Currie Road Construction Case Analysis Essay

2423 Words Nov 29th, 2014 10 Pages
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
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construction industry, particularly the Texas market. Cook would have to decide soon due to the anticipated economic stimulus spending in both B.C. and Texas in the coming year. This is mostly an analytical case presented with plenty of information regarding the background history and the current market condition.
There are some immediate issues that Currie has to address. The first issue is the extreme difficulty to gain market share in B.C. due to fierce competition; as many as ten companies bid on one job in B.C.. According to Case Exhibit 1 “2008 Market Share Ranking (MTI)”, Currie only owns 2.7% of the market in 2008. The second issue is to stay profitable. Cook took over Currie late 2000. Even though Currie has been profitable since 2003 according to Case Exhibit 2 “Financial Summary (Yearly)”, it was unable to make any interest payments towards the company’s $20 million loan until 2007. These two immediate issues are highly important and highly urgent.
Currie also has a few basic issues. First is the $20 million debt; the interest owing is a major burden to the company. It would take Currie many years to repay the entire loan. Second is how to better utilize the company’s resources such as machinery which sits idle during the winter, and the existing centralized control systems which cost a total of $170,000. While these two issues are highly important they are not as urgent as the immediate issues…