Understanding the external environment
Corus examined its construction strategy in light of the external environment, to identify future market needs. By linking Corus competencies and technical knowledge to future market needs, Corus aims to develop products that give the company a competitiveadvantage in construction. PEST analysis is a powerful tool that can be used to help analyse the external construction environment. This analysis involves examining the current situation with regard to the following factors:
In the modern business world a company needs to innovate to remain successful. By using sustainable principles Corus can develop a lasting competitive advantage. Coruswas formed in October 1999 through the merger of British Steel and the Dutch company Koninklijke Hoogovens. It is a public limited company, headquartered in London and quoted on the London Stock Exchange and the Amsterdam-Brussels-Paris Euronext Exchange. It manufactures metals including 17 million tonnes of steel a year in Europe and the USA, and employs around 50,000 people. Corus is listed onthe FTSE4Good Index and the Dow Jones sustainability indices. Corus earns 30% of its revenues from construction and is an important sector for the company. Corus is a recognised international brand in the construction industry providing innovative metal-based products not only to the European but also the global construction market. Embracing sustainable thinking has for a long period played animportant role in new product development. This Case Study shows how Corus has set about evaluating opportunities and developing products that minimise the use of wasteful resources, whilst meeting the needs of the future.
Environmental Two of the main issues here are meeting the Kyoto Agreement in production of Carbon Dioxide from the burning of fossil fuels and waste going to land fill.
Note:When using PESTLE as a tool for analysis it is possible to get overlap between an issue which can be put into two sections. What is more important here is to identify the changes and understand how those changes will impact on the construction industry. The factors identified in the analysis are concerned with the current situation. However, to get first mover advantage it is essential to plan forthe future through forecasting events over the next 20 years using the factors from the PESTLE analysis. This is partly due to the need to have accreditation for products. This is a testing regime carried out by an independent body against relevant British/International standards and building regulations. On successful outcomes of the tests, a performance certification is issued for the specificproduct in the specific application - generally stating structural, fire, acoustic, thermal and durability performance of the product. This is important as the Construction industry is generally very conservative and hence, to introduce a new product, it is essential to have third party validation that the product will perform as the manufacturer states. Achieving this accreditation can take up toa couple of years to get, and it then takes a substantial amount of time to develop the product for today’s construction industry. The process of forecasting future events is known as Road Mapping to Corus. It allows Corus to understand changes in PESTLE factors over time, identify how these affect the construction industry and link product developments to these changes. Road Mapping allows Corusto identify market opportunities, develop products to meet these and identify which existing technologies can manufacture them.
Political UK Government policy and EU directives, for example, planning and environmental issues including sustainability affect the construction industry. Economic The health of the economy and interest rates affect demand for commercial and residential...