Previously we looked at the elaborated marketing strategy of Microsoft, the world’s leading software application provider. Now, let us hop over and look at the elaborated SWOT Analysis of Afcons Infrastructure.
Afcons Infrastructure Limited is a subsidiary business that comes under the Indian business conglomerate Shapoorji Pallonji Group, which is a leading construction and engineering company based in Mumbai, Maharashtra, India.
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Want to see how Afcons Infrastructure has succeeded in the construction industry? In this blog, you will learn about the SWOT analysis of Afcons Infrastructure. Before we get started, learn more about Afcons Infrastructure‘s company, how it was established, its products, financial position, and its competitors.
About Afcons Infrastructure
Afcons Infrastructure Limited provides infrastructure services and is involved in the construction of infrastructure projects such as viaducts, flyovers, metros, bridges, pipelines, roads, ports, barrages, oil and gas projects etc. The group has projects in over 25 countries in Asia, Africa, and the Middle East. It is a leader in Marine, LNG, and Metro Rail in India.
|Chairman||Shapoor Pallonji Mistry|
|No. of Employees||7306+|
|Market Cap||Rs 230.29 Crore (2022)|
|Net Income/ Profit||N/A|
Products & Services by Afcons Infrastructure
Being one of the eldest construction and engineering companies in India providing products & services like
- Oil and gas project
Competitors of Afcons Infrastructure
The company had a monopoly in the market for about 70+ years. The other companies which gave a challenge are
- Gammon India
- Reliance Infrastructure
- Lilama 45-1
- Hyundai Engineering
As now we have a better understanding of Afcons Infrastructure, let’s look into the SWOT Analysis of Afcons Infrastructure.
SWOT Analysis of Afcons Infrastructure
A SWOT analysis identifies a company’s strengths, weaknesses, opportunities, and threats. A proven and true management paradigm that allows Afcons Infrastructure to compare its business and performance with competitors and the industry as a whole.
So let us go ahead and first have a glance at the strengths of Afcons Infrastructure from the SWOT analysis of Afcons Infrastructure.
Strengths of Afcons Infrastructure
Your organisation’s strength is something that makes it stand out from the rest. It can be a competitive advantage that sets it apart from its competitors. Some of the strengths of Afcons Infrastructure are as follows –
- Technology Cluster: Afcons Infrastructure provides services using emerging technologies, embedded intelligence and engineering through its Afcons Infrastructure technology services spread across smart cities in India to provide smart engineering solutions.
- Global Spread: Afcons Infrastructure is spread globally in American, European, Asia, Middle East, African and Oceania regions.
- Sustainable Approach: As said in the introduction above, Afcons Infrastructure sustains a greener portfolio while working towards heavy engineering. The company always tries to ensure a holistic approach toward environmental impacts by reducing its carbon emission and use of water. The company also runs several CSR initiatives to present a positive side of the company.
- Good Returns on Capital Expenditure: Afcons Infrastructure is moderately successful at the performance of new projects and has developed good returns on capital expenditure by creating new revenue streams.
- Genuine Material Suppliers: It has a powerful base of reliable suppliers of raw materials, thus facilitating the company to survive any supply chain bottlenecks.
- Highly Skilled Workforce: Afcons Infrastructure is empowering large resources in the training and development of its employees, resulting in a workforce that is not only highly competent but also motivated to achieve a surplus.
- Government Projects: As the conglomerate is a public limited company and it gets most of the projects and support from the government of India which ensures that the organisation’s profitability is never going to be affected.
- Quality Craftsmanship: Every one of Afcons Infrastructure’s developments delivers the highest level of design and craftsmanship, uncompromising quality, and unparalleled service, putting Afcons Infrastructure in the league of the world’s finest.
- High Level of Customer Satisfaction: Having a committed relationship with their customers helps them to achieve a high level of customer fulfilment among present customers and good brand equity among future customers.
Weaknesses of Afcons Infrastructure
Weaknesses are negative factors that can prevent an organisation from achieving its goals and objectives. Some of these include a poor brand, high levels of debt, inadequate supply chains, and lack of capital. So here are some of the weaknesses of Afcons Infrastructure –
- Operational Inefficiencies: Different projects are running under government intervention and hence they are going with a slow rate of performance and the final output operates inefficiently.
- Local Market Dependency: There is a stable market in the MMR region but if we consider the national scope then it is not that popular in the national market so maybe it would affect them if the localised competitors are working more efficiently in the national domain.
- Less Investment in New Technologies: As the company embarks on its next phase of expansion, it needs to invest in new technologies that can help it achieve its goals. Currently, investment in technology does not meet the ideas that a company has.
- Investment in Research & Development: Investment in research and development is below the rapidly growing players in the industry. Even though Afcons Infrastructure is consuming above the industry average on research and development, it has not been able to compete with the leading players in the industry regarding innovation.
- Labour Safety: The company’s labour works in an unsafe environment i.e. construction sites, real estate projects, road construction where the risk to their life is more. This is the place where the responsibility of Afcons Infrastructure increases in terms of ensuring its labour safety and sometimes it fails when some unseen events happen with its labour.
Opportunities for Afcons Infrastructure
Opportunity is a type of competitive advantage that can be gained from various external factors. For instance, if a country lowers its tariffs, a car manufacturer can benefit by exporting its products to a new market. Opportunities for Afcons Infrastructure are as follows –
- New Technology: Afcons Infrastructure may now use differential pricing in the new market thanks to the new technology. It will motivate the company to reinforce its existing clients via excellent service while also attracting new clients through various value-oriented offers.
- New Markets: The adoption of new technology criteria and government free trade agreements has provided Afcons Infrastructure with an opportunity to enter a newly developing market.
- Stable Free Cash Flow: Stable free cash flow gives opportunities to empower contiguous product segments. With extra cash in the bank, the company can empower new technologies as well as new product segments.
- Upcoming Projects: the Maldives signs the largest-ever infrastructure project with Afcons Infrastructure which consists of a 6.74 km-long bridge and causeway link between Male and the islands of Villingli, Gulhifalhu and Thilafushi. This project will open revenue streams for Afcons Infrastructure.
- Mergers & Acquisitions: The company sustains a strong financial position and it should leverage this benefit to increase its mergers and acquisitions both domestically and internationally. This approach will open new revenue streams for the company.
- Affordable Housing Projects: Focused on affordable and mid-income housing projects which is a growing segment. It is a very crucial point if we consider the net income and operating income of every running project which will make them stand out in real estate.
Threats to Afcons Infrastructure
Many factors can affect your business outside its immediate environment. Some of these include factors such as a shortage of skilled workers or a supply chain issue. The threats Afcons Infrastructure is facing are as follows –
- Impact of COVID: Real estate companies were hit hard during the pandemic and this has been reflected in the company’s financial results. The company incurred a loss of 3.7% in the first nine months of FY21 as compared to FY20. It remains to be seen how quickly the company can bounce back.
- Economical Drift: Due to online networking the companies which are multinational organisational are preferably promoted in the market and hence the local market was downstream due to the impact of covid-19 pandemic
- Discontinuity in the Progress: If we consider the overall stock market and its progression concerning the revenues of this company after the pandemic there is a kind of drift in the same and after that, we can see that the progress is discontinued and also they can’t reach their threshold which was maintained before the pandemic situation so they have to cope up with this particular situation.
- Unstable & Changing Market Demands: Due to changes in the evolutionary real estate the conventional techniques are not applicable and hence the change in the market may lead to decreased interest rates also market is changing in a dynamic manner which leads to unstable and unpredictable performance spectra.
- Competitors Advance Technologies: New technologies developed by competitors or market disruptors could be a serious threat to the industry in the medium to long term future. This is because due to the new technologies developed by the competitors they would be able to do more production, and because of more production, they would be able to supply more as per the demand. New technologies also help in reducing the cost of production.
- The Pressure of Environment Bodies: The company follows heavy construction and equipment rolling on lands which led to increasing pressure from environmental activists and several lawsuits against Afcons Infrastructure for exploiting the environment.
This ends our elaborative SWOT analysis of Afcons Infrastructure. Let us conclude our learning below.
Based on the results of this SWOT Analysis of Afcons Infrastructure, the company can enhance its performance through differentiation. The company must broaden its enterprise in research and development to build extraordinary products. Currently, the massive equipment, engines, and construction services of Afcons Infrastructure are very identical to the clams available from competitors. To increase competitiveness, the firm must empower extra in developing novel products.
Afcons Infrastructure can also expand its financial performance by accumulating its distribution network. The firm must concentrate on developing markets because these markets have big economic growth rates. For example, the company could expand the number of Afcons Infrastructure distributors in countries like China. One way to tap into various markets while being cost-effective is through digital marketing.
If you don’t have any idea of what digital marketing is or want to learn more about it and upgrade yourself, here is IIDE’s 3 Month Advanced Online Digital Marketing Course to know more.
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