MHB EXPORT PLAN 2016

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Export plan MhbExport plan for MHB, for the business unit: Inside Façades, to export to the UK.

Jeanne VermeulenAntoine ScalaLisette van de Wiel

IBL – EC1 – Group C2Avans Hogeschool‘s-Hertogenbosch

PrefaceIn the second semester of the third year of the bachelor education: International Business and Languages, Avans University of Applied Sciences, the students will fulfil the project PACE. As part of this project, the classes will be divided into several groups. A company with an associated, current business problem will be assigned to each of these groups. Each group has the responsibility to give their company the most suitable advice, depending on the problem/situation, to help their company the best way they can. The students will be given a total of 20 weeks (one semester) to fulfil this project.

This research has been carried out for the company MHB, located in Herveld, The Netherlands. MHB develops and produces its own steel profiles for windows, doors and façades as well as closing and locking systems. After a successful expansion of the business unit ‘Outside Façades’ abroad, the business unit ‘Inside Façades’ wants to do the same to the UK. This report contains all the relevant issues that lead to the best recommendation for the business unit: ‘Inside Façades’ of MHB to export to the UK.

Our special thanks go to the employees of MHB, with in particular Remko Mathijssen, for providing all the information requested and for giving insight into the current situation of MHB. Secondly, our thanks go to William Aarts and Nelian Smit for their guidance during this project.

Directions for useIn this project, desk and field research is to find the information that was required. Desk research is mainly obtained by documents about MHB and its competitors and the metal and steel industry in the UK. Also, The World Factbook is often used to do research after the relevant factors (demographic, economic, environmental, political, social, cultural and technological factors) in the UK. Besides desk research, multiple interviews are taken to gain more information about MHB’s stakeholders, such as competitors, architects, people from the government and contractors. All these interviews can be found in the appendix.

To ensure that no communication errors will be made while reading this project, the following instructions are given:

- ‘UK’ means England, Scotland, Wales and Northern Ireland. ‘England’ is used to give information about this specific country.

- All figures and graphics that are related to the text can be found in the text, not in the appendix.

- All of the sources that are used for this project can be found with the text for which the source is used and in the bibliography.

Management summary

EXPORT PLAN MHB - INSIDE FAÇADES 1

This export plan is made in order to advice MHB about the best way to export its SL30 design to England. The company which was founded 350 years ago develops and produces its own steel profiles for windows, doors and façades. MHB is operating in the commercial construction sector (utility sector). The broad range of products is divided in two business units: inside façades and outside façades. The business unit outside façades is already exporting successfully in Europe and America and now the business unit inside façades wants to do the same. This export plan provides MHB an entry strategy on how to export its inside façades to England. The main purpose is to generate more revenue, but MHB also wants to gain more brand awareness and develop and maintain long-term relationships.

MHB decided to export its SL30 series to England because it has the same regulations regarding fireproof products and the commercial construction sector is growing fast. Thereby, the company may use its experience from the outside façades. MHB provides its customers with a complete service package, which includes the delivery, installation, information about the product and after-sales service.

The purchase process goes as follows: An ordering party which can be for example a hospital or a university, makes the demand of the construction of a particular building public. Architects can reply on this demand by making sketches. The most suitable sketch gets the opportunity to execute his idea. The architect will communicate with the contractor about the financial part of the equipment, because the contractor has strict budget orders to follow. These orders are given by the ordering party. When all the equipment is checked and approved by the contractor, the needed equipment will be ordered by the suppliers.

The English commercial construction industry is recovering after the setback of the recession and a growth in the demand of buildings can be observed in several areas in England. The industry does suffer a bit from the rising numbers of imported steel from China, this number is growing with every year. The market is composed out of many competitors which employ more than 16,200 workers. The bargaining power of suppliers and the rivalry among indirect competitors is high and the bargaining power of the buyers and the threat of substitutes are quite high too. The rivalry among direct competitors is low, because there are almost no companies that combine a small façade with several technical specifications.

The main target group of MHB is going to be commercial sector, only private companies are operating in this sector. The commercial construction contributes for an amount of 29% of the total construction sector while the non-residential activities within the public sector only account for less than 11%. There are around 12.700 companies active in the commercial construction industry in England. Within this market there are a few big players like Balfour Beatty plc, Carrillion plc, Kier Group plc and Morgan Sindall Group. Together they are having a market share of almost 20%. Therefore, MHB needs to make sure these corporations will notice the SL30 design. The commercial construction sector is represented the most in the region Greater London with an amount of 24% related to the total construction sector in this area. The second largest commercial construction sector has been detected in the North-East (22%) and the North-West follows with a third place with an amount of 19%. Both the regions North-West Greater (6.3%) and London (5.7%) expect a high growth the upcoming years.

MHB should also position itself in the eyes of the architects because most of the time they are in charge of the product choice. The architectural market in England contains few large-scale multinational players but overall many small-scale firms operating in this market. Currently, London is the most booming city concerning architectural activities. 14 000 architects are currently operating in this city. In the North-East only 400 architects active, and the North-West 4000.

The main focus will be on London both architectural firms as construction companies are well represented in this city.

MHB will start making profit in 2017 because in the first year the company first need to gain more brand awareness by its customers.

Table of Contents1. Problem analysis......................................................................................................................6

1.1 Relevance.............................................................................................................................6


1.2 Objective..............................................................................................................................61.3 Problem statement...............................................................................................................61.4 Research questions..............................................................................................................6

Internal Analysis..................................................................................................................................82. The core business of the company...........................................................................................83. The mission and vision of the company...................................................................................8

3.1 Mission.................................................................................................................................83.2 Vision.......................................................................................................................................8

4. The phase of the industry life cycle of MHB.............................................................................85. Unique selling points of MHB....................................................................................................96. The marketing-mix of the SL30 of MHB..................................................................................10

6.1 Price......................................................................................................................................106.2 Promotion..............................................................................................................................106.3 Product..................................................................................................................................116.4 Place......................................................................................................................................12

7. The key figures of the company.............................................................................................127.1 Profitability of MHB................................................................................................................127.2 Liquidity ratios.......................................................................................................................137.3 Solvency ratios......................................................................................................................13

External Analysis...............................................................................................................................148. Justification of the country (inside the UK).............................................................................14

8.1 Restrictions regarding fire resistant steel.................................................................................148.2 Duty rates.................................................................................................................................148.3 Relevant figures per country....................................................................................................14

8.3.1 Wales..................................................................................................................................158.3.2 Scotland.............................................................................................................................158.3.3 England..............................................................................................................................15

8.4 Costs of transport.....................................................................................................................158.5 Employment in the construction sector....................................................................................158.6 The annual average output of the construction sector.............................................................168.7 Size of the (commercial) construction sector...........................................................................17

8.7.1 England..............................................................................................................................179. Relevant macro factors for MHB in England..................................................................................18

9.1 Demographical factors in England that influence MHB............................................................189.2 Economical factors in England that influence MHB..................................................................199.3 Social/Cultural factors in England that influence MHB..............................................................20

9.3.1 Differences between the business cultures of England and The Netherlands....................209.3.2 The rise of the demand for eco-friendly construction methods and materials...................20

9.4 Ecological factors in England that influence MHB.....................................................................209.5 Political factors in England that influence MHB........................................................................21

10. Industry Analysis.........................................................................................................................2110.1 Classification of the industry..................................................................................................2210.2 Industry situation....................................................................................................................22


10.2.1 Industry of metal doors and windows...............................................................................2210.2.2 Locations of manufacturers of façades in England...........................................................22

10.3 Industry factors......................................................................................................................2210.3.1 Profitability.......................................................................................................................2210.3.2 Locations..........................................................................................................................2310.3.2 Growth..............................................................................................................................2310.3.3 Sensitivity to economic factors/political factors...............................................................2310.3.4 Durability..........................................................................................................................2510.3.5 Seasonality.......................................................................................................................25

10.4 Stakeholders...........................................................................................................................2610.4.1 Competitors......................................................................................................................2610.4.2 Suppliers..........................................................................................................................2610.4.3 Customers........................................................................................................................2610.4.4 Government.....................................................................................................................26

10.5 5 Forces Model – Michael Porter.............................................................................................2710.5.1 The threat of new entrants...............................................................................................2710.5.2 Bargaining power of buyers.............................................................................................2810.5.3 Threat of substitutes........................................................................................................2810.5.4 Bargaining power of suppliers..........................................................................................2910.5.4 Rivalry among existing competitors.................................................................................29

11. Market Analysis...........................................................................................................................3011.1. Customers.............................................................................................................................30

11.1.1 Direct buyers....................................................................................................................3011.1.2 Indirect buyers.................................................................................................................3211.1.3 What and why..................................................................................................................3411.1.4 Where...............................................................................................................................3511.1.5 When................................................................................................................................3711.1.6 Buying power...................................................................................................................37

11.2 Competitors............................................................................................................................3711.3 Distributors.............................................................................................................................41

11.3.1 Entry strategies................................................................................................................4111.3.2 Direct export....................................................................................................................4111.3.3 Indirect export..................................................................................................................4111.3.4 Cooperative export...........................................................................................................4211.3.5 Distribution in the market for metal façades, doors and windows...................................4211.3.6 Transport in the United Kingdom.....................................................................................42

12. SWOT-Analysis.............................................................................................................................4212.1 Strengths................................................................................................................................4212.2 Weaknesses............................................................................................................................4312.3 Opportunities..........................................................................................................................4312.4 Threats...................................................................................................................................43

13. Confrontation matrix...................................................................................................................4314. Strategic options..........................................................................................................................45


15. FOETSJE – Model..........................................................................................................................4815.1 Explanation of the weight factors...........................................................................................4815.2 Application of the FOETSJE-model..........................................................................................4915.3 Conclusion..............................................................................................................................50

16. Concept Export plan....................................................................................................................51Entry Strategy................................................................................................................................51Target Market.................................................................................................................................51Objective........................................................................................................................................51Customer intimacy and product leadership....................................................................................52Action plan......................................................................................................................................54Financial planning upcoming years................................................................................................57

Nett turnover...............................................................................................................................57Costs...........................................................................................................................................57

Bibliography.......................................................................................................................................59

1. Problem analysis1.1 Relevance

MHB was established 350 years ago and their headquarters are located in Herveld, The Netherlands. The company develops and produces its own steel profiles for windows, doors and façades as well as closing and locking systems. The company is divided in two business units: one is specialized in


outside façades and the other one is specialized in inside façades. The business unit ‘outside façades’ is already exporting to several countries in Europe and America. The business unit ‘inside façades’ now wants to take the first step to exporting too, in order to increase sales and to gain more brand awareness. MHB wants to do this with their main product: the SL30, a slim façade that also features fire- and sound-proof systems which is mostly used in the utility sector.

After several researches MHB has chosen to export to the UK. This is mainly because of the comparable restrictions regarding the fireproof regulations and the growth in the utility sector in this area. MHB wants to investigate their business opportunities in the UK by making an export plan.

1.2 ObjectiveTo give an advice about the best way MHB can enter the UK utility sector with their SL30 product series and about the most suitable positioning strategy the company can use in this area. This will be given in the form of an export plan which will be handed in to MHB and Avans at the 27th of May. A presentation about the conclusions and recommendation will be given one week afterwards.

1.3 Problem statementTo get insight in relevant factors, both general as related to the construction market, of each country within the United Kingdom. Secondly, the relevant macro factors of England have to be mapped out. Furthermore, the current situation of the steel industry in this country needs to be described as well as the stakeholders related to this industry. Meanwhile, there need to be gained data about the (commercial) construction market in England. To conclude with, there should also be gained information about important trends and developments in both the steel industry as the construction market.

1.4 Research questionsInternal Analysis

1. What is the core business of the company?2. What are the company’s mission and vision?3. What is the phase of MHB in the industry life cycle?4. What are the unique selling points of MHB?5. What is the company’s marketing mix?

5.1 Price5.2 Promotion5.3 Product5.4 Place

6. What are the key figures of the company?6.1 What is the profitability of the company?6.2 What is the liquidity of the company?6.3 What are the solvency ratios of the company?

External Analysis

7. On what country or area in the UK does MHB has to focus itself?7.1 What are the restrictions regarding fire resistant products in each country? 7.2 What are the duty rates per country? 7.3 What are the relevant economic figures per country? 7.4 What are the costs of transport per country?7.5 How is the employment in the construction sector in the UK divided?7.6 What is the annual average output per sector in the UK?7.7 What is the size of the commercial construction sector in the UK?

8. What are relevant macro factors for MHB in England?8.1 What are relevant demographical factors in England that influence MHB? 8.2 What are relevant economic factors in England that influence MHB? 8.3 What are relevant social-cultural factors in England that influence MHB?


8.3.1 What are the differences between the business cultures of England and The Netherlands?

8.3.2 What are current trends in England?8.4 What are relevant ecological factors in England that influence MHB?8.5 What are relevant political factors in England that influence MHB?

9. What information about the industry that MHB finds itself in can be found?9.1 To which industry can MHB be classified?9.2 What is the current situation of the steel industry in England?9.3 What are the relevant factor of this industry for MHB?

9.3.1 What is the profitability of this sector?9.3.2 Where are the most companies that are operating in this sector located?9.3.3 What are the growth possibilities of this sector?9.3.4 Is there a big sensitivity to economic and political factors?9.3.5 What is the durability of the products that are made in this sector?9.3.6 Is the sector bounded to seasons?

9.4 Who are the stakeholders of this industry?9.4.1 Who are the competitors?9.4.2 Who are the suppliers?9.4.3 Who are the customers?9.4.4 What is the connection between this sector and the government?

10. What information about the market that MHB finds itself in can be found?10.1 Who are the customers?

10.1.1 Who are the direct buyers?10.1.1.1 Public sector10.1.1.2 Leading companies

10.1.2 Who are the indirect buyers?10.1.3 What and why?10.1.4 Where?10.1.5 When?

10.1.5.1 What does the internal process looks like?10.1.5.2 What does the external process looks like?

10.1.6 How does the buying process works?10.2 How can the competitors be analysed?10.3 Who are the distributors?

10.3.1 What are the entry strategies of the competitors?10.3.2 Why should a company choose for direct export?10.3.3 Why should a company choose for indirect export?10.3.4 Why should a company choose for cooperative export?10.3.5 How does the distribution in the market of metal façades, doors and windows

work?10.3.6 How can the transport to the UK be regulated?

Internal AnalysisFactors that are influencing or describing the internal situation of the company will be described in the following chapter. First of all, a general view of the company will be outlined. Furthermore, the price, promotion, product range, place and the financial situation will be described.

2. The core business of the companyMHB was established 350 years ago and their headquarters are located in Herveld, the Netherlands. The company develops and produces its own steel profiles for windows, doors and


façades as well as closing and locking systems. The company is divided in two business units: one is specialized in outside façades and the other one is specialized in inside façades. The business unit ‘outside façades’ is already exporting to several countries in Europe and the United States. The company has two managers who are both responsible for different business tasks. Mark Mathijssen is responsible for the execution part of the products MHB is delivering. Remko Mathijssen is the commercial manager of the company. The company can be classified as one of the biggest players concerning manufacturing steel profiles in the Netherlands. Furthermore, the company has around 150 employees, divided by a labour force of 120 people and 30 people who are working in different sales and marketing departments of the company.

3. The mission and vision of the company3.1 Mission

“As a leading player in the market, our customers rely on the performance of our products and services. To remain constantly in motion and to continue to play our leadership role, we need people who share the same passions innovative craftsmanship and high-end production.” (MHB)

3. 2 Vision ‘More Light’ with beautiful steel doors and windows letting more light in thanks to ultra slim steel profiles. ‘More Light’ also stands for sustainability and corporate social responsibility. These are important themes that have a major impact in the development of our products: low energy costs for our customers, sustainable materials (100% recycled steel) and very little waste results. Each year, an even more sustainable production is our goal.” (MHB)

4. The phase of the industry life cycle of MHBConcerning the Dutch market MHB can be placed in the maturity phase of the industry life cycle. This can be concluded by investigating the following factors: their growth, their product portfolio, the entry barrier of the industry and their market share.

Figure 1: Example of the industry life cycle

Source: (Veldman, 2010)

Looking at the table below, it shows the company’s results from previous years. MHB had a tough time during the years 2009 till 2012, this can be linked with the crisis in the building sector. Luckily, the company recovered and increased both their gross operating income as their

operating income. Nevertheless, the growth of the company can be described as low because


except for this external factor, the building crisis, MHB has a stable profit and loss account without a lot of increases of decreases in their (gross) operating income.

Year Gross operating income

Costs Operating income

2007 21.269.852 18.889.893 2.379.959

2008 22.209.406 19.860.225 2.349.181

2009 10.467.971 9.119.644 1.348.327

2010 10.560.125 8.675.821 1.884.304

2011 10.224.010 9.994.965 229.045

2012 10.337.721 9.827.797 509.924

2013 13.432.502 10.144.768 3.287.734

Figure 2: Financial results of MHB 2007-2012

Sources: (PwC, 2007), (PwC, 2008), (PwC, 2009), (Baker Tilly Berk, 2010), (Baker Tilly Berk, 2011), (Baker Tilly Berk, 2012), (Baker Tilly Berk, 2013)

Furthermore, MHB is manufacturing the same products, steel façades, windows and doors, for many years. Nevertheless, they also want to be broadminded and innovative. Their latest development is the SL30 design and this design was developed around 15 years ago. The company tries to investigate in their product portfolio every 10/15 year. Although, the company created the SL30 design, their product portfolio can be categorized as quite standard.

Thirdly, the company is active in the metal windows and doors industry because their façades, doors and windows are all manufactured by the use of steel (steel is an element of metal). This industry has a high barrier because of the capital expensive materials and the knowledge about the products.

MHB belongs in the top 3 of companies who are active in the industry for manufacturers of metal doors, windows and façades in the Netherlands. For that reason, there can be concluded that MHB has a big market share and is an important player in the industry there are operating in.

5. Unique selling points of MHBLike mentioned before, MHB is a big player in the Dutch market of steel profiles. This can be related to the fact that MHB produces a lot of thin designs. The company noticed the attractiveness of transparent façades by architects around 10 to 15 years ago and started investing in another design. This development resulted in another product called SL30, which is an ultra-thin, burglar proof and fire resistant indoor façade. Those elements, especially the thinness of the product, can be determined as their USP. Architects often want a lot of light illumination into their buildings and the SL30 is perfect to create such an effect. Because of the small design, the façade can be provided with more glass in comparison with normal façades. (MHB, 2016)

The fire resistant element is also really wanted in the construction sector these days. The company already tested their façades on fire resistance, which they did with the organization TNO (Nederlandse Organisatie voor Toegepast-Natuurwetenschappelijk Onderzoek).

The TNO approved their SL30 façades so they can manufacture and sell those profiles with a fire resistance label. With this benefit they are ahead of many other companies in The Netherlands. FMHB has also adapted burglar proof specifications into their design: for example, they made burglar proof doors for the Supreme Court in The Hague. (Mathijssen, Interview I, 2016), (Mathijssen, Interview II, 2016)


6. The marketing-mix of the SL30 of MHB6. 1 Price The fire resistant model costs the company between €600,- and €800/m² to produce. This includes the frame and glass which are parts of the final product and the installation. It is easier for the company to make a “total package” (producing of the façade, the installation of the glass into the façade and the installation of the total façade). The steel is mostly purchased in the Netherlands, sometimes in Switzerland, which enables the company to reduce its transport costs and make more profit.

MHB can sell framed and glazed windows or doors for €2000,- or even €3000,-,. It depends on architect’s wishes and needs. MHB tries to make 10% profit on their products sales but sometimes it can happen that their profit decreases. It is also possible that they make more money than expected: prices remain the same, it is all about taking risks.

MHB is not practicing discounts when they are selling per unit. When they are working on big projects the price will logically go down, due to a bigger order.

6.2 Promotion The general marketing department is totally new. Because of this, MHB does not have a clear marketing policy at this moment. Nevertheless, there are a few guidelines: using the same logo and an open and honest communication with the customer.

As the CEO of the company, Remko Mathijssen said: “We are not very active towards our marketing activities. We want to explore this but it is not our main goal. It is better to sell the SL30 directly to the customers because the SL30 is a specific product with a lot of technologies which needs to be explained in details to the customers. Secondly, the fire resistant factor is also an important specification which needs to be explained clearly.”

MHB uses several ways to promote their company. The main goal of their promotion is to reach architects, because they are the ones that are going to recommend the products of MHB. First of all, MHB participates on multiple fairs for construction companies and architects to promote their products. These fairs take place in countries all over the world and MHB participates on two or three of these fairs, each year.

Secondly, the company can be found on the internet. Their website, http://www.mhb.nl, is very modern because of the many visuals. The website covers the complete product portfolio, it shows multiple projects that MHB has done, it gives information about the engineering part that MHB can do, it gives information about the company itself and it shows how to communicate with the company. The site also give an opportunity to translate it to English; the site then changes automatically to a more ‘outside façades oriented’ site, because this business unit is the only one that exports abroad.

Beside their ‘normal’ website, they are also active on several different platforms. They have an account on http://architectenweb.nl/, a site that promotes projects and products of companies in the construction sector (constructors, architects, suppliers). MHB is also active on three comparable websites, www.archello.com, www.houzz.com and www.archiexpo.com. These websites are very useful for MHB to promote their selves and also to analyse their competition. Yet, they are not very active on their own profile page on all of these websites. MHB is the most active on www.archello.com. (Houzz.com), (Archi Expo), (Archello), (Architecten Web)

Regarding social media, MHB can be found on Facebook, LinkedIn and Twitter, but they are not active at all. In the figure below, information about these forms of social media can be found.

Facebook (‘MHB – stalen ramen sinds 1938’)

Facebook (‘MHB - steel windows and door since 1938’)

LinkedIn (MHB) Twitter (MHB bv.)

Likes/Followers 49 10 859 206


http://www.archello.com/

http://www.archiexpo.com/

http://www.houzz.com/

http://www.archello.com/

http://architectenweb.nl/

http://www.mhb.nl/

Number of updates

Monthly Monthly Rarely or never Rarely or never

Active since Beginning of 2016 Beginning of 2016 End of 2015 End of 2010

Figure 3: Additional information social media forms of MHB

Sources: (Facebook), (Facebook), (LinkedIn), (Twitter)

MHB is active in CSR but they do not promote this. For example, they designed education programs for children in Romania, they produce durable products, etc. They could promote this to show the other companies that MHB participates on CSR.

6.3 Product The product that MHB wants to export to England, is an indoor façade made of steel with a very slim design (30 – 50 mm). The façade, the SL30-ISO, also meets the demanded requirements to ensure that the façade does not explode, in case of fire. To be more specific, the SL30-series have undergone successfully several fire-resistance tests of 30-, 60- and in some cases (depends on the type of the door) 90 and 120 minutes, in accordance with various European standards (NEN 6069, EN 1634-1). Thereby, the façade is not only fire-resistant, it’s also soundproof (ISO 10140-2:2010).

With the SL30, MHB wants to deliver a façade that is not only practical, but also creates a modern design. With the SL30 MHB wants to give architects the opportunity to give a brighter, industrial or 30’s look to the inside of a building (as well private as business).

A façade does not has to meet specific requirements. But in MHB’s case, they have chosen to produce their façades with fire-resistant, sound- and burglarproof, and sometimes even fall through secure specifications. For the fire-resistant and soundproof products, several standards are drafted.

Regarding fire-resistant products, the European Union has different regulations and standards that test and determine the fire-resistance of products. For example, a fire-resistant façade can be tested to be fire-resistant for 30, 60, 90 and even 120 minutes. These rules are defined in the latest version of the document for fire-resistant products in the EU: NEN 6069:2005 and EN1634-1. The NEN 6069 concerns the experimental determination of the fire-resistance of structural parts and products and the classification of these products. The EN 1634-1 specifies a method for determining the fire-resistance of door and shutter assemblies and openable windows designed for installation within openings incorporated in vertical separating elements. (Brandwerendheidswijzer, 2014), (NEN, 2015)

Regarding soundproof products, the ISO 10140-2:2010. The ISO 10140-2:2010 specifies a laboratory method for measuring the airborne sound insulation of building products, such as walls, floors, doors, windows, shutters, façade elements, façades, glazing, small technical elements, for instance transfer air devices, airing panels (ventilation panels), outdoor air intakes, electrical raceways, transit sealing systems and combinations. (Iso, 2015)

From the moment a constructor decided to work with MHB’s products, MHB will take care of making the right sketches, the production of the right, tailor-made products, and the delivering of the product on the right place. When the façade does not fit, MHB will adjust the product as fast as possible so the constructor does not lose too much time. However, this happens rarely.

6.4 Place 80% of the production takes place in a production factory in Romania, where more than 100 employees are working. Two trucks are constantly driving from Romania to Herveld every week in order to deliver the finished products. The production of the more complex products takes place in Herveld so the staff of MHB can have a better overview of the production. The marketing and the organization also takes place in Herveld. From that place, MHB can provide customers with their products everywhere in the Netherlands.


Currently MHB is only selling their inside façades in the Netherlands and this business unit does not have any partners abroad. The business unit for outside façades is exporting abroad (Austria, Belgium, France, Germany, Ireland, United Kingdom and the United States). In these countries the business unit has partners which sell the products of MHB. MHB sells directly in the Netherlands, and sells indirectly abroad. The distributors are familiar with the products and their technical aspects. In Europe, the transportation of the products goes by truck.

7. The key figures of the companyThere are certain figures that are giving an overview of the company’s financial situation. Those figures are the profitability, liquidity and the solvency ratios. Paying attention to those figures, the company can be classified and of course compared with their competition.

7.1 Profitability of MHB The table below shows an overview of the financial situation of MHB over the last years. MHB had a couple of weak years from 2010 till 2012 but they recovered in 2013. Notable is the fact that the company had a big increase in their turnover in 2011 but their gross margin stayed behind. This can be related to the fact that the company invested in multiple projects that year, those projects were big investments for the company. Nevertheless, the company benefited from those investments in the years 2012 and 2013.

Year Gross margin Profit after tax

Profit share

Net-turnover

Increase/decrease in net-turnover

2010 10.560.125 1.478.316 14% 20.069.458 - 6.4%2011 10.224.010 188.634 1.8% 27.655.713 + 37.8%2012 10.337.721 458.282 4.4% 28.817.252 + 4.2%2013 13.432.502 2.582.944 19.2% 34.984.143 + 21.4%

Figure 4: Financial situation of MHB 2010 - 2013

* The gross margin includes the net-turnover, the changes regarding current projects MHB is working on, production costs and outsourcing costs.

With the Return on Equity the share of profit is being compared with the total equity of the company, this equity is the average of the equity of that year and the year before. Concerning the Return on Equity, it may be said that the higher the percentage the better, because when the profit occupies a higher share of the total equity the company is doing very well. The first remarkable fact is the really high Return on Equity in 2013, their equity doubled regarding 2012 but this is nothing compared their profit, this amount even became 6 times higher than it was in 2012.

Year Return on Equity2010 26.7%2011 3.9%2012 12.5%2013 79.7%

Figure 5: Return on Equity MHB 2010-2013

Regarding the ratios and figures mentioned above, there can be concluded that MHB is making enough profit to survive in their industry. Branch organizations expected a decline in profit for a lot of companies operating in the metal industry. Nevertheless, MHB proved the opposite and recovered strongly with a 4-fold doubling in their profit share. (Rabobank, 2015/2016)

7.2 Liquidity ratios The company is able to pay their short term liabilities. This can be concluded because both their current as their quick ratio are above the average, a current ratio is in general above 1.5 and a quick ratio is above 0.5.


In 2013 the company was having more products in stock than in 2012, this can be concluded because the quick ratio of 2013 was lower than it was in 2012.

Furthermore, the current ratio of the company was also higher in 2012. MHB was more capable of paying their short term liabilities in 2012 than it was in 2013.

Regarding the interest coverage ratio, the company made a big improvement. MHB had almost none interest expenses last year. In comparison with 2012, the company went from a percentage of 10.9% interest expenses of their total Earnings Before Interest Expenses (EBIT) to only 0.3%. There can be concluded that MHB is able to pay off their long term debts.

2013 2012Current ratio 1.9 2.11Quick ratio 1.6 1.8Interest coverage ratio (the higher the better)

297 9.4

Figure 6: Liquidity ratios of MHB 2012-2013

7.3 Solvency ratios As well as their liquidity their solvency ratio also improved. Concerning the solvency ratio, there are two important factors: the debt ratio of a company and the solvency rate. The debt ratio says something about the amount of debt the company is having, all debts will be divided with the total equity. In 2013 MHB had a debt ratio of 0.18, this ratio is better than it was in 2012 because the lower a debt ratio the better. When a debt ratio is lower it means the company is having less debts in comparison with their equity than the year before.

The solvency rate says more about the ability of the company to pay off their long term liabilities. The average solvency rate is around 30%. MHB is doing very well because both 2012 as 2013 are above the average. Another remarkable fact is the big growth the solvency ratio of MHB had in 2013 regarding the year before, this can be linked with the circumstance that they payed off a lot of debts in the 2013.

2013 2012

Debt ratio 0.18 (lower because of a higher equity)

1.15

Solvency rate 44.2% 30.4%Figure 7: Solvency ratios MHB 2012-2013

External AnalysisIn the external analysis will be described what the best country for MHB inside the UK will be, based on multiple relevant aspects. Thereafter, a country analysis will be made for this country and the weak and strong factors of MHB will be explained on the basis of the 5 Forces model of Michael Porter. To gain more information about the industry that MHB is active in, an industry analysis will be made. Also a market analysis will be made to have more specific information about the customers, the competitors and distributors of the industry that MHB finds itself in. In the end, a SWOT analysis will point out all the strengths, weaknesses, opportunities and threats of the outcomes of these analyses.

8. Justification of the country (inside the UK)To figure out on which country within the United Kingdom MHB has to focus their export on, attention have to be payed to some important factors. On the basis of those factors, there can be decided which country, Wales, Scotland or England, can be chosen to export the SL30-series to.


8.1 Restrictions regarding fire resistant steel The restrictions regarding fire resistant steel are not the same in every country within the United Kingdom. The rules regarding fire resistant in Northern-Ireland are different from the ones companies are maintaining in the Netherlands. Fortunately, Wales and England do have the same restrictions as the Netherlands. MHB received their fire resistant certificate via the TNO (Nederlandse Organisatie voor Toegepast-Natuurwetenschappelijk Onderzoek), a Dutch institution which regulates certificates regarding fire resistance. The institute that regulates those rules in the United Kingdom is the IFC (International Firework Consultancy). This consultancy rewrote this certificate of the TNO to British standards which makes it possible for MHB to use their certificate in Wales and England.

8.2 Duty rates The costs to export products, in particular steel, are in every country within the United Kingdom the same. In fact, because the United Kingdom and The Netherlands made an agreement on free trade the company does not have to pay any duty rates. So, this point will not influence the country choice. (Forster, 2016)

8.3 Relevant figures per countryFirst of all, the import figures of the different countries. Steel façades, the product MHB wants to export, can be placed in the category manufactured goods, this amount can be compared by each country. Furthermore, the amount of imports from the European Union each country imports will be compared.

8.3.1 Wales Wales has an import percentage of 19,1% manufactured goods in relation with their total imports, this sector is the second biggest ‘’sector’’ Wales imports into their country within the SITC sections after machinery and transport. It imports 49,8% of their products from the European Union, this amount of imports is the highest percentage of all the Country Groups the SITC uses. (Government UK, 2016)

8.3.2 Scotland Scotland imports 15,5% of their total imports in manufactured goods, this sector is also the second biggest ‘’sector’’ the country imports after machinery and transport. It imports 36,9% of their products from the European Union. This is, like Wales, the highest percentage in comparison with the other Country Groups.

8.3.3 England England imports 10,8% of their total imports in manufactured goods, this is the fourth biggest sector the country imports machinery and transport is the biggest sector followed by miscellaneous manufactures chemicals. It imports 55,2% from the European Union. To get a little closer, London imports 12% of their total imports in manufactured goods, this is also the fourth biggest group

London imports but the city focuses more on miscellaneous manufactures followed by mineral fuels and machinery and transport. Furthermore, the city imports 40,4% of their total imports from the European Union. The imports from the European Union is for both again the highest amount of imports comparing with the other Country Groups. For England and London the difference with the other Country Groups and the European Union is the biggest, so they are both importing the most from the European Union in comprising with Wales and Scotland.

As can be seen in the table below, Wales imports the most in manufactured products but England imports the most from the European Union. It is remarkable that London imports more manufactured goods in comparison with whole England. The city is really orientated at building materials their high amount of imports in the sectors miscellaneous manufactures and machinery products explicates this.

Manufactured goods

Position comparing

other sections

European Union

Comparing other

Country Groups


Wales 19,1% 2 49,8% 1

Scotland 15,5% 2 36,9% 1

England

London

10,8%

12%

4

4

55,2%

40,4%

1

1

Figure 8: Import numbers of different regions UK (2016)

Source: (Government UK, 2016)

8.4 Costs of transportThe transport costs for each country within the United Kingdom are the same, a 20-foot container in US dollar costs in general $1,005 (€1.374,63) per container to export to the UK. Of course, the distance between England, Wales and Scotland are different. Dover, which is located in South-East England, has the closest harbour to the Netherlands. (Data Worldbank, 2016)

8.5 Employment in the construction sector In the figure below, the need for employment in the different areas is shown, and will need to fulfil this earlier mentioned output growth. As expected, London needs the most employment together with the West-Midlands. Scotland does not need many employment which is logical because their output is also really low. Wales is situated between the percentages of England and Scotland with a need of 5,3% employment in the construction sector, notable fact because the annual average output like mentioned before is expected to be very high. This can be explicated by the fact that infrastructure is the most popular sector within the construction branch in Wales and this sector is in general less labour intensive than other sectors. (CITB - UK, 2015)


Figure 9: Expectance of the total employment growth in the UK for 2015-2019

Source: (CITB - UK, 2015)

8.6 The annual average output of the construction sector The annual average output describes the production growth per year in each area. Wales is expecting to have the highest annual average output the following years followed by Greater London and the South-West. Scotland expected to have a growth of hardly 1% in their annual average output. Notable is the big difference between Wales and the other regions, the region is really rising above the rest.


Figure 10: Expectation of the annual average output growth by region (UK) for 2015-2019


8.7 Size of the (commercial) construction sector The commercial sector is for MHB really important because their customers are operating in this particular sector. The commercial sector has a market share of 19% of the total construction branch in the UK. This sector will grow with 4,7% the following years (2016-2019). Scotland has the same market size regarding the commercial sector but the growth of this sector will not be as high as the whole United Kingdom, this can be concluded because the need for employment in this sector is not very high. Wales on the other hand, is a more profitable area for companies like MHB. This region also has a market share of 19% regarding the construction sector and experts expecting a growth of 6% the upcoming years, a lot of sizeable projects will be under development.

8.7.1 England The East of England is a popular area for the commercial sector, this part of the country has a

commercial construction market size of as much as 21% of the total construction sector. They also expect this sector to grow with a percentage of 3,6% the following years. Greater London is also a popular part of England with a percentage of 24% regarding the commercial construction sector. In 2019 this sector is expecting to rise above his pre-recessionary peak.


Overall, the circumstances in England fits the company profile the best. Wales and Scotland are importing more manufactured materials than England but in comparison with the amount England imports from the European Union these numbers become less important. Furthermore, the country is situated nearest to the Netherlands and therefore the cheapest to transport to. The booming building business in London is also an important reason to choice England.

9. Relevant macro factors for MHB in EnglandMHB will export their SL30 to England, therefore a DES(T)EP-analysis has to be made which shows all the important external factors that could influence the company.

9.1 Demographical factors in England that influence MHBEngland has, like a lot of countries within the European Union, to deal with ageing problems. Over the next decade the English society will age steadily. Most of this growth is concentrated amongst the 80’s generation, this generation will grow with 19% by 2020. Also the 50-64 year olds and the 65-79 year olds will grow with significant numbers. One of the main reasons for this growth is rising life expectancy. This can be an opportunity for MHB because the country will need more homes for the elderly.

Over the past 15 years there has been a rise in the numbers of births. This rise is expected to continue over the next few years. The population of England grew more quickly than the UK’s population over the last year. This growth was greatest in the southern and eastern of the country, the lowest growth was seen in the northeast of England. The region London had the biggest population change over the last year (rise of 122 thousand people) followed by South East (rise of 81 thousand people) and the East (rise of 64 thousand people), the region North East grew the least (a rise of only 8 thousand people). All these changes can be significant for MHB, the company definitely has to focus itself on the Southern and Eastern part of the country with a specific eye for


London. The expected baby boom can lead to the need for more hospitals which MHB can take advantage of. (Englandforever.org, 2016), (CIA, 2015)

9.2 Economical factors in England that influence MHBEngland has one of the healthiest European economies: while several countries are struggling with their GDP growth, England has recorded an annual GDP growth of 2.5% in 2015 (England’s GDP: £2,865 billion in numbers). It is the world's sixth largest economy by nominal GDP and the seventh largest by purchasing power parity. It is now the second largest economy in Europe after Germany in nominal terms.

At this moment, the currency rate of the Pound Sterling is GBP/EUR = €1.27. Due to the strong value of the British pound, English companies are

more willing to buy products in euros. This is a big advantage for MHB. (XE Currency Converter, 2016)

The unemployment rate is one of the key success factors within the British economy: this rate is 5.1%, while the European average is 9.1% in early 2016. As compared to 2012, when the unemployment rate was 8.5%, the number showed a real progression.

In 2015, the inflation rate was 0.1%. Also a positive number for MHB, because a favourable inflation rate means a higher purchasing power for the English people, which is a boost for the economy. (The World Factbook, 2015)

The construction sector accounts for 6% of the total British economy, but was hit very hard by the recession of 2008. During this recession, this sector showed a contraction of 17%.

As showed in the graphic below, the construction output of the UK has been slowing for a few months, and decreased in the first quarter of 2016. A negative development for MHB. Fortunately, the United Kingdom comes in third place when it comes to the top export destinations of The Netherlands. 9.7% of all their exported goods goes to the UK. MHB will still be able to benefit from a good trading partnership. (Simoes, 2015)

Figure 11: Construction Output UK


Source: ONS/Bloomberg – 15 April 2016

Regarding the business, the annual growth rate in lending to businesses increased by 0.3% regarding 2015. As a consequence, businesses have been taking advantage of low interest rates to pay off their debts and invest again. This resulted in more productivity in the construction sector which is a positive development for MHB. (ig.ft.com, 2016), (Pearson, Cadman, & Bernard, 2016)

9.3 Social/Cultural factors in England that influence MHB9.3.1 Differences between the business cultures of England and The Netherlands There are several differences between the business cultures of England and The Netherlands that MHB has to take into account. First of all, the British are much more formal and indirect than the Dutch. Dutch people will tell others directly what they think, while British people doing their business at a more well-mannered, considerate way. The salesmen of MHB who are directly in contact with the British should speak to them in a very polite, formal manner.

Another aspect to prevent miscommunications is to make sure that the salesmen of MHB are capable of speaking British-English and not only American-English. There are many statements, jokes and words in English that can be used in American as well in British English, but they don’t have to mean the same.

There are also differences inside the company: in English companies the power lies with the board of directions. Also the decisions that are being made need the approval of the (entire) board of directions. In the Netherlands, companies are not that hierarchical. When making the first contact, the salesmen of MHB should know which person to contact. This would be the person who has the ability to make decisions. (Hofstede, Hofstede, & Minkov, 2012), (Ripmeester, 2015)

9.3.2 The rise of the demand for eco-friendly construction methods and materials Another cultural factor that has to be taken into account, is the awareness of the use of eco-friendly construction methods and materials. Nowadays, companies have to deal with the effects of climate change, resource depletion, pollution and peak oil. In other words, every company should contribute to counteract these problems as much as possible, also in the construction sector.

MHB can take this factor into account by using recycled materials as much as possible and decrease the use of scarce resources for example. Thereby, MHB should not only use these eco-friendly options but also promote this. Several researches have shown that the demand for

sustainable buildings, the use of ‘green materials’, etc. is rising. Architects will have to adapt this too by searching for companies that are using these facilities. (Murray-White, 2016), (Hicks, 2013) (Pearce, 2014)

9.4 Ecological factors in England that influence MHBIn June 2010 the European Union issued a second and final warning to the UK also because of the high air pollution of the city London. London suffers with this problems because of the many industries and power stations that are situated around the city. In July 2014, the department of Environment, Food and Rural Affairs overlooked the dead-line for the air quality limits, this means London has still till 2030 to solve their problems. Nevertheless, a lot of companies are paying attention to this problem. When MHB wants to do business in London, the company has to pay attention to the fact that air pollution is big problem in this area. (The Guardian, 2016)


England wants to be greener but struggles with a lot of air- and carbon pollution problems. The country longs for companies who want to invest in this problem. MHB can focus itself on improving their environmental goals regarding their products and company profile to play along with this trend. Furthermore, England is still behind the times concerning efficient supply chain processes in the building sector. Taking the environmental trend in mind, MHB can combine the two and use their years of experience regarding distribution to make the supply chain more efficient and greener. (Natural England, 2016)

9.5 Political factors in England that influence MHBEngland is one of the great winners of the Second World War. As a result it became a major force in global politics and a permanent member of United Nations Security Council, the North Atlantic Treaty Organization (NATO) and it is a member of the G8. MHB will be working in an internationalized country.

At the moment, a lot of newspapers are talking about the “Brexit”, the fact that United Kingdom could leave the European Union. This will be discussed in a referendum on the 23rd of June 2016. David Cameron, the prime minister, said that he is convinced that the United Kingdom will be stronger and will feel more secure by staying inside a “Re-formed European Union”. The government also wants to avoid a political union and be as independent as possible. Nevertheless, MHB would probably not suffer much under these new circumstances, because the United Kingdom still needs their trading partnerships with Europe. Thereby, the regulations regarding fire resistance are not going to change by the UK leaving the EU. (Pearson, Cadman, & Bernard, 2016)

Business laws and its environment have been created with an investor mind, to make it easier for foreign investments. The majority of multinational corporations based outside Europe prefer to control their European operations from the UK. The United Kingdom ranked 6th out of 189 countries in of ease of doing business in 2015, accorded to the World Bank’s Doing Business indicators. It is a real opportunity for MHB to export in this dynamic area where many companies come together. (Marketline, 2013), (www.xe.com, 2016)

In the 2013 budget, the government approved to lower corporate taxes from 23% in April to 20% in April 2015, which will make the corporate tax one of the lowest among the G20. In order to boost SME’s, the government will also provide an employment allowance of £2000 to all businesses. As a result, MHB will have to lower their tax costs but they will earn more money. (The World Bank, 2016), (CIA, 2015)

10. Industry AnalysisIn this chapter, the situation of the market of metal doors, façades and windows is generally described. MHB finds itself in a very specific industry, therefore it is very hard to make an industry analysis of the company. That is why the relevant aspects of different industries (metal industry, steel industry, and industry for manufacturers of doors and windows of metal) are described in the following text.

10.1 Classification of the industryMHB belongs to two sectors according the Chamber of Commerce in the Netherlands: number 2512 (manufacturer of doors and windows of metal) and number 2562 (general metal manufacturing). In England, the sectors are divided in another way but the sector 2512 is comparable with the SIC (Standard Industrial Classification) section C: 25120 (manufacturer of doors and windows of metal). In this sector 770 companies are active, with 40 companies located in London. (Company Database UK, 2016)


10.2 Industry situation10.2.1 Industry of metal doors and windows Currently, there are 1090 companies that are operating in the metal doors and windows industry in the UK and there are 16,200 employees working in this sector. This industry includes firms that manufacture metal doors, windows and frames (and subdivisions as window shutters, gates, security-doors, metal room partitions). The Metal Door and Window Manufacturing industry is subjected to intense competition from substitute products made from wood, PVC-U, and mostly aluminium. (IBISWorld, 2016)

The sales of metal doors and windows in the United Kingdom has declined over the past decade. In 2016, the industry is estimated to generate a revenue of £2.1 billion. This means an increase of 1.7% compared to the previous year, due to higher building investments and more favourable lending conditions. For the period 2011-2016, it was estimated that this industry would have an annual growth of 3.8%. Between 2010 and 2014, the overall market of doors and windows grew by 4.9%. (KeyNote, 2015)

The industry for metal doors, façades and windows in the UK is dependent on construction output. This contains both the new-build and the repair, maintenance and improvement sectors (RM&I) accounting for significant markets.

The installation of double glazed windows and doors in new buildings has the potential to restrict future demand in the sector, as modern products typically have longer lives. (buildersmerchantsnews.co.uk, 2015)

10.2.2 Locations of manufacturers of façades in England Like mentioned before, the industry MHB is operating in is quite complicated. This industry also includes windows and doors of metal while MHB only wants to export their SL30 design, which is a specific façade. Nevertheless, there are many companies located in England who are manufacturing and selling metal façades.

The 25 most important companies are located all over England. Yorkshire, the Humber and the West-Midlands are the most popular regions. In both regions are 28% of all the companies located so together they are contributing for more than half of the total. Furthermore, the regions the East-Midlands and the South-West of England are both contributing for 16% of the total amount of companies. In the South-East and the North-West is 12% of the companies active. The East of England and Greater London are less popular with a percentage of 8%. Finally, only 4% of all the companies are located in the North-East.

10.3 Industry factors10.3.1 Profitability The industry of doors and windows of metal is in general a sector with a lot of overhead costs, for this reason a company has to make a big turnover to recover the expenses. In the sector MHB is involved in, energy costs are a relatively high debit item.

In the sector ‘manufactures of doors and windows of metal’, there are a lot of small and medium sized companies. Because of this reason, the general amount of the turnover in this sector is quite low. The average profit of a company in this sector is around 3% of their total turnover. With a turnover of 20 million (over the year 2015) and a related profit of 2,6 million, MHB is a big player in this sector. Another remarkable fact is the turnover of those companies in the year 2013: every company had a big decline in their amount of profit. This can be related to the recession in the building sector that year. It is also remarkable that a lot of companies in sector 25120, have a really high amount of debtors noted at their balance sheet. This can be related to the recession during that year. As a consequence, construction companies ordered materials but could not afford to pay immediately. In 2014, they received the outstanding invoices from the construction industry.

Furthermore, a lot of companies in the sector 25120 suffered from the knock-on effect of the recession in the construction sector. Many suppliers of big construction companies did not receive


their money and were left with big outstanding invoices. This resulted in bankruptcies in the branch of manufactures of doors, windows and façades of metal.

Thanks to the upcoming growth in the construction sector, building companies can be more selective with choosing their suppliers and customers. (Atradius, 2016)

10.3.2 Locations Like mentioned before, there are around 40 companies located in London that are involved in the sector for manufacturing doors and windows of metal. Ten of those companies had a negative balance sheet last year, this is already 25% of all the companies involved in the sector. Only four

companies made a profit above 200,000 pounds over the year 2015; Status Windows Limited, Dobler UK Limited, London Architectural Glazing Ltd and Gen-Vent. It can be concluded that there is not a high amount of profitability for these companies at this moment. -new part of (of the new competitors) is going to be add to ‘locations’

10.3.2 Growth The UK imported for 46.712 million pounds and exported for an amount of 28.987 million pounds in doors and windows from steel in the year 2015. In 2013, the amount of imports was around 10,000 pounds lower. So it can be concluded that the industry is carefully recovering. Nevertheless, the price of steel has halved over the past year and both the Yuan and Roble have devalued, keeping the Chinese

competition in mind: this adds further pressure to the steel industry in England. Because the price of steel is halved, the companies within the metal doors, windows and façades industry can buy their raw materials for less money. (Government UK, 2016), (Jonge, 2015)

10.3.3 Sensitivity to economic factors/political factors Currently, the circumstances in the steel industry are not very favourable for England. The industry suffers and a lot of companies had to fire their employees. Those high cuts are a result of the strength of the Pound, relatively high electricity prices, the extra costs of climate change policies, and competition from China - there have been allegations that Chinese steel is being sold in England at unrealistically low prices. Although, importing steel from China is cheaper for companies in England, they are still importing 897 euros a tonne from the European Union in comparison with the amount of 583 Euros a tonne from China.

But when the numbers are compared to the imported steel in the previous year in China, a big augmentation can be concluded: in 2014 the imports of steel were 687.000 compared with 303.000 in the year before. (Bowler, 2016)

The graphic below shows the upcoming steel exports of China in the last couple of years. The country already exports more than the half of the rest of the world does.

Figure 12 : Metal fatigue of China compared to the rest of the world


Source: (Economist, 2016)

Because steel is the main product of the materials that are being produced in the 25120 sector, the sensitivity for economic and also political factors is very high. Steel is a really important export- and import product around whole the world. Big players in the world market of steel are countries like the United States, China and Japan. Tata Steel group is listed at position 11 of biggest steel companies of the world so this Tata UK steel has a lot of power within the United Kingdom. Currently, there are a lot of discussions according ‘’Chinese steel dumping’’ in the European Union. The government of the UK, which includes England, is being accused of reacting too late to this situation MPs (Members of the parliament) conclude. (Ruddick & Stewart, 2016)

There are a lot of accusations regarding the way the British government tackled the higher tariffs on Chinese steel. For companies in the 25120 sector, the current rejection of higher tariffs on importing Chinese steel is an advantage. Because those companies are mostly buying their steel instead of producing it their selves, importing from China is cheaper for them than buying it from English factories. On the other hand, this can directly be considered as a disadvantage for MHB because they want their steel to be cheaper than the competition.

Currently, the modern steel industry is more about high-quality and high-value steel products with higher skill levels than traditional manufacturing levels. This trend can be a factor to fight the hype of “Chinese steel dumping’’. (Donnan, 2016)

The high energy costs at this moment are also a factor that has to be taken into account for energy-intensive businesses like steel producing factories. Secondly, those companies have to pay extra costs because of currently climate change policies. According the UK steel industry the government started too late with compensating the steel industry for those extra costs, so in their opinion the damage is already done.

10.3.4 Durability Steel is one of the most sustainable construction materials coupled to its ability to be recycled: this makes this product one with a long sustainable development. Constructions that involve steel, can easily be adapted because the product is very durable and has minimal ability of disruption by changing buildings. This makes steel a very popular product for construction companies. The steel sector is constantly changing, there are a lot of experts who are dividing their time and effort into giving advice to steel manufactures on durability, sustainability and fire protection about their products. (SteelConstructionInfo, 2015)

Steel can be recycled and reused endlessly. The remnants of steel framings can be transformed into new materials. In England, 96% of the steel is being recovered by recycling. Globally, 50% of the steel is being recycled into new steel components. So in comparison with the whole world, England is doing quite good. Building with steel constructions is in general environmentally better than using other materials. This is because steel is a really light product to build with and for that reason it requires less extensive foundations which makes the building process greener.


There is even a Steel Construction Sustainability Charter (SCSC) to develop and manufacture steel as sustainable as possible. This charter is being developed by the British Construction Steelwork Association (BCSA). There are three different levels within the charter: member, silver and gold. Companies can earn points on their level of working with an environmentally responsibility. Those points can for example be earned by optimising the eco-efficiency of the steel construction life cycle: promoting resource and energy efficiency in steel construction through reuse and multi cycling. (SteelConstructionInfo, 2015)

10.3.5 Seasonality As can be seen in the following chart, the steel industry has a decline around the months September and October, it rises a bit during the months November and December but in January there is a new decline in sales. This is an annual trend. This can be related to the fact that steel is used in the building industry and projects in the construction area. During the spring and summer months, the weather gives more opportunity to build. The steel industry is not the same sector as MHB finds itself in (the market for metal doors, windows and façades). Nevertheless, the seasonality is comparable to the steel sector. Because the low productivity in the construction sector influences the market for manufacturing doors, windows and façades of metal sector.

Figure 13: Steel Industry Seasonality

Source: (Charts Equity Clock, 2015)

10.4 Stakeholders10.4.1 Competitors There are many companies in England that can be classified in the industry of manufacturers of doors and windows of metal. That makes the competition for MHB fierce. Thereby, there are many companies that carry the same product range as MHB does, when looked at the total product range that MHB has. In this case, MHB only wants to export their SL30, which is an inside façade.

However, all the competitors in England that finds their selves in the industry for manufacturers of doors and windows of metal, do not only produce and sell inside façades, but also outside façades, security doors, and other complementary and similar products. This makes the competition even fiercer: MHB has already a


http://www.steelconstruction.info/Recycling_and_reuse

lot of competitors but they are also known for the production of other products and that is why they have probably done more projects in England than MHB’s outside façade business unit. This makes

the brand awareness of the competitors bigger. Likewise, some of these companies have been operating in this industry and therefore they have gained a lot of experience and knowledge of technologies.

10.4.2 Suppliers To create a façade, a company needs a

supplier who can provide them with (fire resistant) glass and a supplier who can provide steel. The glass industry is divided in four main subdivisions: container glass, flat glass, fibre glass and domestic/special glass. Flat glass is used for the building and automotive sector. Currently, there are three companies that produce flat glass in the UK. In 2010, the annual domestic production was almost 1.3 million tonnes. The majority of this production was meant for glazing products for buildings. Regarding the suppliers of steel in England, many parts of the supply chain (raw material suppliers, steel manufacturers, etc.) have ISO 14001 environmental management systems accreditation. The producer of steel in the UK, TATA Steel, is situated in Scunthorpe, England. The steel that is produced by this company goes into a wide range of markets, including the construction sector. (Britt Glass, 2013), (SteelConstructionInfo, 2015), (Tata Steel )

10.4.3 Customers The customers of the manufacturing doors, windows and façades of metal industry are usually construction companies. Most of the competitors of MHB in England, companies that are involved in sector 25120, are working in the Business to Business sector. The major part of those companies are selling their equipment to the commercial sector, both private as to government related projects. The commercial sector had, as one of the few sectors within the construction sector, a rise of 4,7% over the last year. This makes it an attractive market for the industry.

10.4.4 Government The steel industry is decreasing in terms of employment at the expense of the service sector. The biggest steel producers (Tata steel, SSI and Caparo Industries) each announced that there will be more and more jobs in cuts. One in six employees is in the risk to lose his job, due to a strong value of the Pound and the fast growth of China’s production. In the graphic below, the number of employees in steel manufacturing is showed for the past 10 years.

Figure 14: Workers employed in steel manufacturing, 1994-2014


Source: ISSB (UKSteelKeyStatisticsGuide2015, 2015)

The steel industry is struggling with several problems and for that reason the industry needs help. The industry needs: “lower business rates, a relaxation of carbon emissions targets for heavy manufacturers, more compensation for high energy prices, and a commitment that British steel is used in major construction projects” as it is written in a BBC’s article. To answer these needs, the government held a steel summit in Rotherham in October 2015 to discuss what could be done.

In a debate in the House of Commons chamber on the UK Steel Industry in September 2015, the Minister for Small Business, Industry and Enterprise (Anna Soubry) outlined Government policies intended to assist the industry. These policies are ideas to improve the situation of the steel industry, and are not set as official regulations yet.

Compensation for energy intensive industries: make provision to compensate industries which use a disproportionately high amount of energy

Review of business rates: how the business rates system can be changed including an examination of how R&D intensive businesses can be treated more fairly.

Anti-dumping measures: a more rigorous system to prevent particularly Chinese firms selling steel at below market rates within the EU.

Infrastructure pipeline: this is intended to help producers understand steel requirements in the UK over the next decades, enabling capacity planning beyond 2030.

Public procurement and ‘Buying British’: the government tries to purchase steel from UK suppliers where possible and encouraging private sector manufacturers in the UK to use UK suppliers of steel. (gov.uk, 2016), (Bowler, 2016)

10.5 5 Forces Model – Michael PorterMichael Porter uses 5 factors to describe the situation of a company within their industry. Those factors are the threat of new entrants, the bargaining power of buyers, the threat of substitute products, the bargaining power of suppliers and the rivalry among existing competitors. In this paragraph the situation of manufacturers of steel façades will be described according this method.

10.5.1 The threat of new entrants The barriers for a new entrepreneur to entry the market are very high. First of all, it costs a lot of money to purchase all of the production engines and secondly, there are a lot of restrictions regarding fire resistant products that has to be followed. Also, the competitors that are present on this market are existing for years, maybe decades. These companies have gained lots of experience and they developed a technique to produce façades the best way they can. It takes years to develop such new technics. That makes it hard for a new entrepreneur to gain a good position in the market. It is more tempting for an entrepreneur to start a business in another

sector which is less expensive and uses more accessible technics. The number of barriers is surely an advantage for MHB.


10.5.2 Bargaining power of buyers The buyers of the industry are usually commercial companies within the construction sector. There are a few facts that influence the bargaining power of those buyers. For example, the growth within the commercial sector. This can be seen as an advantage for the industry because they will get more projects but can also be seen as a disadvantage because companies within the commercial sector get more power to decide which company they want to work with.

The second notable point is the need for more architects in the construction branch. When the construction branch needs more architects, the architects that are already operating in this branch are most likely to have a lot of power at this moment. They are needed so they can decide which company they want to work with and under which circumstances. Nevertheless, of all the architects in the United Kingdom 35,5% is situated in London; this makes the position of those architects less high than the position of other architects in the country.

Regarding the price of the steel façades, windows and doors, the industry has a low position towards their customers. In general, this equipment only contributes for 5% of commercial buildings which makes it less important for construction companies than other material, which contributes usually for around 10-20% of the buildings.

Moreover, MHB produces fireproof and noise insulated façades which can be provided with triple glazed windows. These are more expensive than the ‘normal’ façades. It is not mandatory to purchase these products with these specifications. As a result, buyers are also able to buy cheaper models.

Furthermore, commercial construction companies are in general large sized. This size advantage tends to strengthen their power. This makes their position in the negotiation process with suppliers better. Companies in the industry MHB will be active in, do not have these kind of benefits.

10.5.3 Threat of substitutes Besides the indoor façades with the fire resistant and noise insulated specifications, there are also companies that are selling the same products but without these technical specifications. These façades are also import substitutes to keep in mind, because buyers don’t have to buy façades which are fire resistant and/or noise insulated. Thereby, façades that are provided with the technical aspect are much more expensive than the ‘normal’ ones. This is a disadvantage for MHB.

On the other hand, the circumstances regarding security and fire resistance are changing, so companies are frequently asking for more specialized materials instead of normal façades and windows. This is a big advantage for MHB.

Façades can be produced out of different materials. Except steel, aluminium, PVC-U and wood are also materials that can be used to make a façade. From those 3 materials, aluminium is the biggest threat because of its characteristics like the flexibility, the stainlessness, ratio resistance rate and the corrosion resistance of the material.

Nevertheless, for the steel and glass façade a made-to-order production is often being used while the aluminium façade is based on serial production. Thus, aluminium façades are technically less demanding but the high amount of repetition within the production process makes it less favourable to use. Moreover, MHB only wants to export their SL30 series, including the fire resistance ability, which cannot be fabricated with aluminium because this material will melt. Therefore, façades made of aluminium will not be a direct threat for the company. (Behling, Brensing, Fuchs, & Ingenhoven, 2015)

10.5.4 Bargaining power of suppliers The bargaining power of the supplier is huge. Because MHB can only use the glass that can fit into their slim design, the possibility to change to another supplier is really small. MHB asks for a tender at their supplier for a certain project and the company gives an indication of the price of these glasses. The supplier of the glass knows that the chance is really big that MHB is going to ask for the implementation of the glass. This is a very weak point for MHB, because the supplier


determines the price of these glasses and there are only a few of these companies that fit the demand of MHB.

10.5.4 Rivalry among existing competitors MHB has a lot of competitors, especially when looked at the substitutes of the products of the company. Because of the many competitors, MHB has little influence on their clients which is a weak factor.

The direct competitors of MHB are the companies who are also selling façades, doors and windows made of steel, which can be combined with the slim design and the applications such as strength, fire resistance and glass confinement. Also the main target group of the direct competitors would be the utility sector and villas.

Not to forget that all the companies that are manufacturing façades, doors and windows out of steel, can also be considered as the competitors of MHB. Even though, those companies are not selling façades they can be a threat for MHB. Because of the growth of their brand awareness as a result of selling their products abroad.

It can be concluded that MHB has a quite weak position when looked at the 5 forces model.

The threat of new entrants

Bargaining power of buyers

Threat of substitutes

Bargaining power of suppliers

Rivalry among existing

competitorsLow Medium Medium High Direct : Low

Indirect: HighFigure 15: MHB’s position on the basis of the 5 forces model

11. Market AnalysisFor the market analysis, information about the non-residential construction market in England needs to be gained. MHB wants to sell their SL30 design to companies who are operating in this market. To understand the situation of the potential customers the 6 W’s of Ferrel (who, what, why, why not, where and when) will be used. There will also be gained information about the competition MHB can expect when they are going to export their SL30 to England. To conclude with, the different ways of entering the non-residential construction market in England will be mapped out.


11.1. Customers 11.1.1 Direct buyers The customers of MHB are active in the non-residential sector, this sector can be divided into two different areas; private construction and public construction. The private sector has a market share of 74% of the total construction output. This sector can be subdivided into multiple types of construction: housing (29%), infrastructure (12%), industrial (5%) and the commercial construction 29%. The final sector is only active in the construction of non-residential buildings. The public sector contributes for 26% of the construction output in the United Kingdom. This sector can also be subdivided into multiple other types: housing (6%), infrastructure (8%) and other activities which include non-residential buildings (11%).

There will only paid attention to the private sector because this sector contributes for around 2.5 times more in the non-residential sector as the public sector does. The diagram below underpins this statement. The sector commercial construction shows a value of 6.4 billion pounds while the other activities in the public sector only contributes for 2.6 billion.

Figure 16: Value of construction output by type of work 2015

Source: ONS, Output in the construction sector

11.1.1.1 Public sectorThe commercial construction market comprises companies that build structures in the form of complexes, malls or any other hospitality venues on their own account or on a fee or contract basis. The industry has a medium level of capital intensity, contractors add most of their value by means of providing projects with specialized construction

skills.

A revenue of 13 billion pounds is expected for the upcoming year. Furthermore, there are around 12.700 companies active in the commercial construction industry with an employment number of 85.000.


As can be seen the in the table below, the commercial construction sector had a output of 21,724 million pounds over the year 2014. This is quite low in comparison with other sectors within the construction market, the low amount can be related with the decrease in privately-financed work for the Defence Infrastructure Organisation as that body has moved to publicly financed procurement methods. Nevertheless, the construction, together with private housing, has the highest expected annual average growth for the upcoming years (4.6%).

Figure 17: Construction output 2015-2019 in the UK

Sources: (CITB - UK, 2015)

11.1.1.2 Leading companiesIn the total commercial construction market there are, like mentioned before, 12.700 companies operating. Among these 12.700 companies, there are a few big players who are leading the market: Balfour Beatty plc. Carillion plc, Kier Group plc and Morgan Sindal Group plc.

- Balfour Beatty plc delivers services essential to the development, creation and care of infrastructure assets, including financing and development, design and project management and construction and maintenance either alone or in partnership and by integrating local supply chains. The company operates through five business segments: Construction services, professional services, support services, infrastructure investments, and corporate activities

- Carillion plc is a support services group with a portfolio of Public Private Partnership (PPP) projects and construction capabilities. The group provides a range of integrated solutions for infrastructure, buildings and services. The company provides its services in areas including health, education and regeneration, road, rail, defense and commercial property.

- Kier Group plc operates across a range of sectors including: defense, education, housing, industrials, power and utilities. The Group is active in three business segments: construction, property and services.

- Morgan Sindall Group is active in the construction and regeneration business, and operates in the public and commercial sectors. The company operates business through five segments: construction and infrastructure, affordable housing, fit out, urban regeneration, and investments.


Their financial situations are described in the table below. As can be seen in the following table, Balfour Beatty plc is the biggest player in the market with a profit margin of 4.0%.

Figure 17: Financial situations of leading companies in the construction sector in the UK - 2014 (in £ million)

Company Revenue Net income Market share Profit marginBalfour Beatty plc 7,264.0 288.0 3.7% 4.0%Carillion plc 4,071.9 127.5 4.8% 3.1%Kier Group plc 2,954.0 10.7 7.2% 0.4%Morgan Sindal Group plc

2,219.0 18.0 3.9% 0.8%

Source: (marketline, 2015)

11.1.2 Indirect buyers The construction company is the official buyer of the equipment MHB is selling but most of the time architects are also playing a big role in the purchasing process.

Figure 18: Buying process equipment MHB

The table above shows the buying process in the non-residential construction sector. This process takes place according the following

steps.

• It all starts with the ordering party which can be for example a hospital or a university. This party wants to develop a new building and hires a contractor and a architect to start the process developing this new building.


• The architect makes drawings of the building and the needed equipment for this building. In the meantime, the architect will communicate with the contractor about the financial part of the equipment. Because the contractor has strict budget orders to follow. These orders are given by the ordering party.

• When all the equipment is checked and approved by the contractor, the needed equipment will be ordered by the suppliers.

• When the equipment is too expensive there will be searched for other materials. *Nevertheless, this almost never happens because of the several previous budget checks.

The power of the architect is quite high in this process. If a contractor rejects the prescribed materials the architect often decides to quit the project. This can be concluded according to information from several interviews with architectural firms. (ibisworld.co.uk, 2016), (Harrison Architects, 2015)

In the whole UK there are currently around 45 thousand architects operating with a Annual Recruitment Requirement (ARR) of 540. This means the United Kingdom needs around 540 architects a year to meet the demand of the construction market. The industry is expected to generate a revenue of £6.4 billion in 2016, up by 4,9% by the previous year. There are 13.302 companies active in this market with an employment number of 71.559. The architectural market in England contains a few large-scale multinational players but overall many small-scale firms operating in niche markets. The four largest players are expected to contribute less than 5% of the total industry revenue in 2016. Nevertheless, many firms have been reinforcing the past 10 years. Some companies have been taken over by bigger firms to fulfil the needs and desires of their clients better than they did before. Most of the companies operating in this market employed less than 10 people. Only 0,4% of all the architectural firms employed more than 100 people. A few big players were the earlier mentioned construction companies are working with are BDP architects, AHR, Mecanoo (officially founded in Delft), Chapman Taylor PLL, Stenton Williams, DLA Design and FCB Studios.

11.1.3 What and why The buyer, the non-residential construction company, wants the equipment of MHB to install into their buildings. The ordering party often has a few guide lines regarding the design of its building.

Related to the S30 series, ordering parties often mentioned factors like transparent, innovatory and sustainable. The architect needs to follow those guide lines and starts making drawings keeping those factors in mind.

The thinness of the SL30 is really popular among architects. Furthermore, the fire and noise resistance and the fact that the façade is burglar proof are also a big influence for the architect to choose the SL30 design instead of a normal façade. Therewith, all those specifications are related to the factors the ordering party requested.

The construction company gets a certain budget from the ordering part. Therefore, this company wants the production of the building as cheap as possible. The most important requirement a construction company has are materials for the best price to quality ratio. Meanwhile, the architects are seeing the building from a total other angle. They want the best materials as possible paying less attention to the price. A few quotes from architectural reviews are confirming this fact. Moreover, quotes collected by means of interviewing Dutch architectural firms are also underpinning this statement.

Central Library Birmingham (architect: Mecanoo)


“Despite what must have been considerable pressure to keep costs under control, it is the façade that appears to have escaped budgetary restraint.’’

HOME Arts Centre (architect: Mecanoo) "In partnership with specialist subcontractors, we integrated marine-grade, colored stainless steel to the outside face of the panel with remarkable aesthetic, cost and program benefits. It saved almost half the façade budget over a traditional rain-screen system."

Manchester School of Art (architect:FCB Studios)“With its vast glazed façade, it is also a building that proudly showcases its students’ work to all who pass by:”a ‘Window on the Arts’.

BBC Headquarters Glasgow (architect: Mecanoo) “The spine of the building was to be a three story high internal street that spanned from the main entrance at the western façade to the eastern glass wall at the riverside, connecting all the major functions of the building.’’

Studio PAS: “We are searching for the best products possible that are fitting into the general image of building. The ordering party gives us certain guide lines we have to follow. An ordering party can for example ask for a sustainable character or rather a historical appearance. Those requirement are we keeping in mind while making the drawings of a building. In the case of MHB, our client demanded us to create a design with as much light as possible adapted in it. We immediately thought of the SL30 design of MHB. If our client disapproved this design we would most likely not be able to continue the collaboration.”

JHK Architecten: “In general, we do not allow any limits regarding the material choice if we have an idea we will implement this into the design of the building. MHB is very flexible with that, they always try to adjust their products so it can fit into our ideas. ”

Rau bv: “Our firm often chooses products that are above the required budget that is set by the ordering party. We seek after the products with the best quality as possible but those how also fit into the design of the building. This combination often costs a lot of money. The contractor sees this from a different perspective. Sometimes, it is possible to change certain materials but when the contractor asks for too many changes we will have to end the collaboration of the project.”(BuildLLC, 2018), (Studio PAS, 2016), (GVB Architecten, 2016), (JHK Architecten, 2016), (Rabobank Geldrop, 2016), (Mulders van den Berk Architecten, 2016), (RAU BV, 2016)

11.1.4 Where The commercial construction sector is most booming according the figures described in the table below in the region Greater London followed by the North-East and on the third place the North-West of England. In general, the whole United Kingdom has a productivity in the commercial construction sector of 19% regarding the whole construction sector. The regions Greater London and the North-East are both having more productivity than the United Kingdom in total has.

Although these regions were the biggest in 2013, the expectations for the upcoming years (2016-2019) are different. Yorkshire and the Humber has a lot of potential to become bigger in the commercial construction market because they are having an annual average growth of 6.3% at this moment which is really high in comparison with other regions.

Figure 19: Commercial sector as % of the total construction sector per region in England (2013)

Region Commercial sector as % of the total


construction sector (2013)North-East 22%North-West 19%Yorkshire and the Humber 16%East Midlands 18%West Midlands 18%East of England 16%Greater London 24%South-East 17%South-West 18%


Figure 20: Number of new recruits annually 2015-2019 England


This table shows the need for new projects in different regions in England. In the South-West of the country requires new recruits the most. Secondly, also the North-West and London are both waiting for new recruits to enter the market.

Strongest growth in commercial construction is expected in Yorkshire, like mentioned before, and the Humber (annual average growth of 6.3%), the North West (6.3%), Wales (5.9%) and Greater London (5.7%). South Yorkshire, in particular, seems to be benefiting from the reactivation of retail-led projects mothballed during the recession, while Wales is seeing an upsurge in conference and exhibition venue construction.

The North-East is in comparison with the UK in total the most popular area for the commercial construction sector. This area contributes 22% of their total construction to the commercial sector instead of the 19% that the UK in total contributes.


11.1.5 When 11.1.5.1 The internal processThe standard purchasing process of MHB’s equipment takes place according the following structure:

In general, the process of the first 5 steps takes place in 8 weeks. After the approval of the constructor it usually takes MHB another 2 weeks to start with the production process. When the products are ready, they will be send by truck to the Netherlands where they will be delivered within 3 days.

11.1.5.2 The external processIt usually takes the architects around 2 or 3 sketches to realize the final design of a building. Confirmed by multiple architectural firms, this process usually takes place within one to 5 months.

11.1.6 Buying power The ordering party is the official buyer of the building. This company hires both the architect as the contractor. The architectural firm starts to design drawings of the building which include the required materials. After the firm finished the drawings, it will send the final design to the contractor. Afterwards, the contractor will start building but he still has to follow the budget set by the ordering party. When a contractor thinks the budget will be crossed he has to mention this on time. Followed by this interruption both parties, the contractor and the architect, have to find a solution for this. Sometimes they figure something out and other equipment will be ordered but most of the time the architect will not allow any changes of the design.


11.2 CompetitorsIn the first table below (figure 21), general information (country/offices/partners/products) about MHB’s competitors in England can be found. The companies all have quite the same product range and are all active in England (not all of the competitors have their headquarters located in England, but they all do export/sell their products to/in this country).

This table shows that many competitors have their own offices in multiple countries and even have sales partners in multiple continents. An important factor for MHB, because their competitors are probably very well known around the world. Another issue that arises here, is the fact that seven out of eight companies sell their products via a reseller, in other words, indirect. Also a very important factor for MHB, because they prefer to sell their products direct. This is because the complex products that are produced by MHB, require instruction and explanations that MHB rather wants to give themselves. But if many companies prefer do distribute their products this way, maybe MHB will also find more benefits by selling via a reseller.

As said before, not all of the competitors are located in England, therefore they have to transport their products to England. If possible, this goes by ship. Another possibility is transporting by plane, but the companies only do this when they have to (e.g. when the constructor is in a hurry), since this way of transporting is way more expensive.

Not all of the companies have their annual reports made public, which makes it hard to compare the companies by turnover and market share. Still, there are two companies that clearly have a bigger brand awareness and also have more partners than others: Schüco and Kawneer. Schüco is the most internationalized company and also has the most partners (worldwide).

In the second table below (figure 22), several promotion platforms that are used by the competitors can be found. First of all, the companies all have different account on social media. However, it can be concluded that social media is probably not the best way of promotion in this sector: there are only a few companies that have daily updates and many followers. The main goal of promotion of the competitors is probably to reach architects, but the interviewed architects also indicated that being active on social media is not the right way to do this. That is probably why all of these companies are also active on platforms for architects, constructors and other companies in the construction sector and also try to participate on trade fairs. The architects noted that they are active on these kind of websites and that they also visit trade fairs very often.

Figure 21: Information about the competitors of MHB in England

Name company Country Offices Partners/Distributors Products


(headquarters)

worldwide

1. Forster Profile Systems LTD. (Forster-profile, 2016)

Switzerland Offices of Forster are situated in multiple countries in Europe. They also have an office in Rotherham, England.

Distributors of Forster can be found in Asia, Australia, Europe, North-America, North-Africa and the Middle-East.

-Doors and windows with thermal break-Curtain walls and glazed roofs-Doors and windows without thermal break-Fire- and smoke-proof screenings-Safety doors and windows (burglar and bullet proof)-Doors, windows and curtain walls in stainless steel

2. RP Technik (RP Technik, 2016)

Germany Offices of RP Technik are situated in Germany and Austria.

Partners of RP Technik can be found in Asia, Europe, the Middle-East and North-America. In the England RP Technik is represented by ‘Platinum Sales & Distribution Ltd.’, in Dewsbury/West Yorkshire.

-Curtain wall systems-Façade attachment systems-Façade tower systems of wood and aluminium-Fire-protection systems-Insulated systems-Non-insulated systems

3. Jansen Building Systems (JansenBuilding Systems,2015)

Switzerland Offices of Jansen Building Systems are situated in Switzerland, Turkey and Germany.

Partners can be found in South-America and Asia but mainly in Europe. In England they are represented by: ‘Hub le Bas’ in Bilston and by ‘Schüco International KG’ in Milton Keynes.

-Windows-Doors-Fire protection doors-Façades-Folding and sliding systems

4. Raico (Raico, 2015)

Germany Their headquarters in Germany (that’s the only office).

Sales partners of Raico can be found in Asia, Australia/New Zealand, North-America and Europe. They don’t have any partners in England, but they have done many projects in this country.

-Aluminium, steel or timber curtain wall (fire resistant and burglar resistance)-Glass roof constructions-Aluminium door and window systems

5. Kawneer (Kawneer, 2016)

England Kawneer is part of Alcoa Building and Construction Systems, a supplier of architectural systems, services and building products to the European, North American and North African construction industries. Kawneer/Alcoa has several offices in Europe, North-America and Asia.

From their international offices, they distribute their products throughout Europe, North and South America, China, the Middle-East and North Africa.

-Curtain wall systems-Unitised curtain wall system-Window systems-Sliding solutions-Door systems-Framing systems-Fire resistant systems-Solar shading systems-Blast enhanced curtain wall

6. Schüco (Schüco, 2015)

Germany Schüco has multiple offices in different countries worldwide. They also have an office in Milton Keynes, England.

Schüco is represented by its partners in 80 different countries, worldwide.

-Windows-Entrance doors-Sliding doors-Façades-Conservatories

7. Sapa Building Systems (Sapa Group, 2016)

Sweden Sapa Building Systems is the name of Sapa's business division that specialises in building systems based on aluminium profiles. Sapa has sales offices in Norway, Denmark, Finland and Lithuania.

Sapa Building Systems is represented by multiple partners in Northern Europe.

-Doors-Sliding doors-Windows-Solar shading-Glazed roof-Façades-Fire protection products-Solar BIPV

8. Alsecco (Alsecco, 2015)

England Alsecco has their own office in Staffordshire in England.

- No partners (the company is part of the DAW group of companies, Germany’s largest manufacturer of

- Complete solutions for façade designs and systems


architectural paint).

Figure 22: Information about the promotion of the competitors of MHB in EnglandName Facebook LinkedIn Twitter Other sites Upcoming events

Forster Profile Systems LTD.

64 Like -almost no updates

349 followers – monthly updates

- Archiexpo Ribacpd (cpd

information about the construction industry)

Architonic

Windows, doors and façades event Dubai (18/09/2016-20/09/2016)

BAU Munich (16/01/2017-21/01/2016)

RP Technik 53 likes – weekly updates


Only in France – 24 followers and almost no updates anymore

Kununu (platform for employees in Germany, Switzerland and Austria to share work experiences and circumstances)

Archello Architizer

(past) Polyclose Ghent

(14/01/2016-16/01/2016)

Gevel Rotterdam (27/01/2016-29/01/2016)

Turkeybuild Istanbul (10/05/2016-14/05/2016)

(upcoming) Bau Munich

(16/01/2017-21/01/2017)

Jansen Building Systems

243 likes – weekly updates

350 followers – weekly updates

- Archello Archiproducts

BAU Congress Beijing (04/07/2016-06/07/2016)

Equipbaie Paris (15/11/2016-18/11/2016)

Raico 429 likes – weekly updates



Xing (platform for professional networking)

Youtube Houzz

(past) Ecobuild Londen

(08/03/2016-10/03/2016)

Frontale Nürnberg (16/03/2016-19/03/2016)

Kawneer 979 likes – almost daily updates

3185 followers – almost daily updates

1282 followers – weekly updates

Arcat (building product information)

Architizer

(past)Façades + Los Angeles (28/01/2016-29/01/2016)

AIA National Convention and Design Exposition (19/05/2016)

Schüco 11.171 likes – weekly updates

8580 followers – almost no updates

- Archello Archdaily

(architecture website)

(past)Fensterbau Frontale Nuremberg (22/01/2016)

Light + Building Frankfurt (13/03/2016-18/03/2016)

Windows, Doors & Façades Dubai (18/09/2016-20/09/2016)


Sapa Building Systems

Facebook page per country with around 100 likes per page – almost no updates



Architectenweb Ribacpd

Construction International Vietnam (14/06/2016-16/06/2016)

Façades + AM Boston (17/06/2016)

Alsecco 129 likes – almost daily updates

796 followers – no updates


Archiexpo Ribacpd

- not shown on website -

11.3 DistributorsThrough a good distribution system a company can differentiate itself from its competitors. A good distribution enables to be more efficient, improve the customer relationship if the distributor is high-skilled and reduce costs.

A company can sell their products through different channels. The company can sell directly to end customers or can use an intermediary (agent, piggybacking or even trading company). Moreover, products and services can both be sold online via a website or social media, or offline, through events and fairs.

11.3.1 Entry strategies When a company wants to enter a new market, it has to determine and select which entry strategy is the most adapted. There are different options: direct export, indirect export and cooperative export to penetrate the British market.

11.3.2 Direct export When a company chooses for direct export it will take care of their own exporting activities and it will be in direct contract with the clients in the foreign target market. The firm is responsible for handling the documentation, the physical delivery and pricing policies of the products that will be exported.

Making use of direct export a company has more control of their sales process. Because façades are technical products, especially the fire- and noise- resistant and the burglarproof designs, customers need explanation of the special characteristics and settings. This information can be best provided by the manufacturer of the products itself.

Choosing direct export can also bring along disadvantages. Such as, the time, energy, money and staff resources it will involve. Moreover, local competitors have in general more knowledge of the industry which they can take advantage of. (Scarlett, 2016)

11.3.3 Indirect export When a company chooses an indirect way to export it will outsource its exporting activities. Instead of doing it themselves, they will hire another company such as an export agent or a trading office to perform those activities. This often goes through a local intermediary because they have a lot of knowledge and experience about the industry.

Selling through an intermediary is usually cheaper and a straightforward way to enter a new market. On the other hand, if the intermediary makes any mistakes it will directly deteriorate the image and reputation of the company.


11.3.4 Cooperative export This way of exporting involves collaborative agreements with other firms concerning the performance of exporting functions. Companies can choose between several ways of strategic alliances, like franchising, contract manufacturing or even an acquisition.

11.3.5 Distribution in the market for metal façades, doors and windows As mentioned before, the market of metal façades, doors and windows concerns very technical products. Therefore, many companies operating in this industry sell their products directly to its customers so they can provide them with the required product information. Another remarkable fact concerns the total package service of many companies operating in this industry. Almost every company also provides the installation of the façades, doors and windows next to the actual delivery.

The physical distribution through England itself goes most of the time by truck. Furthermore, the transportation of companies exporting their products to England goes often by boat or truck.

11.3.6 Transport in the United Kingdom In Europe, 74.9% of the inland freight was transported by road in 2013. In the United Kingdom it reached 94.7% of the inland freight, in 2014, which is a record. This is the second highest proportion of national road freight transport across all the EU members.

In 2014, more than 500 millions of tonnes seaborne goods entered harbors in the United Kingdom. Therefore, the country is the second biggest importer of seaborne goods of the whole European Union. Moreover, the United Kingdom imported for 2.4 million tonnes via air transport which makes the country again the second biggest importer of whole the United Kingdom. Finally, the amount of Road transport is six times bigger than rail transport in the United Kingdom. This is a remarkable fact because this amount is in many cases lower in other countries in the European Union. (Ondernemersplein, 2015), (Eurostat Statistics, 2014),

12. SWOT-Analysis12.1 Strengths

MHB has many years of experience in their market, concerning technology, knowledge of their industry and connections.

MHB is one of the few companies that sells a thin design combined with several performance specifications (fire- and noise resistant, burglarproof).

The business unit ‘Outside Façades’ already expanded successfully abroad. The threat of new entrants is low. MHB is very flexible with the adjustments of products.

12.2 Weaknesses MHB does not have a clear marketing policy.


Contractors often find the façades of MHB too expensive. Although the company is very active with CSR, they do not promote this. High bargaining power of suppliers and customers.

12.3 Opportunities Architects want the best materials as possible and therefore they are willing to pay more

for a good product. The demand for sustainable buildings/use of green materials is rising. Companies are paying more attention to the work environment of their employees.

12.4 Threats The availability of substitutes is high. The competition is fierce in England. The (English) competition has more knowledge of the local market.

13. Confrontation matrixFigure 23: Confrontation matrix


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S1: MHB has many years of experience in their market concerning technology, knowledge of the industry and connections. ++ + o -+ -+ 5 2

S2: MHB is one of the few companies that sells a thin design in combination with several performance specifications (fire- and noise resistant, burglarproof) ++ o ++ -+ o 5 1

S3: The Business Unit Outside façades already expanded successfully abroad

o o o -+ -+ 2 2

S4: MHB is very flexible with the adjustments of their products.

+ 0 0 -+ -+ 3 2

W1: MHB does not have a clear marketing policy + o o o o 1 o

W2: Contractors often find the façades of MHB to expensive + + o o o 2 0

W3: Although, the company is very active with CSR they do not promote this.

o + + o o 2 0

Total + 7 3 3 4 3

Total - 0 0 0 4 3

14. Strategic options


Strategic Option 1: two strengths combined with one opportunity (Growth strategy)

Strength 1: MHB is one of the few companies that sells a thin design in combination with several performance specifications (fire- and noise resistant, burglarproof).

Strength 2: MHB is very flexible with the adjustments of products.

Opportunity 1: Architects want the best materials as possible and therefore they are willing to pay more for a good product.

How could MHB make use of its unique combination of the SL30 design (which includes fire- and noise resistance and burglar-proof) to take advantage of the opportunity that architects want the best material as possible and therefore paying less attention to the pe? (Direct distribution)

Product: The SL30 will be exported to England. The products remain the same.

Price: As the company will focus on a customer intimacy strategy MHB should not put the focus on the price of its products but on the relation with its customers. Therefore, the price of the SL30 design will remain the same. The company is not going to provide the customer with discounts and the goal for an amount of 10% will stay the same.

Place: Because the distribution costs need to be as low as possible MHB should transport its products by truck to England. Once ashore, the company will also deliver its products directly to the end-buyers by truck. The company will focus its activities on in London because this city is booming at the moment both for its commercial construction work as for the presence of many events and exhibitions

Promotion: MHB should attend events and exhibitions to gain more brand awareness and to reach potential customers. Those events give the company the opportunity to show its products and impress architects but also contractors and ordering parties. An example of an exhibition in the building sector is the Kent construction expo. Examples of exhibitors of this event are Balfour Beatty, Morgan Sindall and Kier Group plc, some big names in the commercial construction sector. The prices for a stand are increasing from 500 pounds until 1800 pounds. It is also possible to only attend this even without having a stand this is for free. To attend those fairs MHB should hire an ‘’event adviser’’ that is going to support the company during these days. The event adviser will give recommendations about the right people to connect with and the way of approaching companies in this industry. Moreover, he will also take care of all administrative affairs related to those events. (Kent Construction Expo, 2015), (Construct UK, 2016)

Moreover, the SL30 design should be added to the architectural forums the company is already active on such as Archello.com, archiexpo.com and houzz.com. This way of promotion enables the company to anticipate on the increasing use of business to business internet. Nevertheless, the focus will not be on its social media activities because this middle of promotion is hardly used in the industry.

Strategic option 2: one strength combined with one threat (Defend strategy)

Strength: Business unit ‘Outside Façades’ is already exporting abroad successfully.

Threat: English competitors have a better knowledge of the local market.


How can MHB defend the threat of their competitors having a better knowledge of the local market with their strength that their business unit Outside Façades is already exporting abroad successfully? (Indirect distribution)

Product : The SL30 will be exported to England. No adjustments will be made to this product.

Price: The price of the product will also stay the same. The price of the promotion costs will increase, because a third party will be hired to take care of the promotion and the selling of the products of MHB, in England. This reseller will be paid a fixed salary and a commission (fixed percentage of the turnover). This commission is different per market.

Place : The production places remain the same: part of the production is being done in Romania and the more complex products are being produces in Herveld, the Netherlands. The reseller is responsible for the transmission of orders to MHB. The partner cannot keep MHB’s products in stock, because most the products are tailor-made. When the products is finished, it will be transported to England by truck. This is the cheapest way of transportation to England.

Promotion : The promotion of the SL30 profiles will be done by the partner. It is the responsibility of MHB to explain all the features and technical specifications to this partner, the rest of the explanation to the customers will be done by their partner. This retailer has an understanding of his profession, is familiar with the culture of his country and has the right connections. This will ease the promotion process.

Strategic option 3: One weakness combined with one opportunity (Improve strategy)

Weakness: Although, the company is very active with CSR they do not promote this.

Opportunity: The demand for sustainable buildings/use for green materials in England is rising.


How can MHB improve their low activity regarding the promotion of CSR with the opportunity that the demand for sustainable buildings and products is rising in England? (Direct distribution)

Product: The product will not change if this strategic option is going to be executed. The appearance, use of materials and specifications will remain the same.

Price: The price of the product is not going to change. The only thing that will change regarding the price, is the promotion budget. One of MHB’s employees will take care of the promotion part of their activities in CSR. Another option is that a new employee will be hired to do research after all the options for MHB to bring out the best out of this business, regarding the promotion of CSR.

Place: Possible plans for the distribution channel will not change. Most likely MHB will (at least in the upcoming years of exporting to the UK) use direct distribution. In this way MHB itself can provide the service they want the customer to receive.

Promotion: The main thing that is going to change is the way of promotion. MHB will develop their promotion strategy into a strategy that shows their activity in CSR. MHB is already active in CSR, but they do not promote this. First of all, MHB is using a material for their products that is very durable. Steel is long-lasting and does not require much maintenance. Secondly, MHB helps children in Romania, where a part of the production process takes place, by providing them education programs. In the Netherlands, MHB always tries to help students to find a job by providing internships and graduation projects. The company will take advantage when they are promoting this, because there is an increasing number of companies (also in England) that want to work with other companies which are working with a social responsible attitude.

There are several ways to do this. First of all, MHB should exhibit their activities on their website, because multiple architects mentioned that a website is very useful for them, and they find the most relevant information on this platform. Thereby, MHB can also promote this when they are presenting their products at a trade fair, for example. For this way of promotion, an employee will be needed to do research after attending the right trade fairs and the cultural differences between England and the Netherlands.

15. FOETSJE – Model15.1 Explanation of the weight factorsFinancial situation

The financial situation is weighted with an amount of 2 because the availability of financial resources are a key factor to decide whether to export or not. Almost every decision in a company is made from a financial point of view.


Organizational situation

The organizational situation is ranked with an amount of 1 because MHB’s organization is very stable. MHB assumes any possible changes that need to be made in the organizational process, can be adapted quite easily.

Economic situation

The economic situation is quite because MHB is collaborating with several different markets. If the economic environment of England changes it will automatically affect at least one of those markets.

Technological situation

The SL30 design includes several technical specifications, those specifications can be confirmed as MHB’s most important Unique Selling Points. Therefore, the feasibility of technological aspects is a relevant factor for the company.

Social situation

The differences in the social situation between the Netherlands and England is definitely something that should be taken into account. Yet, this factor is seen as less important because the company should be able to adapt to these differences.

Judicial situation

Exporting to another country will bring a lot of judicial decisions along. It is important to pay attention to the differences concerning the English regulations and laws (taxes, import charges, regulations regarding fire resistant products, etc.)

Ethical

Currently, CSR is a booming global trend. Nevertheless, within the commercial construction industry it is more important to focus on the quality of products instead of the image.

15.2 Application of the FOETSJE-modelFigure 25: Application of the FOETSJE-model

Aspect Weight (optional) Option 1 Option 2 Option 3

Financial 2 6 2 4


Organizational 1 1 2 1

Economical 2 4 4 4

Technological 2 4 4 4

Social 1 2 3 1

Judicial 2 4 2 4

Ethical 1 4 4 6

Total score 25 21 24

Financial situation

Looked at the forecasted revenue that is going to be generated, the first option will be the most suitable. In the second option, MHB will have to pay a portion of the sales in addition to the fixed salary that is already being payed to the retailer. Besides, there is a chance that MHB will lose their image and brand awareness when they sell their products through a reseller. The last option will generate the least costs.

Organizational situation

When MHB hires an agent, the company gives the total purchasing process out of hands. In organizational matters, this will be the easiest option. When MHB goes for a direct distribution, they have to do their promotion in England by themselves.

Economic situation

All the strategic options are judged equally because the economic situation affect all situations the same. The currency rate of the pound will give MHB an advantage concerning every strategic option.

Social situation

British people doing their business at a more well-mannered and considerate way than the Dutch do. Therefore option two, exporting through an agent, will be more suitable than selling directly like MHB is going to do with option one and three. British people often prefer quality over price: option one anticipates the best to this fact by providing technical information about product specifications.

Judicial situation

Option two will bring along the most judicial difficulties because of the complexity of an agreement with an agent. Factors like commission rates, INCO-terms and salaries will cause judicial risks along.

Ethical situation

Option three is the most suitable option concerning the ethical situation in England. For this option several new ecological trends will be taken into account by MHB. Such as the demand for sustainable buildings and the rising use of green materials. Option one and two will not anticipate at any ecological trends.

15.3 ConclusionThe FOETSJE-model shows that the company should select the first strategic option which is scored with 26 points. This option is financially the best achievable and also gives MHB the opportunity to add their services to the purchases that are being done by customers. Although the last option also


achieved a high ranking, MHB has to change into a more promotion oriented company when they choose for this option. MHB prefers to keep their product leadership status and wants to keep providing their customers with additional services.

16. Concept Export plan

Entry StrategyMHB will start exporting its products directly to its customers. Using a direct way of export makes the company able to provide its customers with the required technical information. The company has to hire a export manager who will be in charge of the whole export process of the SL30 design. This person has to have the required knowledge of the product specifications therefore MHB should train this manager by providing courses. Nevertheless, the manager still needs to be supported with industry data. This person has to establish contact with buyers and maintain a good relationship with the customers by means of monthly visits. MHB is going to hire a construction consultancy which will provide the company with relevant information about the whole commercial


construction supply chain. MHB’s responsible supply chain manager will receive the needed support so he can target the right customers in the right way.

This strategy enables MHB to enter the British market while remaining its own trade mark and focus on its most successful promotion tool, which is personal selling. The company is going to transport the SL30 profiles the same way it is already doing with the business unit outside. Moreover, there will be no additional cost because of the free trade: the Netherlands and England are both in the European Union.

Target MarketThe main target group of MHB is going to be commercial sector, only private companies are operating in this sector. The commercial construction contributes for an amount of 29% of the total construction sector while the non-residential activities within the public sector only account for less than 11%. There are around 12.700 companies active in the commercial construction industry in England. Within this market there are a few big players like Balfour Beatty plc, Carrillion plc, Kier Group plc and Morgan Sindall Group. Together they are having a market share of almost 20%. Therefore, MHB needs to make sure these corporations will notice the SL30 design. The commercial construction sector is represented the most in the region Greater London with an amount of 24% related to the total construction sector in this area. The second largest commercial construction sector has been detected in the North-East (22%) and the North-West follows with a third place with an amount of 19%. Both the regions North-West Greater (6.3%) and London (5.7%) expect a high growth the upcoming years.

MHB should also position itself in the eyes of the architects because most of the time they are in charge of the product choice. The architectural market in England contains few large-scale multinational players but overall many small-scale firms operating in this market. Currently, London is the most booming city concerning architectural activities. 14 000 architects are currently operating in this city. In the North-East only 400 architects active, and the North-West 4000.

The main focus will be on London both architectural firms as construction companies are well represented in this city.

Objective The future plans of MHB are to make a turnover of 500.000 Euros with the export of its inside façades.

Customer intimacy and product leadershipMHB should positions itself with by using a customer intimacy strategy combined with a product leadership strategy. This can be achieved through providing its customers with tailor made products and offering guarantees, after sales and extra information of the additional product specifications. The company focuses its activities on the quality instead of the price. Moreover, MHB should provide its customers with a “full package” service which includes the production, delivery and installation of the facades.

This strategy is based several statements of such as need for more face to face communication and desirable high quality of products. Those statements are confirmed by several architects and construction companies operating in the commercial construction sector of England.

Product

Concluded, according to both desk as field- research the quality and the thin design of façade are determined as really important factors. Therefore, the SL30 design should remain the same while exporting to England. The SL30 design contains multiple different specifications such as fire- and noise resistance and the fact that it is burglar-proof. Those specifications


need to be emphasized among the potential buyers at the British market. Especially, because Britons focus more on the quality than the price of products. The specifications of the SL30 design concern many technical aspects. Therefore, MHB needs to provide a detailed product description for each individual specification. Moreover, the company should also provide a guarantee for each product it delivers so the buyer is always able to make adjustments. To conclude with, the company should offer after-sales to gain more information of its customers so it is able to keep them satisfied.

Price

As the company will focus on a customer intimacy strategy and product leadership position MHB should not put the focus on the price of its products therefore this amount will stay the same. The SL30 design will be sold for 700 Euros per square meter, for this amount the facade will also contain glass combined with a fire resistance specification and the final installation. The company is not going to provide the customer with discounts and the profit goal of 10% will remain the same.

Place

Because the distribution costs need to be as low as possible MHB should transport its products by truck to England. Once ashore, the company will also deliver its products directly to the end-buyers by truck. The company will focus its activities on London because this city is currently booming for both for its commercial construction activities as for the presence of many events and exhibitions.

By truck the company has to travel around 205 kilometres to reach London this will takes a truck approximately 8 hours.

Promotion

Based on the collected interviews, architects prefer face to face communication over aggressive push marketing tools like sending flyers, brochures and other promotional materials. Therefore, the company should focus on personal selling. Moreover, construction companies declared to only pay attention to familiar brands and products. That is why MHB should gain more brand awareness in the industry by exhibiting its products at events.

Personal selling

The main focus will be on personal selling. Architects will be reached through mails, phone calls and physical meetings. By means of phone calls the company is able to control its foreign activities. Moreover, it is important to be always available by phone if customers have questions or doubts related to product specifications. Additionally, email will also be used to keep the customer up to date. MHB should extend the way they are using e-mails. The company should send its customers mails concerning the order status of the products. First while leaving the factory in Herveld combined with the expected delivery date. Secondly a reminder will be send to check if the products are being delivered without delays and/or defects. Moreover, e-mails are useful to gain feedback from the buyers and architects so the company can improve its weaknesses. To conclude with, e-mails can be sent to potential customers like architects or contractors in order to invite them to visit MHB’s stand for the next exhibition.


The salesman of MHB is going to visit England once a month. During those visits it will gain possible leads, keep the companies its existing customers up to date and provide after-sales.

Exhibitions/Events

MHB should attend events and exhibitions to gain more brand awareness and to reach potential customers. The industry has to get to know the brand MHB and its product range. Those events give the company the opportunity to show its products and impress architects but also contractors and ordering parties. A lot of competitors are already using fairs to present their products and gain potential customers. In England there are several exhibitions related to the construction sector because this sector is becoming more bigger and therefore more important for the economy of England over the past years. (tofairs.com, 2016).

An example of an exhibition in the building sector is the Kent construction expo. Examples of exhibitors of this event are Balfour Beatty, Morgan Sindall and Kier Group plc, some big names in the commercial construction sector. The prices for a stand are increasing from 500 pounds until 1800 pounds. It is also possible to only attend this even without having a stand this is for free. To attend those fairs MHB should hire an ‘’event adviser’’ that is going to support the company during these days. The event adviser will give recommendations about the right people to connect with and the way of approaching companies in this industry. Moreover, he will also take care of all administrative affairs related to those events.

Another example is the London Build show this event has more than 300 international exhibitors thousands of visitors and it provides over 150 conference sessions. This event provides different hubs categorized by occupation such as an architectural hub and a market which is occupied by contractors. Big players in the commercial construction market such as Balfour Beatty and Kier plc will attend both events.

Online marketing

The website of MHB should be divided into two different parts. One category with inside facades and one for the outside facades this will clarify the SL30 design and its business unit for the visitors. Currently, the website is available in English but if you push the button contact it will only give you an overview of the partners who are working with the business unit outside. They should also add more information related to the export of the SL30 design to it. For example, the approved fire resistance specification according to British standards and the events and exhibitions they will attend.

Moreover, the SL30 design should be added to the architectural forums the company is already active on such as Archello.com, archiexpo.com and houzz.com. This way of promotion enables the company to anticipate on the increasing use of business to business internet. Nevertheless, the focus will not be on its social media activities because this middle of promotion is hardly used in the industry.

Action plan

Time Planning 2016/2017Month Action Person in charge

July - Get in touch with the consultancy firm Invennt and request a market investigation

- Start the recruitment process for the export manager

- Hire a export manager

- Book stand for LondonBuild and Kent construction expo

Project group Avans

Department HRM

Management team


August - Train the export manager(both on language as on product knowledge)

Management team

September - Receive the Invennt’s report with market data

- Provide the export manager with the analysis of Invennt’s report

- Add the SL30 design to online platforms Archell.com, Achiexpo.com and Houzz.com

- Add information about its SL30 design to its English webpage

- Start contacting potential customers via mail and phone

- Invite potential customers to the Kent Construction Expo and LondonBuild

- Arrange accommodation, transport and stand details for Kent construction expo and LondonBuild

Management team

Export manager

October - Exhibit at Kent construction expo (6 October) to start building a network

- Exhibit at LondonBuild (26th and 27th of October) to start building a network

- Start using after-sales if products are already sold

Export manager

November - Keep the after-sales service up to date- Visit customers to improve the company’s involvement - Visit potential customer to gain new deals

Export manager

December - Keep the after-sales service up to date- Visit customers to improve the company’s involvement - Visit potential customer to gain new deals

Export manager

January - Keep the after-sales service up to date- Visit customers to improve the company’s involvement - Visit potential customer to gain new deals

Export manager

February - Keep the after-sales service up to date- Visit customers to improve the company’s involvement


- Visit potential customer to gain new deals

March - Keep the after-sales service up to date- Visit customers to improve the company’s involvement - Visit potential customer to gain new deals- Exhibit at EcoBuild (7 till 9 March) to improve brand awareness and gain potential customers

Export manager

May - Keep the after-sales service up to date- Visit customers to improve the company’s involvement - Visit potential customer to gain new deals

Export manager

April - Keep the after-sales service up to date- Visit customers to improve the company’s involvement - Visit potential customer to gain new deals

Export manager

June - Keep the after-sales service up to date- Visit customers to improve the company’s involvement - Visit potential customer to gain new deals

Export manager

July - Keep the after-sales service up to date- Visit customers to improve the company’s involvement - Visit potential customer to gain new deals

Export manager

August - Keep the after-sales service up to date- Visit customers to improve the company’s involvement - Visit potential customer to gain new deals

Export manager

September - Keep the after-sales service up to date- Visit customers to improve the company’s involvement - Visit potential customer to gain new deals

Export manager

September 2017 till September 2018- Maintain exciting customer relationships

- Considering the possibility to start an own sales office abroadSeptember 2018 till September 2019- Maintain existing customer relationships

- (If opened) Hiring extra staff to support the sales office abroad


Financial planning upcoming yearsNett turnover

Worst case scenario (-10%)£ Selling price Purchases Turnover Production

costsNett

turnoverYear

3080 77 237,160 215,600 21,560 20163080 225 693,000 630,000 63,000 20173080 270 831,600 756,000 75,600 2018

General case scenario (0%)£ Selling price Purchases Turnover Production

costsNett

turnoverYear

3080 85 261,800 238,000 23,800 20163080 250 770,000 700,000 70,000 20173080 300 924,000 840,000 84,000 2018

Best case scenario (+10%)£ Selling price Purchases Turnover Cost price Gross

profitYear

3080 94 289,520 264,000 25,520 20163080 275 847,000 770,000 77,000 20173080 330 1,016,400 924,000 92,400 2018


Costs Promotion costs 2016 2017Trade fairsKent exhibition 3825LondonBuild 4590Ecobuild 1836Agency 10,000Total 18,451 1836

* Calculated by the formula (formulated by Red-Cedar) Costs of the stand *3 = total exhibition costs (tradeshowinstitute.com) (kentconstructionexpo.co.uk)

Transport costs Price per km Distance to London

Price per ride Rides on yearly basis

Total

£ 2016 3.09 205 km 633.45 8 5,067.62017 3.09 205 km 633.45 24 15,2022018 3.09 205 km 633.45 24 15,202

Best case 2016 2017 2018Gross profit 25,520 77,000 92,400CostsPromotion 18,451 1,836 -Salary export manager

12,360 37,080 37,080

Transport costs 5,067.70 15,202 15,202Net profit -10,358.70 22,882 40,118

* A salary of an average amount of 3090 pounds a month is chosen for the export manager

(financieel.infonu.nl, 2016)

Worst case 2016 2017 2018Gross profit 21,560 63,000 75,600CostsPromotion 18,451 1,836 -Salary export manager

12,360 37,080 37,080


General case 2016 2017 2018Gross profit 23,800 70,000 84,000CostsPromotion 18,451 1,836 -Salary export manager

12,360 37,080 37,080



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MHB EXPORT PLAN 2016

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