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Construction and renovation companies and their business strategies: The Renova Group

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case study
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16 pages
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  1. Introduction
  2. WTO
    1. The attractiveness of the WTO remains strong
    2. The dispute settlement body works
  3. The malfunctioning of the WTO announced the end model?
    1. The Doha round of negotiations
    2. Institutional weaknesses
  4. The WTO does not have the means to ensure effective regulation of trade
  5. Conclusion

The construction and renovation industry is an important industry segment in Quebec. The industry generated an annual turnover of 32 billion dollars or 11% of GDP in 2006. Some industry figures for 2006 are: the industry had a payroll of 3.8 billion dollars, 124 million hours that were worked in and 133,000 active employees in the sector. Of the various names present in the construction and renovation sector, the name of the Renova Group stands out.

The Renova Group has been one of the greatest contributors to the country's economy. Renovation as an industrial segement, is very sensitive to market fluctuations. The short-term prospects for this segment seems a bit bleak now, because of the recession in the international economic market. The long term effects of this recession in the construction and renovation segment can be predicted.

Naturally, this drop down will influence the behavior of consumers in Quebec as well. Purchases of houses will stagnate and renovations will decrease accordingly. With a drop in demand in the construction, competition will become fiercer, as companies will seek to monopolize the renovation market.

However, market prospects look positive in the long term. With Quebec having an increased aging population, the Renova Group will be able to expand its target market. This will happen as baby boomers retire and will want a product that is of the upmarket. Despite the ray of hope, the current situation, where there is declining economic growth, is not favorable for companies that are into renovation.

So, with these things in mind, the question here is: How can the Renova Group stay in business under the current circumstances? There is a way out of this situation. The Renova Group will have to try strategies that are different from its competitors. It can try and seek a target market which has households that have been less affected by economic fluctuations and have higher wages than average. Second, by providing maintenance and furniture repair, which are necessities rather than luxuries, the company might be able to bypass fluctuation factors to a certain extent.

The building regulations established by the Regie du Batiment du Quebec is that companies working in Quebec are directly controlled by the government. Construction companies are working with the building code from 1995. Some changes are planned for the new code of 2005 which will come in to effect in 2008. New laws and standards have a direct impact on the company.

They may make some projects more expensive or even untenable for the company without having to hire specialized labor or auxiliary equipment. A major reform will take place regarding the issuance of licenses June 25, 2008. The RBQ will increase its requirements for standards of specialized contractors. For new companies or those who want to add one or more specialties, it involves additional costs and time to devote to training in question.

The regulation of wages for each of the tradesmen, for each apprentice status first, second and third years or partner with differences in the residential, commercial or industrial is another example of an extremely controlled and regulated. The system of compensation is very complex.

Tags: Renova Group; Construction and renovation company; Quebec laws and regulations; business strategies

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