Background: The Facilities Management Department (OMPFM) of Old Mutual Properties was created in 1998 when Old Mutual Properties (Pty) Ltd (OMP) was established. In May 2003, the Facilities Management division was restructured to become an active participant in the Facilities Management market.
BACKGROUND AND CONTEXT OF THE STUDY
Prior to the creation of the Facilities Management Division, OMP had a Technical Services Department that was part of the Property Management division. ZMLD has never had to undertake much marketing, as word of mouth generally generated most of the work.
LITERATURE REVIEW
It is widely recognized among industry players that OMPFM is the industry leader, but OMPFM needs to ensure that the market knows and understands this. As the FM division is a relatively new business within OMP and the industry, it needs to find ways to differentiate itself in the market and create its own identity from other new businesses created by OMP.
PROBLEM STATEMENT
After covering the secondary data sources, the next option would be to look at primary sources. In the course of this research, we will review documents that relate to the topic of Facilities Management.
VALUE OF THE PROJECT
Instead of outsourcing all facility management functions and just managing the process while providing facility management advice to other clients, the decision was made to restructure the operation. This new-found knowledge could help OMPFM distinguish itself in the market and possibly offer services that were not previously offered by other facility service providers.
RESEARCH DESIGN AND METHODOLOGY
This is an ideal opportunity to harness the knowledge of the new staff members and in some cases OMPFM can adjust its strategy and even the way we work. The main focus of the case study is to seek insight into the OMPFM department rather than testing the way it currently operates.
LIMITATIONS OF THE PROJECT
The experience and skills of the researcher will have a major impact on the data analysis. The time and timeframe in which this project was completed could be a major limitation to the project's results.
STRUCTURE OF THE STUDY
As a result, most of the limitations related to the researcher's knowledge and experience should be removed. As this industry and market is dynamic and a constantly changing market, the results of this project may only be relevant for a limited period after which AMP will need to adjust its strategy.
SUMMARY
In chapter four, the case study from chapter three will be evaluated against the theory and strategy formulation process presented in chapter two. In this chapter, an attempt will be made to discuss the theory that will enable us to analyze the case study with a view to identifying ways in which OMPFM could differentiate itself in the market.
ORGANISATION'S MISSION, VISION AND OBJECTIVES
Financial objectives relate to the financial results and outcomes that the company's management wants to achieve. Flexible - A company's goals must be adaptable to allow for changes within the company's competitive environment;.
CORE COMPETENCIES
Political Environment
Therefore, the political sector represents actual and potential constraints on the way the organization operates. A company's strategy must take into account the opportunities and problems arising from such policies (Lynch, 2000).
Economic Environment
National culture and values govern the style and content of how business is conducted internationally. This could be in the form of the Employment Equity Act, recent changes to environmental laws in South Africa, changes to the Labor Relations Act, etc.
THE COMPETITIVE ENVIRONMENT - PORTER'S FIVE FORCES
Technology analysis will need to examine both the life cycles of the organization's major products and, at a more fundamental level, the technology resources available to the company. Porter, from Harvard University Business School, undertook much of the analysis that led to the introduction of Porter's Five Forces Model (Lynch, 2000).
Industry I Customers I
- KEY FACTORS FOR SUCCESS (KFS)
- VALUE CHAIN ANALYSIS (VCA)
- PORTFOLIO MATRICES
- COMPETITIVE STRATAGIES
- Differentiation Strategies
- STRAGEGY FORMULATION PROCESS
- SUMMARY
- INTRODUCTION
The value chain connects the value of an organization's activities to its key functional components. Sustainable differentiation is normally linked to the organization's core competencies, unique competitive capabilities and superior management of its value chain activities.
FACILITIES MANAGEMENT
FACILITIES MANAGEMENT INDUSTRY IN SOUTH AFRICA
This is not necessarily at the same level as what is offered on the market. One of the current problems in the facility management industry is that some service providers oversell their services to win contracts and then underperform.
ECONOMIC EMPOWERMENT
This was the case in the past when engineering consultants offered maintenance management solutions on the equipment they had installed. In the short term this results in business growth as contracts are awarded to these service providers, but in the long term it can result in organizations restructuring their internal services rather than outsourcing their non-core activities.
MARKET SIZE AND GROWTH PROSPECTS
PPPs are based on the concept of the public service awarding contracts of between 15 and 25 years to the private sector for the development of facilities and then the operation of those facilities. The savings must be achieved without a decrease in the level of service provided or without adversely affecting the life of the equipment.
LEADING FACTORS IN CHOOSING A FACILITIES MANAGEMENT PARTNER
The FM service provider's financial backing is therefore important if they are to be seen as creditworthy by the suppliers. The call centers can be used per client, or the client can connect to the facility management service provider's national call centers.
SUPPLIERS TO THE FACILITIES MANAGEMENT INDUSTRY
These call centers are used to track the calls received, to monitor contractor response times, to provide feedback to complaints, etc. The call centers are also used to manage the computerized maintenance management systems from which purchase orders and work orders are issued.
BARRIERS TO ENTRY
Both companies are providers of cleaning, security, hygiene, landscaping and industrial cleaning services. What companies have been doing recently is offering individual services as well as a basket of services to the industry.
COMPETITIVE RIVALRY
The facility management service falls within the Development Services and Project Management division, and was established about five years ago. The facilities management team is supported by Africon's internal information technology support system and is also supported by the company's engineering departments (Internet 2).
SUMMARY
The assessment of the Facility Management department within Old Mutual Properties is carried out through several analysis phases. This is followed by an analysis of the direct forces on the facilities management sector using Porter's Five Forces model, after which the key success factors for the sector are identified.
SWOT ANALYSIS OF OMPFM
- Weaknesses
- Threats
- Opportunities
Since most facility management contracts are between three and ten years, this is an important factor. The team profile needs to change to include people from other race groups.
CORE COMPETENCIES
As many of the larger organizations change their strategies to focus on core operations, opportunities arise for facilities management service providers. Major threats appear to come from established competitors and the possibility of losing experienced personnel.
PEST ANALYSIS
- Political Environment
OMPFM has strong business relationships with various service providers in the market, which enables the company to deliver a high level of service. South Africa has the highest number of HIV/AIDS infected people in the world, but the government does not seem to want to recognize this and treat the people in an attempt to reduce the impact it will have on the economy of this country. .
PORTERS FIVE FORCES ANALYSIS
- Threat of New Entrants - Medium to High
- Competitive Rivalry within the Industry - High
This allows the service provider to increase its profitability over the life of the contract. However, as customers' knowledge of the .market increases, the price demanded by FM service providers will also decrease.
KEY FACTORS FOR SUCCESS (KFS)
- Support Activities OMPFM
- Primary Activities
OMPFM must ensure that the manager responsible for negotiating certain contracts is also involved in the implementation phase of the contract. OMPFM must ensure that it utilizes the services of the other divisions to create a competitive advantage.
COMPETITOR ANALYSIS
In order for services to be properly managed, OMPFM must ensure that they have the necessary resources available. The staff must be trained in both the technical and commercial aspects of the business.
PORTFOLIO MATRIX
OMPFM needs to aggressively attack the market to grow and overtake some competitors. Rapid growth Defend position Defend position Rapid growth Achieve cost leadership Achieve cost leadership Focus.
COMPETITIVE STRATEGIES
- Low-Cost Leadership Strategies
- Differentiation
The company must also find ways to differentiate itself in the market so that it does not always have to compete on cost. OMPFM must continue to develop this area that has given them a competitive edge in the market, but they must actively market this area so that it can become a major differentiator in the market. );>.
SUMMARY
Old Mutual Brand - This is a well established brand in the market and it provided comfort to the customers. However, the other competitors must be closely monitored, as they are all in the process of developing their activities.
INTRODUCTION
RECOMMENDATIONS
The PFML should be appointed on the basis of performance-based contracts to ensure that their performance does not fall below the services that are available in the market. If the MFDP wants to continue to provide a superior quality service in the market, they must ensure that they maintain and develop staff.
CONCLUSION
OMPFM's main competitors in the current environment appear to be Drake&Scull and WSP Facilities Management. The facilities management industry was found to be in the early stages of growth and an attractive market for OMPFM.
