Business environment facing lafarge cement of UK

Business environment facing lafarge cement of UK


Lafarge has been a major player in the UK construction sector since entering the British market in 1987 acquiring Redland in 1997 and Blue Circle in 2001 Today Lafarge is the marketleader in cement and holds topranking positions in aggregates concrete and plasterboard Lafarge has three sister companies in Britain Lafarge Cement UK Lafarge Aggregates Concrete UK and Lafarge Plasterboard UK Lafarge is passionate about customer care and proud of its active approach to sustainability and safety Lafargecouk 2009

This piece of work will explore the business environment facing Lafarge and establish a few strategic priorities going into the future

A Summary Statement of Findings

This summary statement of findings analyses the UK construction industry which is a major sector in the UK economy The industry has a high political and social profile due to it key role in providing housing its impact on the environment and its part as a major employer It accounts for approximately 10 of the UK GDP and provides for over half its fixed capital investment

The industry experienced rapid growth in the 1980s but a recession in the early 1990s had severe repercussions resulting in its output plummeting as show is Appendix However the volume of work already in progress cushioned the impact The output of the UK construction industry increased from 55 million in the mid 1980s to an excess of 110 million by 2007 a remarkable increase in real terms when considering the relative low levels of inflation However this increase all changed in 2008 as problems in the US subprime mortgage market triggered a catastrophic crash in the US banking sector which in turn created problems in UK financial markets This triggered a huge recession in the UK which sent the output of the UK Construction industry to fall 11 in 2008 The downside of the economic recession hit construction industry the hardest This is as this industry runs on credit more than others and a credit squeeze affected it badly Moreover from the other side customers were trying to spend as little as possible squeezing the margins that construction companies were working on

Lafarges performance within the UK business environment during 2008 saw a decline as discussed in Appendix This decline was caused by the recession that hit the UK market in early 2008 the construction sector shrank at its fastest pace since records began This reduced government and public spending which had a major impact on Lafarge as less government spending meant less money went on the new infrastructure schemes which reduced Lafarge Contracting sales which in turn reduced material sales This had a big effect on Lafarge UK figures as they seen an immense slump in 2008 figures compared to what they were in 2007

A Review and Analysis into the Business Environment of the UK Construction Industry

Business environment at Lafarge UK

The best method to discover the happenings of a business environment around a company is to undertake a PESTEL analysis By undertaking a PESTEL analysis it will help one to understand the environment within which Lafarge works better

Looking at the construction industry in general some of the political issues surrounding them are

Political factors

The UK government is clearly pushing for more affordable housing within the country and this includes both public sector and private sector housing So it can be said that good or decent housing needs to the people of the country is quite an important political issue

The Government is involved with housing projects through private finance initiatives and public private partnerships as these tend to be key aspects of housing projects involving financing building and operating for these projects This level of government involvement does mean that it has political implications like selecting projects or choosing partners as well as financial implications

The UK construction industry is very large i

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