Fosse Commercial Contractors

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Construction Business Plan

Strategy and Implementation Summary

Fosse plans to market itself through a variety of methods. Our plan will use referral systems, radio and published ads, leveraging of our pre-existing contacts with the local real estate companies, and industry contacts.

Fosse has been able to gain a very advantageous supplier contract that will allow Fosse to obtain its materials at a significant discount. This will allow the company to underbid its rivals and achieve a low cost leadership role.

5.1 Competitive Edge

In the construction industry the primary ways to compete are through low cost or better project management. One of the most important processes for winning a contract is the bid process. Fosse has a unique competitive edge over most of its competitors. Mr. David West, FCC's General Projects Manager, is the nephew of Charles Nunn, who owns McHoughton's Lumber, one of the Midwest's major construction material suppliers. Through this relationship, Fosse has been able to gain a very advantageous supplier contract allowing Fosse to obtain its materials at a significant discount. With this edge the company can underbid its rivals and achieve a low cost leadership role.

5.2 Marketing Strategy

Fosse plans to market itself through a variety of methods. First, the company will use a referral system with local businesses. We will also air radio spots and publish ads in a variety of commercial construction trade magazines. In addition we will leverage our pre-existing contacts with the local real estate companies. Finally, as a member of the local construction association, we will be updated on new projects let out for bid.

5.3 Sales Strategy

The most critical part of sales is not the marketing, but the bidding process, in which companies offer their designs, services, material quality, project timeline estimates, and costs. The company that offers the best combination of these variables is the most likely to get the contract. Therefore very detailed project planning, including supply agreements, labor needs, subcontractors, presentation, and other factors, is crucial for Fosse in winning contracts. We will be designing a standardized method for doing this with all our contracts, with an emphasis on quality, timeliness, and low cost to outbid our competitors.

5.3.1 Sales Forecast

Sales forecasts are based on conservative estimates. We expect sales in 2003 to be lower than previously planned as we adjust to a new client base. After that, we expect sales growth to be much higher as we gain market share.

Sales Forecast
2004 2005 2006
Sales
New Construction $247,562 $293,478 $332,165
Repair work $250,414 $293,478 $332,165
Alteration work $245,760 $293,478 $332,165
Total Sales $743,736 $880,434 $996,495
Direct Cost of Sales 2004 2005 2006
New Construction $176,797 $214,239 $242,480
Repair work $181,004 $214,239 $242,480
Alteration work $177,723 $220,109 $249,124
Subtotal Direct Cost of Sales $535,525 $648,586 $734,085