I have selected Kellogg, Brown and Root (KBR). They are a major engineer, construction and services contract for the United States Army. They were awarded a $250 Million contract with various construction contracts throughout Europe (KBR, 2015). This is a part of our European Infrastructure Consolidation (EIC) initiative to consolidate installations across Europe.
Game Theory (Johnson, 2014):
Understand what motivates the competitors:
In the construction world, winning or being awarded a contract based on a bid is what motivates the industry competitors. A construction bid is the process of submitting a proposal that consists of a cost estimate, blueprints and material take offs.
Rules of the Game:
When the contract submission …show more content…
Why? KBR has an advantage over other competitors within the industry. KBR understands that rules of the game to win government contracts and defends their strategy with low balling the industry. KBR understands that in order to bid on most construction projects within the DoD, you must have substantial resources (Equipment and Personnel). KBR has institutional knowledge on outsourcing foreign workers (third world employees) to complete labor intensive work. The combination of having an extensive amount of equipment and cheap labor allows KBR to submit bottom dollar bids to the …show more content…
Their strategy of undertaking DoD and other governmental contracts gives them a competitive advantage over other construction companies that bid outside of the government (Porter, 2010).
KBR moving forward: In order to stay an industry leader within construction and services of the DoD, KBR must be aware and diligent of new entrants in the industry. Reviewing PESTL analysis, KBR must ensure the following:
Political: KBR operates in many locations around the world. Understating the countries labor, tax and political stability is crucial to the existence of the company in its respected countries. KBR must also stay in good standing with the US Government to keep being awarded contracts.
Economical: KBR must insure that they understand the operating countries economical status prior to bidding to ensure that their costs are being covered.
Social Factors: KBR employs and operates in multiple countries and must be conscious of the multiple cultures that are involved both internally and