Strategies for related diversification.

Abstract

" ... every related diversification is also fundamentally an unrelated one" (Mintzberg, 1991). Due to the cyclical nature of the demand for construction, quantity surveyors are forced to contend with large fluctuations in the demand for their services. This has prompted firms to consider diversifying into more lucrative ventures. This study explores the concept of diversification as a means to offset cyclical fluctuations, and to stimulate growth. The available literature emphasises the advantages of related diversification over unrelated diversification. It is argued that this creates synergy between the new business and the core one, thus leading tp competitive advantage. The study is based on BTKM, a medium sized Quantity Surveying practise. Growth opportunities in their core business have begun to decline, and the cyclical nature of demand for construction has led to uncertainty, which makes long term strategic planning difficult. A study of the company's skills and resource strengths shows that it is well positioned to capitalise on opportunities in related businesses. By virtue of their core competencies, Quantity Surveyors possess the ability to solve complex problems and challenges regarding the planning and management of facilities. Organisations have come to realise the importance of ensuring that their buildings, systems and services support core operations and contribute to achieving strategic objectives. This has led to the growth of a new field of endeavour - that of Facilities Management. This is a rapidly growing professional field that provides excellent prospects for suitably qualified personnel. This study explores the option of diversification into this field.