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Keystone Excavating Limited Preserving A Legacy Case Solution

Solution Id Length Case Author Case Publisher
1761 1166 Words (7 Pages) Pernille Goodbrand, Sandip Lalli, Cheryl Brazell Ivey Publishing : W18643
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The barriers to entry in the civil earthworks industry which Keystone was a part of were low hence the threat of new entrants was high, as medium-sized companies were very few in the industry. Most companies were either small with one to five employees or large with over eighty employees, with the equipment pieces varying from five to above a hundred. Also, most of these companies were either family-owned businesses or privately held. The tendering process was open and accessible to all companies as well, and it was easy to win contracts if prices were low. Contracts were awarded primarily based on the price mechanism, so any entrant offering the lowest prices could easily secure the contracts.

Following questions are answered in this case study solution

  1. SWOT Analysis

  2. PESTEL Analysis

  3. Porter’s 5 forces

Case Analysis for Keystone Excavating Limited Preserving A Legacy

1. SWOT Analysis

i. Strengths 

Keystone was a 35-year-olds company with an established reputation and experience in the residential, commercial, infrastructure, industrial construction. The resources of Keystone were large with an equipment fleet of over 100 pieces, 2 offices and 89 employees. Keystone’s equipment and employee number exceeded that of its direct competitors by 10%. Keystone’s fleet was a major strength and aided the company in taking big projects. The retention ratio and safety record of Keystone was high. Keystone made constant effort to improve project management and employed technology to work smarter.

ii. Weaknesses

Keystone did not focus on marketing and branding. Keystone did not pay attention to fostering the trade relationships, nor did it pursue business development. It did not focus on finding new markets or future mentoring managers. There was no clear uninformed vision of the organization, and the company remained risk averse.

iii. Opportunities 

Keystone was located in Alberta, which provided a large market for Keystone. The household incomes in Alberta were relatively high, providing demand for Keystone's services. The increasing significance attributed to environmental concerns was an opportunity for Keystone as it worked on sustainable goals.

iv. Threats

The threats to Keystone were the declining oil prices, which lowered investments, directly affecting Keystone as infrastructure projects were canceled. The GDP declined, and the complex and multi-layered tendering process further threatened the ability of Keystone to innovate.

2. PESTEL Analysis

i. Political

Government investments in infrastructure projects in Alberta declined due to the recession, directly affecting Keystone. Furthermore, the alteration in federal and provincial governments in 2015 not only delayed infrastructure spending but also created uncertainty as some of the policies of the new Democratic Party were unfavorable for businesses. A carbon tax, increase in the corporate tax rate to 12 percent and augmentation in the minimum wage were policies that deterred investment (Maclean, 2015).

ii. Economic

Unemployment rose to 7.9 percent in 2016 from 4.4 percent. The decline in oil prices reduced investments. Resource revenue shares declined to 6 percent in 2016. The real GDP dropped to 302 billion dollars in 2016. This resulted in a contraction of investment in the oil and gas sector and reduced business for Keystone considerably (Fletcher, 2018).

iii. Social

The population growth of Alberta reduced due to the ill effects of the 2014-2016 recession. It fell to 1.7 percent in 2014 and 1.4 percent in 2015. The bleak economy reduced public confidence and unemployment, and reduction in incomes led to reduced demand for Keystone’s services (Symbol of Statistics Canada, 2017).

iv. Technological

The technological development was mature in Alberta, with the province leading the way in Artificial Intelligence, healthcare, and big data (SingularityU Canada, 2018). Keystone employed technology in its operations by using software for mobile workforce management to collect real time information about equipment, vehicles, etc. and also flagged them.

v. Environmental 

Environmental sustainability gained considerable importance, and it became essential for Keystone to operate sustainably and facilitate relationships, but the additional expenses in doing so had to be borne by the company itself as customers would not pay for value added services (Brown, 2016).

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