clearly need to be considered six questions (Lynch, p221-226, 2010):

1. What is our activity and what should it be?

· Need to be considered the area of activity – is it business or non-profit organisation?

· Evaluate what company is focused on – should company concentrate on the purpose or it can be broad?

· Do company focuses on profit or diversifying? That issue can be defined broad or narrow.

· Usually strategists define purposes based on the competitive resources of company.

2. What kind of organisation do we wish to be?

· The company usually chose one of two areas:

o Culture and style – Organisations chose this area based on previous experience and developed history.

o Challenges to be posed to members of the organisation.

3. What is relative importance of shareholders and stakeholders?

· Some companies purpose is to satisfy shareholders wealth.

4. Do we want to grow organisation?

· Is company growth is included in purpose or it should stay the same size?

5. What is our relationship with our immediate environment and with society in general?

· The purpose need to be considered with environment within which company perform. In immediate environment need to be assumed such factors as turbulence, competition etc. Society in general is about pressures that influence company.

6. How do we bring all these consideration together?

· The summary of purposes need to be stated in few sentences that will specifically describe.

Vision for the future

It is imagination of company that stakeholders, shareholders or owned would like to see it after a period of time. There are two views on the values that need to be explored to develop a strategy:

* The irrelevance of strategic vision – For approaching short-term goals – strategic vision can be not performed.

* The value of strategic vision – “Vision is a challenging and imaginative picture of the future role and objectives of an organisation, significantly going beyond its current environment and competitive position” (Lynch, p227, 2010). There are a lot of reasons to develop a strategic vision and most important is that the vision is going far in future than organisation is and help to develop purposes how to get there. New vision can help to develop mission and objectives.

The mission

“The mission of an organisation outlines the broad directions that it should and will follow and briefly summarises the reasoning and value that lie behind it” (Lynch, p236, 2010). The mission need to be defined based on previously explored purposes. In prescriptive strategy mission is set to be realised in next few years. The role of mission is to develop direction which company will follow and try to realise. There are five elements of the mission statement that need to be explored and chosen appropriate:

1. Explore the nature of the company. In this case can be asked such questions as “What business are company in?” and “What is desired business for company?”

2. The mission should be developed from customers point of view rather than company’s.

3. The mission should show the basic values and beliefs of the company.

4. The elements of sustainable competitive advantages need to be shown in the mission.

5. The mission need to show the particular reason for its choice to realise.

The objectives

Objectives are the aims that need to be realised to implement the mission. This process cover what and when is need to be done. In most cases objectives should be quantified and measurable, but sometimes such objectives as ethic, employee or customer satisfaction is hard to measure. Company should apply any measurements to hard measurable objectives with an aim to get a feedback how successfully they implemented. Usually companies set objectives in two areas:

1. Financial objectives – Such as profit, cash flow, earnings per share etc.

2. Strategic objectives – Such as customer satisfaction, market share, product quality etc.

(Lynch, p242, 2010).

Strategy options development

When the purpose of company is defined need to develop a strategy options how to achieve it. After options development need to chose more suitable and that will bring advantage.

SWOT analysis

As a starting point of strategy options development can be summarising current position using SWOT analysis. SWOT is analysis that helps to find company’s internal Strengths and Weaknesses, and external Opportunities and Threats.

There are some factors that can lead to enhance the quality of the analysis:

* Make a brief description of each idea in bullet point style

* Relate internal factors (Strengths and Weaknesses) to the company’s key factors for success.

* Internal factors need to be defined in competitive terms, where possible.

* Analysis should show the realistic gap between “Where are we now?” and (Where are we want to be?).

(Lynch, p302-303, 2010).

Environment based options: Generic strategies

The generic strategies involve three basic strategic options of differentiation, cost leadership and focus that is open to any business. The theory argue that every company need to choose one of the options to gain successful competitive advantage. All three options can be explained based on two aspects:

1. The source of competitive advantage – There are two sources of competitive advantage. These are Low costs and differentiation.

2. The competitive scope of the target customers – It is possible to focus on the broad target or on the narrow target.

Figure 13 Generic strategic options (Lynch, p304, 2010).

Low-cost leadership

Is an industry that has built and maintain plants, work, labour costs and equipment that provide the lowest costs in particular market or industry. Competitive advantage to the such company brings low cost production and distribution. In practice, such company eliminates all procedures that do not add value to the product in a value chain that helps to reduce product price.


Product differentiation gives opportunity to charge a price that is higher than average in the market. Organisation is identifying the group of potential customers that can respond differently. Some customers can pay more for the products that are aimed on their needs or wants. Porter argue that price of differentiated product should be higher than ordinary, for example, to advertise it. Differentiation strategy can lead to two problems:

1. It is difficult to forecast that will the differentiation costs be recovered by charging customers higher price.

2. The successful differentiation can lead to competitors attraction that can easily copy product or service and enter the market.

Focus strategy

A focus strategy is when company is focused on a specific niche and provide product or service that is developed for particular market segment. By targeting on particular market segment, company can gain higher profit by charging an extra price for specially provided quality.

Environment based options: The market option matrix

The market option matrix shows the product and market options that are available for company. Matrix shows not only possibility of launching new product but also explores ways of withdrawing from the market with an aim to move into unrelated market segments. The market segment type is based on product/market options that is shown in Figure 14.

Figure 14 Market options matrix (Lynch, p304, 2010).


There are some reasons why companies withdrawing from the market:

* To avoid profit losses when product or service life time is declining.

* Overextension of the product on the market.

* Raise funds with an aim to invest them elsewhere.


The demerging is one of the way of withdrawn from the market that also have positive impact. For example demerger companies shares can cost more merged. This strategy is used to increase underlying asset value of the company.


It is about privatise government owned companies.

Market penetration

This option involve a customer attraction directly from competing market. It can be performed by offering better quality products or higher level of service along the promotional activity. It will be expensive in short term, but in long run it deliver benefits. It is more easier to penetrate a growing market, because most customers could be still searching for the most suitable product.

Market developments

In this option company moves beyond its immediate customers to attract new potential customers for existing product or service. Company is looking of new ways of exploitation of existing product, new geographical areas and development of new segments.

Product development

The product development aim is to develop significantly new product in existing market. There are some reasons that could justify this option (Lynch, p316, 2010).:

* To utilise excess production capacity

* To exploit new technology

* To maintain the company’s position as a product innovator

Diversification: related markets

When company choose diversification strategy is goes out of its present market and product into new segment. It is high risk to make a step into unknown market, but it can be minimised by moving into related market. There are three types of diversification of related markets:

1. Forward integration – The company start to be involved in its outputs, such as distribution, logistics and transport.

2. Backward integration – The company start to be involved in its inputs, such as raw material supply, plant and machinery.

3. Horizontal integration – The company start to be involved in areas that are closely related to its existing activities.

Diversification: unrelated markets

The high risk is provided when company wants to move into unrelated markets, because of lack particular knowledge and experience in new area.

(Lynch, p313-318, 2010)

Environment based options: The expansion method matrix

The expansion method matrix shows the methods by which the market opportunities related with strategy can be achieved. The company’s internal and external expansion opportunities appraisal can be established methods how company can be expanded. In addition it is important to examine the methods how expansion can be achieved.

Figure 15 Expansion method matrix (Lynch, p319, 2010)


The reasons for such method of market expansion is associated with especial assets of the company that represents the reasons for acquisition: Market share, Core competencies, Brand and required technologies. Acquisition can be performed in competitive reasons. For example, in a static market it can take more time and high costs to enter the market from beginning.


Mergers seems the same to acquisition in sense of two companies unite. The difference is that in acquisition one company acquire another, but mergers is more about combining two companies to be more competitive over rivals.

Joint ventures and alliances

A joint venture is the creation of a company whose shares are owned by two parent companies. Such joints is made to attack competitors.


A franchise is a licensing agreement where contractor provides permit with a pre-formed package of activity. Usually it is a brand name, technology, technical service and advertising assistance.

Resource based options: The value chain

The development of strategy is based on resources that company possess.

Identifying sources of value added: upstream and downstream

Value can be added early and later to the product. Detecting how and when value is added will help to generate strategic option.

* Upstream activities – Activities that add value to the product in the beginning. To add value in this period company should acquire raw materials in large amount for less price and involve changes and innovations in production that will reduce it costs.

* Downstream activities – Activities that add value to the product in later procedures. Such activities can rely on differentiated products where can be charged extra costs. Downstream value is also can be added by patenting, advertising, market positioning and development.

Resource based options : The resource based view

The identification of most important resources that bring competitive advantage will be the start of developing of strategic options.

Finding resource based options: architecture , reputation and innovation

The resource based view argues that company should have an distinctiveness over competitors. The option development can be made based on some kind of test of resources against the criteria or innovation, architecture and reputation. This test will show on what resources company should focus further.

Finding resource based options-core competencies

Core competencies are the group of skills and technologies that can enable an company to provide a particular benefit to customers. Options that don’t provide a core competencies provide less contribution into strategy. There is one way to generate strategic options on core competencies, is to build a “hierarchy of competencies”, starting from down where is low individual skills and rise through the whole organisation to the top where are highly skilled individualities.

Strategic options based on the resource based view

There are no detailed structures how to perform examination of resource based view because all companies are different and there no fully similar company in the world. Hence it is need to inspect every area of the company for its resources with an aim to find which areas deliver competitive advantage and which are contribution to value added. There is designed checklist in Figure 16 that can be applied to the most companies.

Figure 16 Resource checklist (Lynch, p329, 2010)

Resource based options: cost reduction

The company as an option also should think about cutting its operation in order to reduce costs. There are main routes that can be used for cost reduction:

Designing in cost reduction

In some industries cost reductions can be made before product reach the factory. It can be gained by more carefully designing a product and simplifying that can lead to time and cost reduction.

Supplier relationship

Negotiation with supplier about lowering product or raw material price. That can be realised in one of two ways:

* Closer relationship with supplier

* More distant relationship with supplier

Economies of scale and scope

Economies of scope is an extra cost savings that can be obtained when separate products sharing some facilities.

Economies of scale is an extra cost savings that can be obtained by higher volume production. Economies of scale are available out of production as well:

* Research and development

* Marketing – In case of massive order large companies can demand discount from media.

* Distribution – Loads can be grouped and stored more effectively and specially designed routes between fixed destinations can reduce costs.

The experience curve

Gained experience and knowledge can involve an ideas how to reduce costs. It is relationship between unit cost and total amount of unit ever produced and showed graphically in Figure 17.

Figure 17 The relation of experience with cost lowering (Lynch, p333, 2010)

The experience curve involve such things as:

* Technical progress

* Greater learning about production

* Greater experience and skills by doing particular process for a long time

Capacity utilisation

It is a level of plant and production technology in operation that is shown in percentage of produced goods on particular plant.

General roof technologies

Roof starts from its support construction that depends on roof material used further. There are three common used materials for support construction: timber, metal and concrete (Chudley, p214, 1999). After supports are constructed properly, roof design can be developed.

Before starting roof construction, need to be decided the pitch and type of roof that should to be stable in different factors (Chudley, p213, 1999):

* Protect from wind, snow, rain and dust.

* Avoid heat loss during cold period of time (winter).

* Keep construction in cool environment in hot period of time(summer).

* Protect from all stresses impact.

* Avoid damage due cyclical humidity and temperature change.

* Protect walls.

* Avoid penetration and spread of fire.

The roof framework

Chapter is based on (Seeley, p130, 1995)

Framework need to be relatively strong to be able to carry in own weight, weight of roof material and superimposed weight such as human, snow, rain and ice. Additional roof loads are specified by BS 6399-3:1988. The roofing coverage need to able resist such unsafe conditions as atmospheric pollution. By choosing roof need to be assumed wind pressure by BS 6399-2:1997 standards. The highest wind suction perform on slopes below 15, lowest at 30 degrees, and the highest suction areas are roof edges. High wind can provide pressure that will exceed the weight of roofing material and can tear roof away.

Decking materials

Before roof laying need to be designed and chosen decking material. Decking material depends from roof type and specification. Usually this specification is given in standards or provided with material.


Based on (Chudley, p214, 1999)

Generally used to make lathing for roof. Also can be used to produce softwood boarding, plywood, oriented strand board or chipboard. Roof timber decking need to be designed based on standards BS 5628:2006 or requirement provided from chosen material manufacturer. Chosen timber should be durable and antiseptized against fungal and insects. Additionally ventilation need to be provided to avoid decking moisture that can result fungal attack. Joist should be at least 19 thick mm, planed and properly nailed. Joining of timber to support or wall need to be fixed accurately that allow decking movement, and space for ventilation need be made between decking base and wall.

Wood wool slabs

Based on (Chudley, p214, 1999)

Slab should be produced in compliance with BS 1105:1981, that will provide quality and strength in 1,200 mm span with a various length and 610 mm wideness. Thickness of slab should exceed 50 mm. To avoid threat of condensation need to be applied suitable insulation over slabs with a vapour control layer. Joining of slab to support or wall need to be fixed accurately that allow decking movement, and space for ventilation need be made between decking base and wall.

Compressed straw slabs

Based on (Chudley, p214, 1999)

Made for a standard size 1,200 x 2,400 x 58 mm, using patent method by heat and pressure selected straws. This size and technology gives sufficient strength to slab to 600 mm span.


Plywood roof decks need to be produced with accordance of BS 5268:2006. Decks can have squared form or tongued and grooved. All joints should be on the centre line of supporting joist only. If it is not feasible, than additional support need to be added under joining. Sheets need to fixed using shank nails at 300 mm centres. There are two shapes plywood decks made: tongued and grooved or square edged. Plywood decks rigidity depends on ply grain direction. Before sheets installation they need to be checked on moisture content. Best content of moisture is 14% – 18%. Greater than 18% sheets, should not be laid. During construction plywood base need to be protected from rain, to avoid moisture increase. In case plywood affected by moisture, sheet fixing need to delayed to let dry.

Profiled metal decking

Profiled metal decking need to be designed and constructed in accordance with BS 6229:2003. Allowed permissible deflection for metal decking is 1/325. Before laying mastic asphalt, decking need to be laid with additional rigid sheet layer to secure decking profile.

Material and slope of the roof must be considered. Usually material selection depends from roof pitch. As example we can assume that plain tiles must be installed on slope more than 40 degrees.

By fire regulations roof need to resist the spread fire to other buildings and over the roof. In this case materials, chosen for roof cladding, need to be approved by regulation (BS 476).

There are a lot of different roof types available in the market and choice depends from different factors.

Roof insulation

This chapter is based on (Attic Ventilation, 2009)

Roof insulation is important for buildings environment, because it is operate to avoid heat looses and help building save comfort environment. In summer insulation protect building from hot weather, that helps to reduce costs for building cooling. But in winter help to prevent heat looses. Good insulated roof can assist with moisture elimination, condensation and lead soundproofing qualities. The way how roof insulation perform is shown in Figure 18.

Figure 18. Roof insulation (Attic Ventilation, 2009)

Exist different types of roof insulation, and choice depends from type and gradient of roof and required insulation level. Insulation ability can be determined by looking at their R-value, coefficient which shows resistance to heat flow. The higher coefficient will lead to higher level of insulation.

Generally insulation splits in two main categories: bulk and reflective.

Bulk insulation

McGee and Mosher argue that bulk insulation can prevent the transfer of conducted heat, relying on blocked air in structure. That structure have bad conductivity (Figure 19), that helps to avoid temperature change and help to keep desired environment.

Figure 19. Bulk insulation performance (McGee and Mosher)

All types of bulk insulation are shown in Figure 20.

Figure 20. Bulk insulation types (McGee and Mosher).

Reflective insulation

Chapter is based on McGee and Mosher.

Reflective insulation have low absorption and high reflectivity that helps to refuse radiant heat flow. It relies on occurrence of an at least 25 mm air layer, between insulator and source of heat. Usually reflective insulation have foil lamination on plastic or paper that is produced as concertina-type, multi-cell butts and thin sheets. Thermal flow resistance and insulation performance determined by three factors:


Ratio of radiant energy that being emitted by a surface to that of a black body at similar temperature, with same area. Coefficient of emissivity is between 0 and 1, where the higher ratio mean the greater emissivity.


A measure of amount of radiant being reflected by insulation material. Coefficient of reflectivity is between 0 and 1, where the higher ratio mean the greater insulation reflectivity. The angle of heat flow strikes the reflective insulation. Better performance shows perpendicular angle.

Insulation’s performance measured in Total R-value. Before choosing type of reflective insulation, suppose to perform environment appraisal to chose right insulation. During insulation installation and maintain need to make sure than no dust is on the reflective surface, because it greatly decrease its performance. Performance of reflective insulation is shown in Figure 21.

Figure 21. Reflective insulation performance (McGee and Mosher).

Figure 22 shows how good reflective insulation perform.

Figure 22. Radiant barrier insulation performance (Radiant Barrier Insulation).

All types of reflective insulation are shown in Figure 23.

Figure 23. Types of reflective insulation (McGee and Mosher).

Composite insulation

Great opportunity to use composite insulation that combines pluses of reflective and bulk insulations (Figure 24).

Figure 24. Types of composite insulation (McGee and Mosher).

Roof ventilation

Roof ventilation is important part of building and its inhabitants. Proper ventilation helps to avoid condensation under particular roof type, keep ceiling dry and away from blue stain fungus. Roof thermal insulation is very important in premises with high moistness saturation, in such areas as swimming polls.

There are wide range of different sources of moisture at building, from the everyday domestic things consuming to building materials. Warm air consist more moisture than cold air and this moisture generally brings problems in cold period of time in attic. When it’s getting cold, warm air start to get cooler that condense into water drops. Main problem it delivers is getting insulation and decking materials wet that will reduce efficiency of insulation.

In wet environment will cause multiplication of blue stain fungus, mildew and rot.

During the summer period of time attic ventilation is important because of high temperature generated there and attic ventilation will be used for another purpose. Closed attic will generate enormous heat that will cause further house flats or room with hot, dry and not comfortable environment. Roof ventilation will help to aerate attic space. How ventilation help to sustain building environment is shown in Figure

The minimum amount of attic ventilation, to prevent house from conditions mentioned above, is specified in building codes. But if to be not so correct, recommended minimum attic ventilation is about 1 square foot of fresh air for every 150-200 feet of space.

For good roof ventilation need to be two type of vents: Intake and Exhaust vents.

Intake vents

Generally Usually installed along soffit to let fresh air get into attic. For additional ventilation there are exist widely used three types of intake vents:

* Gable vents – Triangular vent installed in the gable wall, below the roof. Recognized as least effective vent, because it operates only near the gamble and air flow is limited.

* Static vents – Roof line or widely known as eyebrow vents. By making holes they installed directly on the roof. Consist metal cylinder with metal hood and a flashing collar that provides protection from the snow and rain. Their effectiveness depends from amount installed. Greatest disadvantage of this type of vents, that they may start to leak.

* Soffit vents – It is aluminium panel with louvers punched to avoid insects penetration. Installed simply by making holes in the soffit and adjusting them.

Exhaust vents

installed on the top of roof or one third from roof top to let air escape from attic. Two types of exhaust vents are used:

* Static vents – Holes on the top of the roof that let air to escape. Located under roof apex.

* Ridge vents – located on the roof top, along ridge.

* Power ventilators – A non-electrical ventilator that mounted with metal vents that use force of wind that spin vents around and by pressure increase amount of air sucked out from the attic. For its operation require wind speed at least 5 mph. It effectiveness decrease when wind is not blowing.

* Fan-driven – Powered by electricity and controlled by sensor installed in the attic. From the one side they are very effective, but from other side they require electricity that will provide extra costs.

Built-up roofing felt

Chapter is based on Chudley, p215-216, 1999.

Almost all roofing felts in its base content glass fibre or polyester reinforcement, soaked with a hot bitumen. Waterproof bitumen composite is made from both sides of felt. During manufacture outer side is covered with a sand while it hot and sticky. The underside is not covered with a sand, it left sticky, but covered with thin polyethylene to avoid dust and sand stick.

BS 747 offer two types of roofing felts:

* Polyester reinforced

* Glass fibre reinforced

There are three layer need to be laid on flat roof. First layer must be laid at right angle, starting from down of the slope. If felt laid on timber decking, than it need to be fixed with flat-head nails and all joints bounded with hot bitumen. This is necessary for pouring of hot bitumen or it will be under layer for unrolling sheets.

Vapour control layer/membrane

Chapter is based on Stirling, 2009

Built-up roofing felt is not a permeable material and it will not prevent condensation. Because for most roof is advised to use vapour control layer that helps to avoid condensation in attic ceiling. Membrane is located over the roof frame and below laid roofing material.

With accordance to BS 5534 membrane should provide such things:

* If used slates or tiles as roofing material than perform as a barrier for wind and decrease tile uplifting.

* Secondary barrier for snow, rain and dust.

* Provide weather protection before primary roof covering will be installed.

Membrane is made from single ply or laminated spun bound polypropylene or polyethylene. It have fibrous structure that provides vapour one way penetration. Drops of water will soak in this material and will stay in other side, where will roll down or be ventilated out. This technology reduce need for additional ventilation.

There are exist two types of Vapour control layers:

* High water vapour resistance – Designed to provide water resistance more than 50 MNs/g

* Low water vapour resistance – Designed to provide vapour resistance less than 0.25 MNs/g

Gutters and Downspouts

According to “Rain gutters”, Rain gutters was invented to avoid water falling from roof edge. Without gutter huge amount of rain water will flow down the roof slope and fall on the ground. This process will erode soil and splash sulphates around foundation. If foundation is made from cement than during long period of time, rain drops will make grooves in the basement. Gutter is a drainage system installed on the down edge of the roof where flow all rain water get caught and removed using downspout system. Size of gutter system and amount of downspouts are closely related to roof area. Increased amount downspouts will lead to better gutter performance in heavy rains.

Types of gutters ( according to “New gutters”):

· Wood gutters and galvanised downspouts – This type of system was traditional construction system previously and nowadays used very rarely. Gutter was made from old cedar that is expensive and almost not available nowadays. Galvanized downspouts are out of market because of new products that are better quality and longer life.

· Continuous Aluminium Gutters and Downspouts – Nowadays widely used product. It can retain more rain water than wood gutter. Disadvantage of aluminium gutter is easy deformation due transportation, installation and by leaned ladder against gutter.

· Vinyl and Plastic Gutters and Downspouts – Widely used in do-it-yourself case. Can be bought in most construction stores and installed in short period of time. Can be easily carried, cuted and installed. Plastic gutters are not durable as metal and should not be used in commercial construction because of applied environmental stress gutter will break while metal will deform. Advantage of plastic gutter is rigidity to rot and rust.

· Integral gutters – Most popular gutter in 1960’s and sometimes used nowadays as well. Gutter is installed almost on the end of roof. This type of gutter have advantage to retain more water than other types and in winter perform as snow barrier. But if integral gutter will start to leak than water will damage roof frame, sheeting and insulation. This factors add maintenance costs because of obligatoriness of inspection in every 5-10 years.

· Steel and Aluminium Gutters – Can be used for any type of building. Steel gutter is durable to external environment and can resist leaned ladders, weight of snow and fallen tree branches.

Roofing materials

Roof material generally depend from roof slope. Choosing roofing material need rely to roof slope and better to install roofing materials in greater slope than minimum. Such materials as wood shingles need to be laid on greater slopes than minimum, because the water delayed on the roof will start to collapse it. Slates and Tiles can be laid a the minimum slope, but the lap need to be increased. Minimum slopes for each type of roof is shown in Figure 25.


Slope (degrees)

Plain tiles


Pan tiles (Double clay interlocking)


Concrete single lap tiles (interlocking), clip fixing, 75 mm lap


Natural slates, green and blue (minimum 300 mm wide)


Natural slates in diminishing courses


Fibre reinforced cement slates (larger sizes)




Profiled materials (protected metal)


Wood shindles (with 125 mm gauge)




Metal roofing


Figure 25 Minimum slope for roof coverings. (Seeley, 1995, p. 137)

Roof types

Figure 26. Compilation of widely used roof types

Roof Tiling

Slates and tiles are widely used as waterproofing materials.


Based on “The tile doctor”

Plain or double lap tiles generally produced from concrete and clay in a different colours. Clay tiles maintain their colour for a longer time than concrete tiles.

Ceramic tile main component is clay. It can be made using machine technologies and as it was done a long time ago can be handmade. Materials using for tile manufacture need to be produced in lime-free environment, that makes tile more stronger. There are several processes how tile are formed:

* Dust press process forms almost dry compounded materials using extremely high pressures.

* Extrusion method forms tile using pressure what forced through nozzle slightly wet ingredients.

* SLUSH MOLD or WET POUR. Wet ingredients moulded in desired shape and let them dry up.

* RAMPRESS. This process seems to look like Dust press, except the size using for this process are much larger. When ceramic tile is formed it should have not more than 6% moisture. After forming ceramic tiles goes though firing process in kiln under temperature higher than 1000 degrees C. There tiles must be dried to 1% of moisture, if moisture content will not be dropped down it can explode, because in tile pores moisture getting boiled and became as pressured gas. By firing tile in a kiln once, it will have tarnished look. By doing firing twice it will get glazing look.

There are different kilns exist since a long time ago for tile firing:

* Beehive kilns, is the oldest and slowest.

* Tunnel kiln is more faster and modern kiln, where tiles placed on the line what is moved through the kiln in about 8-10 hours.

* Roller hearth kiln is nowadays mostly used where tiles goes through in about 1 hour.

Concrete tile is generally made from cement. Concrete tiles drying up without fire, they are usually going through process called hydration. Forming processes for concrete tile are the same as for ceramic tile except dust press process.

Fibre-cement tiles

According to “Fibre cement board”. Main components of fibre cement products are quartz sand, concrete and reinforced fibre. This product is good in sound and thermal insulation and then thick material will be than more insulation it will provide. Fibre cement is durable material and resist such chemicals as alkalis and acids, it will not be damaged by dampness, bugs and corrosion. Experiment showed that for a month placed tile in a water tile, kept intact and absorbed no liquid. Shape of tile will not transform in a contact with rain and will not brake by water freezing in winter, during large amount of cycles. Fibre cement tiles are stable to flame and can resist combustion at 800 degrees C.


Chapter is based on “Slate stone”.

Slate is a fine grained homogenous, foliated metamorpholic rock that is formed during long period of time from volcanic ash or composed clay. Main slate colour is grey, but usually it have wide range of colours that depends from place it founded and extracted. Slate generally is a rock that can be slatted and made a roofing material. There are two common method how to split slat: Cleavage and grain. It is good material for roofing, because it have low index of water absorption, it is less than 0.4%. It mean that water in material can frost and break it due to freeze. Slate Physical Properties are shown in Figure 26.

Figure 27 Slate physical properties (Slate stone)

Membrane roofing

The choice of appropriate roof membrane depends from different factors:

* Roof slope

* Roof substrate

* Use of roof

* Location

* Used insulation

* Fire performance

* Life/durability requirements

Exist three types of widely used roofing membranes:

* Thermoset Membranes – This membrane have chemical crosslink structure. Membranes thickness is fairly thick, it`s is between 30 and 60 mils. Durability of this material is very high and can be performance hard for many purposes. If material is laid using right technology then it will provide great performance and prevent leakage for long period of time.

* Thermoplastic Membranes – Thermoplastic membranes are very similar to Thermoset membranes, but there is no cross-links in structure. Bounds are joined together using heat. Performance of this material laid on the roof depend from quality of welded joints. This material splits in more categories:








* Bitumen – Bitumen is roof membrane that combines reinforcement materials and asphalt with modifiers. This material have good performance, but it have such disadvantage as technology is used to join bounds. To join bounds is used „torch-down” technology, it is large flame used to melt the asphalt and join pieces together. Bitumen membranes spits in four main categories that is shown in Figure 27 with accordance to BS 747:2000.

Figure 28. Bitumen felt types (BS 747:2000).

Single-Ply roofing systems

Chapter is based on “Single-ply membranes”.

Is preferred roofing material in commercial building construction. It can provide long-lasting durability, flexibility, great strength, easier to repair and great performance during its lifetime. Single-ply is a flexible sheet material, manufactured mainly using synthetic polymer that gives great performance and satisfy all quality requirements. It content no chlorides or fluorides that totally eliminate of water penetration. Advantages of Single-ply are quality of the material, accessories and versality in their attachment methods that are used on all types of roof applications. It provides wide range of choice in roof design, performance and refurbishment. Single-Ply sheets are provided with a highly-reflective surface that keep roof cool and help to reduce summer cooling costs.

Widely used types of Single-ply material:

* Polyvinylchloride (PVC) – PVC sheets are durable and have good resistance to extreme weather conditions. Damaged sectors can be easily repaired in short period of time. Expected life of PVC is about 20 to 30 years, but was cases when material was in good condition after 35 years.

* Thermoplastic polyolefin (TPO) – Most recent on the market. Also known as flexible polyolefin. This material is not so flexible as PVC that mean that is harder to install. Widely used for green roofs. Is very durable to extreme weather conditions and in TPO content do not contain chlorinated ingredients. Material life time is about 20 years.

* Ethylene propylene diene terpolymer (EPDM) – Has great resistance to cyclic fatigue, ultraviolet radiation and extreme weather conditions.

Figure 29. Benefits of Single-ply Roofing (According to “Single Ply Roofing”)

Asphalt Shingles

Chapter is based on “Asphalt Shingles”

Asphalt shingles is proven as cost-effective roofing material that have wide variety on the market. There are available two types of shingles: Organic and non-organic. They have the same performance and quality. Organic shingles are more rigid and have better tear-resistance. Non-organic content fibreglass, they are more flexible and have smaller tear-resistance than organic shingles. This roofing material is made from asphalt saturated mats with fibreglass or organic felts and pressed in roofing granules while they are soft and hot. The roofing granules is crushed stone to 1 mm which are laid with silicate material. Stone layer is saturated with colour pigment to provide colour. Shingle looks like rolled asphalt which widely used on low slope roof. If compare shingles life time and price, can see that it is cheap material, because its lifetime is about 30 years.

Figure 30. Benefits of Asphalt Shingle Roofing (Asphalt Shingles)

There are two ways of Asphalt Shingling installation (Roofing with AsphaltShingles):

* Completely remove all shingles and lay completely new layer.

* Install new layer on the existing, without removing old layer. But firstly need to make sure that roof frame will carry additional layer. It refers specially to older houses.


Chapter is based on “Stirling. Thatch roofing. 2009”

During thatch’s life time it provides effective great protection from any weather conditions. Thatch is a natural, eco-friendly material that is moisture and air permeable, and provides great weather resistant, durable and breathable roofing material. During thatching is used polyethylene sheets, but it need to be removed by thatching, because it will not allow moisture and air flow though what will lead to early thatch decay.

Most people thinks that thatch is material that can easy inflame, but they are wrong because hundred years experience prove that it’s not inflame so easily as it looks. There are exist a risk of fire, but only in cases when haven’t been made particular fire tests on thatch and chimney. In case thatch started to fire – it will not fully flame in few minutes as people think, it will take hours to make thatch burn. More threat to thatch provide birds and insects, but in this case is used galvanized steel wire netting that is fixed outer thatch surface. Wire netting need to be carefully applied, only in cases it really require, because falling leaves and debris from the trees can be trapped in netting that will lead to reducing air movement and thatch will cover with moss.

Types of Thatch

According to “Stirling. Thatch roofing. 2009”

* Water Reed – Most durable thatch material. It have compact and straight texture with cutted edges. Thatched roof is durable from bird or insect attack. Water Reed lifetime is about 55-65 years.

* Wheat Reed – It is winter wheat straw, but not reed at all. It confuse by its appearance similar to water reed. Wheat Reed lifetime is about 20-40 years.

* Long Straw – Long Straw is the most preferred from all types. If compare to other types, this thatch is much softer, rounder shape and deeper. Before installation all ears and leaves are removed. Long Straw lifetime is about 15-25 years.

Lifetime of thatched roof depends not only from material, but also from such factors:

* Roof slope. Low slope will provide decay acceleration

* Climate condition. High humidity, snow and rain will decrease thatch lifetime.

* Quality of material and thatched roof.

Wooden Shingles

Chapter is based on “Sherlock. 2007. Wood shingle and shake roofing.”

Nowadays people confused why wooden shingles are used in roof cladding while exist great alternatives. Shingles are recyclable material that helps approach green roofing.

Wooden shingles are made from cedar, oak or chestnut wood. The Forest Industries Development Council argues that buildings constructed from wood are more energy and environmentally efficient than from steel or concrete. There are offered different colours and textures that helps better satisfy customer wants. They have low expansion rate and light weight that facilitate installation and maintenance. High natural durability helps to avoid rot appearance. In spite of this erosion may appear due to bad weathering. Good quality shingles will provide about 20 years long life. Applied preservatives will increate shingles durability and provide about 40 years long life. With accordance to BS 5534 can be chosen suitable preservatives that will increase durability. Before applying treatments need to make sure that wood is acclimatized. To avoid moss appearance in early years they should be nailed with zinc or copper nails. Such metal nails threaten by rain with corrosion that is toxic to moss and lichen.

There are three widely used types of preservatives:

* Film forming – Paints that are applied to smooth, saw textured or split surface type shingles. Paint is based on latex basis that will provide mould resistance and colour retention for about 12 to 15 years.

* Penetrating – Semi-transparent penetrating oil and latex-based stains that provide chosen colour and durability to external environment. Oil will provide durability in cool climate, whilst latex protect shingle in hot and humid climate.

· Preservatives – This is water repellent preservative. It is not so effective as semi-transparent stain. Their life time is shorter than remain preservatives and maintenance costs are high.

Metal roofing

Widely used metal roofing materials are Copper, Lead, Steel and some other not so widely used materials.


Zinc is widely used as metal roofing material, because of its maintenance-free long life and it can be used for any building design, from traditional to modern. It is natural material that will retain its look for a long period of time. Environmentally friendly with non-corrosive capabilities and 100% water runoff. Zinc is used as a coating for steel and other metals that guarantee anticorrosion capabilities. Zinc sheets are used for such type of architecture as roof and wall. Expected file of zinc sheets is between 60-100 years depending from its location. Great advantage of zinc is its pliability. Material can be easily worked and formed to deserved shape.

If compare to copper and steel, zinc softer metal. If combine these materials can be gained such requirements:

* Titanium – Improves zinc hardness and tensile strength

* Copper – Add colour to zinc

* Aluminium – Will hide zinc’s flashing

Maintenance costs are reduced to minimal because zinc produces in natural way protection carbonate layer or patina that provide defence cover and avoid need for additional painting. Any scratches or small damages tend to disappear by formed patina. Also patina have aesthetic effect, because during its lifetime it develops mate grey colour. Colour tone depend on building location, geometry and pollution level. Architects says that roof get richer colour by getting this grey tinge.

Zinc and other metals are 100% recyclable. More than 30% of the world’s zinc material is used again after recycling process. If compare to other non-ferrous metals it is need less energy to manufacture zinc from ore. To produce zinc from recycled material applied energy is even less. These factors increase demand for zinc.


Copper have longer life than zinc and very low maintenance. This specifications increase demand of this metal. Roofs made from copper will last centuries. Copper is a metal that never corrode or rust and it installed uncoated that mean that this material need no maintenance. If compare price to copper and other materials, copper will be most expensive, but copper’s life lasts so long that price become more lower.

During period of time as a result of contact of natural external environment it produce patina. During copper’s life colour will change its tinge. Usually tinge depends from geographical location. It can be compared with one penny coin, during early age penny have bright colour, but during period of time it became brown or grey and after long period of time it takes gray-green or blue-green patina. These changes makes building appearance more vintage.

Most engineers interested in involving copper to building and roof construction because of its environmentally friendly qualities. Copper is one of the most completely recycling material. Recycled copper can provide almost the same amount, more than 95%, of copper that is produced from ore. Usually copper produced from ore is used in electronics industry. Copper used for producing roofing material is mainly obtained from scrap. It is mean that new copper roof is made from about 75% recycled material.

Copper is highly pliable metal that provides more flexibility and easier work with it. Workers can do more operations with less effort than with other materials.


Due its strength, durability, strength and low prices steel is universal building product. Steel roof is widely used on different types of buildings. Steel roof offer such benefits:

* Aesthetic appeal – The standing seam roof provide excellent look and became one of the most favourable roof for any kind of building. Steel roof is available in a wide range of colours, shapes and profiles that gives flexibility in material chose.

* Long life – Steel roof is provided with zinc, aluminium or zinc-aluminium alloy coating that prevent corrosion penetration and provide about 20 years life. During this time no maintain works need to be performed.

* Cost effective – Steel roofs are cost effective if compare to non-metal alternatives. They require no maintenance since roof been installed.

* Energy efficient – Steel roofs are very energy efficient when are used for cool roof purposes. Metal have heat-deflective coating that will reduce unwanted heat during hot seasons that will decrease building cooling costs.

* Environmental benefits – Engineers started to recognize not only materials functionality and durability, but also its recyclability. Steel is 100% recyclable metal. Great benefit gives opportunity to recycle steel roof at the end of its life. In the end of its life steel separated from other materials using a magnet then reclaimed and processing network. Recycled metal is used in roof manufacturing. New roof at least 25% content from recycled steel. Opportunity of material recycle reduces cost of manufacture new steel, preserve environmental impact and reduce demand of other natural materials.


Chapter is based on “Lead Flashings & Lead Panel Roofs”.

Lead is soft, highly pliable and at same time very heavy roofing material that can be easy formed to desired shape. It is waterproof material with high resistance to atmospheric corrosion. Lead is a metallic element that is signed in as Pb in Periodic Table of Element Symbol. Material can be easily cut. After cutting it have silver colour but it quickly gets grey on the open air. Metal is widely used for such buildings as churches and cathedrals since a long time ago. Refurbishment of old lead roof is performed easily by dismantling and recycling. Dismantled lead roof have the same value as new roof, because of its high recyclability rate which produces a positive environmental impact.

There are three methods how lead sheets can be produced:

* Sand casting – Filling prepared basin of sand with molten lead and spread it to requires thickness. Material had rough and irregular form. This method was used by Romans to make water tanks. In medieval times people started to use it in manufacturing of roof material for churches and cathedrals. Nowadays only few firms use this method of lead sheet production.

* Machine casting – Method that was invented during 1950’s. Lead sheets was produced by rotating cold metal cylinder in a reservoir of molten lead. Thickness of sheet was made using varying speeds of rotated cylinder, force acting on molten lead and difference in temperature between lead and cylinder. Produced sheet had smooth surface and form.

* Milling (rolled) – Widely used nowadays technology. Sheet is made by rolling a block of lead between rollers. Block is rolled between reducing distance rollers until it will get desired thickness. Finally produced sheet have smooth appearance from both sides.

* Degree of thermal movement need to be considered because large sheets of lead under the influence of hot weather conditions can lead to failure by material cracking or distortion. Information of correct sheet sizes are available in technical guidance’s. Correct sheet pieces need to be taken with accordance of roof slope, when lining parapets or gutter. Stainless-steel or copper need to be used for sheet fixing to avoid interaction of unsuitable materials. Fixed placed need to be covered with lead to avoid water access.

Lead is widely used for these purposes:

* Soakers

* Flashings

* Parapets

* Flat roofing

* Pitched roof gutters

* Cladding for roof furniture and windows

Green roofs

Chapter is based on “Downton. Green roofs and walls.”

A green roof is a flat or low pitched roof where are planted grass, plants and other vegetable. It consist from 5 layers (Figure 30):

1. Metal roof deck (basement)

2. Root barrier

3. Drainage layer

4. Geotextile

5. Soil

Figure 31. Five layers of green roof (Downton. Green roofs and walls.)

Exist two types of soil thickness:

* Extensive – Thickness of soil up to 200 mm for small vegetable.

* Intensive – Thickness of soil from 200 mm to support such vegetables as trees. Additional soil makes roof more heavier than Extensive, so roof frame need to be designed with accordance of soil weight.

Green roofs are increasing in use in modern architecture. In Austria green roof need to be on every commercial building where roof size exceed 100 m2. This roof technology was involved to make busy cities greener and more environmentally friendly. Specially in saturated cities where no places for parks left.

Green roof provide sufficient thermal insulation where additional insulations can be avoided. Insulation performance depends from soil thickness and type of vegetation. In hot climate green roof can reduce attic temperature. Roof provide not only thermal, but also good sound insulation in urban and buildings close to highways. Highly recommended to use green roofing on building close to airport that will significantly reduce noise level.

Green roof layer can provide longer roof membrane life. It avoid roof membrane from solar impact and cyclical-cooling and heating procedure. Membrane life can be extended up to 20 years that will also will not require maintenance. By constructing such roof need to be considered appropriate drainage and waterproofing.

The soil reduce the risk of roof fire because it is not burn at all. Although in climate dried vegetables can provide risk of fire. In this case can be integrated water sprinkler that can be used as plant shower and extinguish a fire.

Advantages that deliver green roofs are shown in Figure 31.

Figure 32. Advantages of green roofs (Downton. Green roofs and walls.)


The company’s case

The company called “Skardnieks” was established in 1991 in Latvia by four tin workers and company dividends were divided equally between all four workers. The company was established as small independent team with an aim to perform simple construction works related with sheet metal, ventilation and roofing.

By the hard work in long period of time the firm started to develop as well cultured organisation and the company’s name started to be not only title but also a recognizable brand name. The brand name and quality performance gained good reputation among existing customers that lead to attraction of new clients and co-operation with construction companies. The firm was aiming on doing and maintaining all works with high quality and responsibility.

In 2007 dividends from two it holders were acquired by main company’s owner and he became a majority ownership. This action gave opportunity to its founder to manage the firm and develop as he wanted. Due these changes the firm started to work more structured and its employees hierarchy increased and now contains from 15 working staff including owner. The company started to invest hardly in facilities improvement and acquiring only professional tools. All employees were trained abroad in such worldwide metal company as Rheinzink.

The firm was survived in global economic recession while most of the construction companies were bankrupt. Now it is strong competition for any construction project opportunity.

Approach to strategic management choice

There are two types of approach to strategic management: Prescriptive and Emergent. The emergent approach is for more dynamic environment where future is more harder to predict and used in rapidly changing business environment. In this case more appropriate is prescriptive approach, because of low turbulent business environment. The prescriptive approach will help to design highly formalised planning process. Where will be set business aims and objectives, and based on them appropriate formulated strategy will be made. Clear objectives can be translated into targets against which can be measured and monitored the company’s performance. The process of prescriptive approach is shown in Figure 2.

Analysis of Environment

Analysis of environment need to be performed to examine the environment that involve everything and everyone who surround the company. It includes nine different types of analysis that is shown in Figure 4.

Environment basics

The environment basics involve three basic things that need to be analysed.

Market definition and size

Environment basics

There are three basic things that should be analysed:

* Market definition and size – Question need to be asked in this area is “What is the size of market?”. It is important to know market size because it will help to design strategy objectives. Market size usually shown in annual sales.

· Market growth – After establishing market definition and size need to evaluate how much the market has grown in particular period of time, usually in a year. Market growth rate will influence strategy objectives. Organization that would like to grow quickly will be interested in fast growing market

· Market share – It can be defined as ratio of all sales in a market that is detained by particular company. There are different ways how market share can be measured, but most important of them are “Sales revenue” and “Sales volume”. (tutor2u)

Degree of turbulence

The degree of Latvian roof construction market turbulence can be measured using Figure 5.

The changeability of the environment influence such factors as complexity and novelty that shows how external factors are likely to change:

* The complexity of Latvian roof construction market belongs repetitive branch that means that market changeability is very low and stay the same all the time.

* The novelty of roofing construction market is on the low degree. The technologies used long time ago are closely familiar to that are used nowadays. By this long time were only invented such things as waterproof membranes that decrease water permeability. There were invented no particular material that would fluently influence roofing construction market except material that appear in roof market recently. The material called TitanZink is a sheet metal material that is familiar to galvanized steel and require to be laid by follow particular technology. This technology can be easily adopted and in performance this material gives more flexibility and can be easily shaped to desired form. There are no general novelties that could influence roofing construction rigidly.

The predictability of the environment influence such factors as rate of change and visibility of future that shows how predictable external factors are:

* The rate of change of the roofing construction technologies have very slow rate, that tan be identified by materials and technologies that are almost haven’t changed, only improved.

* Based on the history previous and previous technologies and materials the Visibility of future have low degree. The Roofing didn’t changed, only improves.

PESTEL analysis



* Global economic recession influence negatively construction

* GPD fall down on 12% in Latvia

* Domestic and hotel construction rate fall down for a 2% than last year

* Office building construction increased for 1% than last year

* Roofing material price lower for 7,5% than last year


* Customers put in first place price, but not quality

* Growing demand on roof solar batteries


* Most widely used roofing materials are Zinc, Copper and Steel

* Demand mainly on metal and membrane roofs

* TitanZink material is getting more popular

* Green roof id one of the recent technologies


* All metal materials can be recycled


* Government made engineering supervision more rigid

Industry life cycle

The entity of roof construction market is that it have very low changeability. This market is not about production development and manufacturing but is more about service where industry cycle related to materials. There are two types of roof construction that have early ages of their life cycle. One of them is Titanzink that is in growing demand and if will be adopted in time it can bring competitive advantage. The second one is green roof construction, what usually used in large building construction.

Key factors for success

The “Gusev” ltd customer in first place put quality and good service. The most customers are demand for metal roof in domestic and industry market. The customer want high quality roof for relatively low price. The “Gusev” Ltd is a company with good reputation, well established and recognisable brand name between most customers. The most important key for success is provided very good quality for appropriate and sometimes relatively low price. The main aim of the company is to satisfy customer with high quality and good service.

Such issues can be the key factors for success for “Gusev” Ltd.


There are few main factors for success that organisation own and improve them all the time:

* Recognisable brand name

* High quality of performance and good service

* Only professional tools

* The investments in new equipment

* Experience since 1991

* Positive feedbacks and good co-operation companies


The “Gusev” Ltd is the company that have good competitive advantage over rivals that deliver such factors:

* Main factor in this case is quality

* The innovative team that aims not only to perform by standards but also improve them

* Co-operation with large construction companies that provide roof construction works where quality is in high demand:

o Gavars” Ltd

o “DHB” Ltd

o “ANBI” Ltd

o “Strek” Ltd

o “Ulbroka” Ltd

o “AValpina” Ltd

* Co-operation with material supplier that provide materials for relatively low prices:

o “Celtnieks 95” Ltd

o “RUUKKI” Ltd

o “Scand Roof” Ltd

o “Rheinzink” Ltd

o “Axcelere” Ltd

o “Eirovent” Ltd

o “Slodze” Ltd


In this case the organisation key factors for success generally are the certificated staff with great experience. All workers have not only practical but also theoretical experience gained in Latvia and abroad. A company constantly visit construction exhibitions in Baltic states, Poland or Germany to be updated about latest technologies that gives opportunities to adopt them one of the first and start to offer to customers.

The owner of the company and employees argue that salary in comparatively high to competitors. That helps to keep workforce more stimulated that lead to more responsible attitude and ability innovate.

A company innovated particular high quality roof details that gives opportunity to install them in domestic conditions. The price for such innovations is higher than competitors, but comparatively low to quality and performance contributed


Porters five forces

Porters five forces help to clarify factors that influence organisation

The bargaining power of suppliers

Most demand raw material of the company are Titanzink sheets, galvanized metal sheets, colour coated galvanised sheets and formed sheets that are ready to install. There are a lot of such raw material suppliers that can provide such type of material and there is competition between themselves that provide great advantage to the company. A company can easily switch to other supplier in case it start to exert its power.

There are exist such substitutes to metal raw material: Tiles, Slates, Roof membrane, Asphalt shingles and Thatch roofing. The range of materials amount of suppliers gives advantage and flexibility to the company.

The bargaining power of buyers

There are many and different types of buyers that demand roof construction. The customers are demand for such products:

* New roof for domestic purposes

* New roof for industrial purposes

* Roof renovation and maintenance

* Roof details

This points shows that the company’s customers are:

* People that need roof for domestic purposes

* The companies that build new buildings for industrial purposes and hire roofing company for roof construction

* The companies that spread construction works between company’s and manage the project

* The house management

* People that demand details for domestic purposes

There are wide range of opportunities in different market segments. But buyers have advantage in range of the company selection. In case of customer dissatisfaction he can easily switch to another company.

The threat of new entrants

There are low barriers to entry roofing construction market. To gain such level of quality, experience and recognition will need good investments and time to gain recognition and experience. Such factors can influence entry barriers with positive impact to the company:

* Economies of scale – Production and work costs can be reduced based on already developed technologies and own required professional tools. This can lead to the more customer attractiveness and raise entry barriers. The company entered in such market will be forced to keep small prices to be competitive.

* Product differentiation – The company have recognisable brand that provide entry barriers. The entry company have opportunity to gain market share by investment in marketing and technologies or by experience by period of time

* Capital requirements – To entry professional roofing construction market need a capital to invest in building and facilities.

* Switching costs – The company have permanent customers that are satisfied with quality and will not switch to other

The threats of substitutes

The main substitute of roofing construction in customer who decided to perform roof building by his own.

Rivalry among existing companies

The roofing construction market have high competition because of wide range of companies that offer the same service. There are different sizes of competing companies, starting from small workshops and ends with large companies that except roof construction are raw material suppliers.

Four links analysis

The company have links to different branches that helps to reduce costs and increase organisations sustainability.

Informal co-operative links and networks

Most of the links and co-operations are informal and operates without contract in Latvia. The company have mutual agreement with such companies:

* “Gavars” and “ANBI” Ltd – The large construction company that provides all metal works to the company.

* “Celtnieks 95”, “Rheinzink” and “Scand roof” Ltd – Raw material suppliers. Interrelated agreement. The company will buy Titanzink from this company, but company will advertise company where possible.

The company established informal co-operation with some rival companies with an aim to support each other.

Formal co-operative links

The company have tend to co-operate and became a franchise of such company as “RUUKKI”, that is global raw material supplier. This co-operation will give opportunity to buy material for smaller price that increase competitive advantage.

Competitor analysis

In most markets there are more than one competitor. It is hard to evaluate each of them and because usually it is done by taking few companies and making narrow evaluation. It will help to understand what advantages and disadvantages compare to organisation rivals have. Broad analysis of competitors and their power helps to find their forces. Basic analysis will consist from making competitor profile based on such issues:

· Objective – An analysis of competitors objectives help to forecast its strategy. If competitor tend to gain market share then probably will start to implement aggressive strategy. If seeking profit growth than possibly competitor will invest hardly in new plant or improve technologies. Every objective can help to forecast rivals action. Companies annual statements can be useful in evaluating but need to be analysed wit attention because of factor of bluffing.

· Resources – The type, size and amount of resources that provide competitive advantage to company need to be analysed.

· Past record of performance – Can provide company’s successful performance that can be adopted.

· Current products and services –

· Links with other organisations – Evaluate links, alliances and other types of co-operation than deliver competitive advantage.

· Present strategies – Innovation, customers, investments, market share, product range etc. Evaluate how such things used for strategy purposes.

Customer analysis

The roofing construction market is small in Latvia, because of small size of population – 2,266 millions. There are many and different types of buyers that demand roof construction. The market generally divided in two categories: Roof for domestic and industrial purposes

The customers are demand for such products:

* New roof for domestic purposes

* New roof for industrial purposes

* Roof renovation and maintenance

* Roof details

This points shows that the company’s customers are:

* People that need roof for domestic purposes

* The companies that build new buildings for industrial purposes and hire roofing company for roof construction

* The companies that spread construction works between companies and manage the project

* The house management

* People that demand details for domestic purposes

There are wide range of opportunities in different market segments. But buyers have advantage in range of the company selection. In case of customer dissatisfaction can easily switch to another company.

Analysis of resources and capabilities

Resources and Capabilities

Analysis of resources and capabilities was developed according to Figure 9.

The resources and capabilities company own:


* Personal equipped workshop

* Professional roof cladding tools

* Professional “HILTI” electric instrument

* Transport

* Wide range of innovations

* Certificated staff

* Investments in plant and new equipment


* Recognisable brand name

* Established in 1991

* Located in 20 minutes to drive from capital city

* Highly experienced staff

* Developed culture

* Good co-operation relations

* Quality of performed work

Organisational Capabilities

* Owner with management education

* Directly managed staff by owner

* Experienced and certificated staff

* Developed and kept in secret know-how’s

Reasons of having all these factors

The company owns all these resources and capabilities because it operates since 1991st year and during all this period of time the staff gained great experience in roof construction that was combined with theory, studies and trainings. All these factors provided great quality performed works that attracted more customers.

What do resources and capabilities deliver

Value added

* Personal equipped workshop

* Professional roof cladding tools

* Professional “HILTI” electric instrument

* Transport

* Wide range of innovations

* Certificated staff

* Investments in plant and new equipment

* Good co-operation relations

* Developed and kept in secret know-how’s

* Highly experienced staff

Competitive advantage

* Recognisable brand name

* Established in 1991

* Located in 20 minutes to drive from capital city

* Highly experienced staff

* Developed culture

* Good co-operation relations

* Quality of performed work

* Owner with management education

* Directly managed staff by owner

* Experienced and certificated staff

* Developed and kept in secret know-how’s

* Certificated staff

* Wide range of innovations

Improvement methods

To find out what resources and capabilities can or need to be improved, company should organise all staff meetings sequentially. Where each member of staff will provide information what should be improved, but in case everything is improved and in high grade, then detect new opportunities for company.

The think that definitely should be improved is the brand name recognition. The brand name can embrace wider range of the market using mass media capabilities or contact directly companies that could provide roof construction work. Other ideas can be obtained from employees.

The Value chain

The Primary activities

Inbound logistics

Company have personal van to bring raw materials from suppliers and transport goods within the company. For bigger size material company rent a truck.


* Office – to take an orders and to meet customers, clients and partners

* Accountant office – used only and specially for accountancy operations.

* Warehouse – used to store a raw materials, metal sheets, construction racks and tools when not required.

* Workshop – Construction staff main work place used to perform an order or make a billet for further construction.

* Canteen – With cooking facilities

Outbound logistics

* Company use personal van to bring final product or a billet to customer. For bigger size material company rent a truck.

* If product is not required jet, it can be stored in a warehouse.

* All products are wrapped and prepared for transportation.

Marketing and sales

Company posts advertisement in local newspapers and magazines. This area is vulnerable part of the company. Need to be performed more advertisement and customer attraction.


* All orders are wrapped before transportation.

* Company provide warranty on all their works and perform maintenance for free in case of customers complains.

* All workers are highly skilled in various branches and additionally can perform a work on the roof that customer desire.

The Support activities


If customer do not provide own material, than company’s director negotiate about type, quality and colour of roofing material and order it from suppliers for good price. All small orders taking and buying required raw materials perform secretary. Generally for buying raw and supplementary materials is responsible office.

Technology and development

The company have good equipped workshop with modern technologies. The technologies and equipment are improved all the time to rise quality. All employees attend sequentially construction exhibitions to be confident with modern construction technologies.

The company acquire only professional tools for work with sheet metal. Metal scissors, mallets and other tools changed sequentially to avoid defects.

At the same time there are a lot of technologies need to be adopted to increase competitive advantage. Such roofing materials as tiles and green roofs should be adopted.

Human resource management

The HR management should be improved. Need to be attended not only roofing construction trainings but also management trainings to improve company’s wellbeing and employees interdependence that will lead to more motivated staff.

company infrastructure

The company plan and control all operations based on “emergent” strategy. In stable environment that belongs roofing construction, more appropriate strategy is “prescriptive”. That will help to define more clear objectives. But firstly there are need to be involved statistic methods that shows all performance graphically and will show what field need to be improved or worth to invest.

The value system

There are shown in Figure 18 company’s value system within company operates.

Figure 33 Company value system

Sources of competitive advantage

The company owns such sources of competitive advantage:

* Niche marketing – Concentrates generally on metal roof construction.

* High performance or technology – Skilled and certificated workers provide great performance.

· Quality

* Service

Sources that company should adopt:

* Differentiation – New technologies and materials, such as tiles, roof membranes and green roofs should be adopted. This differentiation require investments in facilities and trainings.

* Vertical integration – In case of company successful growth, vertical integration need to e implemented. Such materials as metal sheets, timber, screws and isolation can be acquired directly from global distributors to eliminate supplier added value.

* Culture leadership and style of an organisation – Company should develop a culture, based on a previous experience and use it as advantage in marketing purposes.

Resource based sustainable competitive advantage

Breakthrough resources

* Innovative capability – All innovation that deliver great quality and sustainability are exclusively innovated by company

* Appropriability – Resources that are in use deliver advantage only to company

Core resources

* Being truly competitive – Experience, tools and technologies are on high level.

Base resources

* Imitiability – It is not hard to imitate resources such as equipment and tools, because they can be acquired. But to gain such experience will need time.

* Sustainability

* Durability


* Prior or acquired resources – It is raw materials that are supplied by suppliers


Marketing is everywhere. Nowadays customers get huge amount of offers and messages, buying different products and services in different type of supermarkets or other centres. There are exist a lot of different theories about marketing objective(Baines et al, p.4, 2008). Most widely used theory says that Marketing is a management process where supplier forecast identify and satisfy customers needs and wants profitably. (CIM, 2007) from (Baines et al, p.5, 2008). There are have been developed different disciplines how to influence customers:

* Industrial economics – Influence that is based on matching supply and demand. This knowledge is related to industry where products manufactured. Supply and demand affect product price and quantity to be produced.

* Psychological – Knowledge about customer psychology that helps to design product based on customer behaviour and forecast will customer acquire such product or service, or not.

* Sociological – Knowledge about how customers behave from sociological point of view. How customers age, gender, nationality or other social factors influence willingness to buy particular product or service.

* Anthropological – Science that is based on market subgroup research. Explore particular group of potential customers, such as Laptop users, car drivers. (Baines et al, p.9, 2008)

(Baines et al, p.4, 2008)

(Baines et al, p.4, 2008)

(Baines et al, p.4, 2008)

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