COMPANY PROFILE -Skanska
Business Sector :Construction
Operating Geography :Sweden, Europe
About Skanska :Skanska AB is a Swedish multinational project development and construction company founded in 1887. The company has been managing projects and contracts outside Sweden since 1897. Skanska is the first company in the construction industry to obtain the ISO 14000 environmental certification. The company handles projects in infrastructure, residential property, commercial property and through public-private partnership. Skanska is headquartered in Stockholm, Sweden. It has around 41000 employees and is in operation in more than 11 countries in North America, Nordic region and Europe as of 2016.
Skanska Revenue :SEK 151 billion – FY ending Dec 2016
Competitive Analysis of Skanska
|1. Effective synergies amongst business units and internally amongst divisions|
2. Supplier Code for taking ethical decision
3. Strong order book
4. Reputed globally for Green construction
5. R&D Focus and good information systems
6. Employees ownership programme (SEOP)
|1. Failure to establish itself in developing markets
2. Struggling to improve its operating margin
|1. Growth in construction industry in USA and UK|
2. Increasing urbanization and favorable demographics
|1. Uncertainty in UK market due to Brexit and in USA due to Donald Trump
2. Intense competition in USA market
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Detailed SWOT Analysis of Skanska
1. Failure to establish itself in developing markets: Skanska has been unable to establish itself in developing markets like South America and Asia. Skanska completely exited the South American market in 2016 after booking huge losses due to write-downs due to corruption scandals. Skanska has earlier sold its Indian subsidiary Cementation India in 2004 losing opportunities in what is now one of the fastest growing markets in construction and real estate industry globally.
2. Struggling to improve its operating margin: Skanska was unable to meet its operating margin targets set in business plan for in construction. The operating margin remained at 2.6% against the targeted 3.5%. The low operating margins were due to below because of low operating margin in Skanska USA Civil and negative operating margins in Skanska Poland. The Skanska UK civil is also struggling to keep its operating margins and its weak performance is also dragging the operating margin.
1. Growth in construction industry in USA: The global construction is expected to grow to $8 trillion by 2030 with a lion’s share of growth coming in from China, India and USA. USA is expected to grow faster than the Chinese markets till 2030. The public-private market partnership market in the USA is expected to remain strong. The infrastructure in USA will require huge investments. The US housing market also has bright prospects.
2. Increasing urbanization and favourable demographics: The global trends in terms of demographics and urbanization are expected to favor the construction industry. The world is currently experiencing the high growth rate in urbanization. Now more than half of world lives in cities. This will lead to an increase in demand in infrastructure, housing, education and healthcare sector. Low cost housing solutions like Boklok will be key in success of Skanska in the future.
The unpublished sections of the entire SWOT analysis is available in the 'Complete Report' on purchase.
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Skanska SWOT & PESTLE Analysis - SWOT & PESTLE.COM
SWOT & PESTLE.com (2021). Skanska SWOT & PESTLE Analysis - SWOT & PESTLE.com. [online] Available at: https://www.swotandpestle.com/skanska/ [Accessed 24 Feb, 2021].
In-text: (SWOT & PESTLE.com, 2021)
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Skanska SWOT and PESTLE analysis has been conducted by Saurabh Jain and reviewed by senior analysts from Barakaat Consulting.