Bouygues SWOT and PESTLE Analysis

Strength

1. Established player in the industry with robust competitive advantage: Bouygues has maintained a strong leadership position in the Construction Services industry and direct relation with customers. It has aided the organization to swiftly scale new products successes. Bouygues provides comprehensive product mix options to its customers. This has helped the company to cater to various customer segments in the Construction Services industry. The first mover advantage in the increasingly crowded market place and the new products are rapidly increasing Bouygues market share in the Construction Services industry. With consistent good performance in the civil work segment and the returns to positive contribution from Bouygues Energies and Services in Q4 2018 the advantage has comparatively increased for the organization. Building up of roads in mainland France has increased the profitability index. It has built upon strong worldwide demand for long term complex projects and more sophisticated and integrated offers and maintenance. Equipped with specific knowhow in sustainable construction and the ability to handle complex and sophisticated projects, Bouygues has been successful in high cash generation. With tight control over its value chain, Bouygues leverages the best internal and external expertise in order to remain a key partner for its customers. The organization has undergone strategic development in high growth markets, urban development, eco-neighbourhoods, smart cities, energy and services and smart roads.

2. Strong and selective international presence: Bouygues has followed an international expansion strategy by targeted growth in international markets. However, it has done so with a close adherence to its risk-management standards. As of fiscal 2018, Bouygues boasts of a worldwide presence in 93 countries with employee strength of around 129000. It is seen nevertheless that the growth is mainly limited to areas which the IMF economic growth forecast 2019 has declared as low risk zones. Accordingly, the highest growth of 41% was seen in Europe, followed by a 28% growth in North America. The Asia-Australia region saw an increase of 20% and the Middle East an 8% growth. On the other hand, nearly negligible growth was seen in areas classified by the IMF as medium to high risk zones. Latin America and Southern Europe together saw as little as 3% growth, while Russia remained stagnant. This selective risk-free growth strategy has enabled Bouygues to develop a strong international presence.

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Weakness

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Opportunity

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Threat

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Political

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Economic

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Social

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Technological

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Legal

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Environmental

1. Adhering to environmental standards for better waste management: Sustainability and environmental factors have become very important for businesses over the last decade. Government and pressure groups are fast asking organizations to adhere to environmental standards. Companies need to focus on limiting their carbon footprints, improving sustainability, following laws related to pollution, climate change, safe waste disposal, safe disposal of hazardous material, safe water treatment and have relevant insurance policies in place. The Paris Climate Agreement has been a major step forward as it represents the first universal agreement on climate change. Bouygues Immobilier has already committed itself to the agreement. This agreement will make it necessary for companies to analyze their environmental standards with greater stringency. Recycling and waste management will have to be made a part of regular operations, especially for units located in urban areas. Bouygues too will have to reframe its strategies to ensure they comply with the new standards with a greater focus on the capital goods sector. The European Union has also set up several new laws for waste disposal which will have to be adhered too. Individual countries have also followed suit, with Germany having set out extremely strict laws for waste management in urban regions. Product innovation has also been affected by the changing environmental criteria. New products now focus on following environmental standards as opposed to traditional value propositions. Bouygues can use this changing trend to concentrate more on developing and using renewable energy. The Dutch government announced plans to double its renewable subsidies from €2bn to €4bn in March 2020. Bouygues Construction can benefit from this increase. Germany has also proposed subsidies for investments made in the renewable sector which Bouygues can utilize.

2. Growing importance of Sustainable construction standards: Maintaining sustainable construction standards is very important as building have significant impacts upon the environement both directly and indirectly. The entire construction process is also very energy and resource intensive with all phases like construction, occupancy, renovation, repurposing, and demolition using lots of water and energy. Waste generation is also high with certain processes releasing high amounts of harmful emissions. Also these have made it necessary for construction companies to adopt some kind of green building standards and sustainable designs. The 2018 International Green Construction Code (IgCC) has been a major milestone within the industry. Bouygues is also doing its part by offering products that are low carbon and which make us o bio-sourced materials that can be easily recycled or reused. In fact it has made “protecting the environment” a part of its vision. The BIM (Building Information Modelling) process is already been used in the Paris Philharmonic Hall, Singapore Sports Hub, and Amiens University Hospital Centre. It is also making significant us of renewable energy for its storage systems. Bouygues Immobilier is a leader for the Green Office® positive-energy commercial property concept. Bouygues Energies & Service is also working on what is known as the Elsa project, which collects used batteries from electric vehicles and repurposes them in buildings to create energy-storage systems.