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Published by: International Institute for Management Development (IMD)
Originally published in: 2011
Version: 20.02.2013
Revision date: 08-Mar-2013

Abstract

This is part of a case series. NCC Construction Danmark A/S (NCC DK) was one of the leading construction companies in Denmark. Through a difficult five-year period, the company’s CEO Torben Biilmann and his team had transformed this loss-making company into an industry leader in profitability. The company’s EBIT of 4.2% was three times that of its nearest rival. However, this improved profitability had come at the expense of revenue growth. The company’s revenues had fallen from a high of DKK 5.8 billion in 2005 to DKK 2.4 billion in 2010. The company now sought growth but without sacrificing profitability. NCC DK’s top management sought vertical alliances that would help it become the repository of industry knowledge of interest to multiple stakeholders in areas such as architecture, design, engineering, materials, construction, electrical, plumbing, heating and cooling systems, refurbishing and maintenance. Complementing this would be the company’s impressive credentials in sustainability and in virtual design construction (VDC), to help the company tailor its solutions to the particular needs of its customers. NCC DK would thus become a knowledge hub for the industry and leverage this knowledge to deliver inexpensive and yet energy-efficient and customized solutions to business, public sector and residential customers. In the process, the company would contribute to transforming the inefficient and fragmented Danish construction industry, while simultaneously finding new and more profitable growth opportunities for itself. Learning objectives: In evaluating NCC DK’s decision to leverage its capabilities in virtual design construction to attempt to change the rules of the game for the entire Danish construction industry, participants discuss the costs and benefits of being a first-mover. Participants are also asked to analyze the three key challenges facing Biilmann in executing NCC DK’s new business model: (i) fighting industry tradition and inertia, (ii) building true insights into customers’ needs, and (iii) building an internal organization that could deliver the new model. What would the participants do if they were in Biilmann’s shoes? Abandon the idea? Take evolutionary steps? Take a big plunge?
Location:
Industry:
Size:
DKK2.4 billion in 2010
Other setting(s):
2010

About

Abstract

This is part of a case series. NCC Construction Danmark A/S (NCC DK) was one of the leading construction companies in Denmark. Through a difficult five-year period, the company’s CEO Torben Biilmann and his team had transformed this loss-making company into an industry leader in profitability. The company’s EBIT of 4.2% was three times that of its nearest rival. However, this improved profitability had come at the expense of revenue growth. The company’s revenues had fallen from a high of DKK 5.8 billion in 2005 to DKK 2.4 billion in 2010. The company now sought growth but without sacrificing profitability. NCC DK’s top management sought vertical alliances that would help it become the repository of industry knowledge of interest to multiple stakeholders in areas such as architecture, design, engineering, materials, construction, electrical, plumbing, heating and cooling systems, refurbishing and maintenance. Complementing this would be the company’s impressive credentials in sustainability and in virtual design construction (VDC), to help the company tailor its solutions to the particular needs of its customers. NCC DK would thus become a knowledge hub for the industry and leverage this knowledge to deliver inexpensive and yet energy-efficient and customized solutions to business, public sector and residential customers. In the process, the company would contribute to transforming the inefficient and fragmented Danish construction industry, while simultaneously finding new and more profitable growth opportunities for itself. Learning objectives: In evaluating NCC DK’s decision to leverage its capabilities in virtual design construction to attempt to change the rules of the game for the entire Danish construction industry, participants discuss the costs and benefits of being a first-mover. Participants are also asked to analyze the three key challenges facing Biilmann in executing NCC DK’s new business model: (i) fighting industry tradition and inertia, (ii) building true insights into customers’ needs, and (iii) building an internal organization that could deliver the new model. What would the participants do if they were in Biilmann’s shoes? Abandon the idea? Take evolutionary steps? Take a big plunge?

Settings

Location:
Industry:
Size:
DKK2.4 billion in 2010
Other setting(s):
2010

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