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Currie Road Construction Case Analysis

In: Business and Management

Submitted By yycfy
Words 2418
Pages 10
Executive Summary
In December 2008, Martin Cook, president of Currie Road Construction Limited, a B.C. based firm, had to decide soon on the company’s expansion plan due to the anticipated economic stimulus spending in both B.C. and Texas in the coming year. The two primary alternatives are either to enter the U.S. construction industry, particularly the Texas market, or to continue the company operations within Canada.
Currie owns 2.7% of the B.C. market and due to fierce competition, it is extremely difficult to gain market share. On the other hand, Texas has a bigger market with less competition. Texas Department of Transportation is approving road construction projects that worth more than $4.5 billion. With Currie’s experience and specialized techniques in road maintenance, it would have a great chance in securing sizeable market share in Texas. Moreover many companies in Texas are barred from bidding for one to two years due to price fixing and collusion, making it the perfect timing for Currie to enter the market and develop a good reputation. At the same time Currie could better utilize resources such as their specialized machinery that sits idle during the winter.
Brad Carlyle, the proposed GM of the Houston operation understands the U.S. market and has important contacts within the governments and the construction industry. Cook has full confidence in Carlyle. Carlyle also indicated that due to the unemployment rate in Texas, hiring blue-collar employees would be easy and inexpensive.
Entering the U.S. market could potentially give better return and hence Currie would be able to repay some of the $20 million loan, the interest of which has been a major burden on the company’s profitability. By reproducing the B.C. operations in Texas, it would also enable Currie to compete in the neighbor states in the future, thus provide better growth opportunities.

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