Business Strategies of World’s Successful Companies: Bilfinger & Berger AG’s Winning Business Strategies
A deep revelation of the business strategies that transformed Bilfinger & Berger AG, once two separate companies – Grün and Bilfinger and Julius Berger-Bauboag – that began as small start-up businesses, from a heavy construction services business to a global multi-service group.
Business Strategy 1: Begin by Focusing On a Small Business Segment and Build a Solid Reputation
A lot of start-up businesses don’t make it not because the business idea is not sound, but because the owners start-up with too many business offerings. The implication of this is that apart from them not having the expertise and experience to manage the different components effectively and efficiently, of immense importance is that they confuse the consumers regarding what they stand for.
The better entry strategy is to start-up the business on a small scale by focusing on a single business segment. This does not only enable you to develop strong expertise, it also helps you to establish great reputation in your industry.
Founded in 1890 and incorporated in 1892, Julius Berger, one of the components that later made up Bilfinger & Berger AG, was focused solely on railway, road, and bridge construction for the first ten years in business. As a result of this strategy it was able to build a huge reputation, which enabled it to win government contracts to build hundreds of miles of railways and roads, with 22 stretches of railroad across Germany in 1893 alone.
Business Strategy 2: Expand Your Business to Where the Market is Hungry
An irrefutable business success strategy you should not do without is that after your business has taken root, you should look for new markets beyond your business location where demand for your product or service is high. In fact, this should be a continual process in your business life.
The benefit in expanding your business to other geographical territories is tremendous as your revenue and profitability is not tied solely to the local economy.
Indeed, one of Bilfinger & Berger AG’s strongest business success strategies is its expansion to less developed countries. Even by 1913 both separate companies that later formed Bilfinger & Berger AG were in German East Africa, Cameroon, Southwest Africa, Costa Rica and Colombia.
Since the 1970s, its subsidiary Julius Berger Plc has been in Nigeria and has won massive contracts to develop Nigeria’s transportation infrastructure. It was also responsible for designing and constructing Abuja, the new capital city of Nigeria. In Tripoli, Bilfinger & Berger has done roadwork measuring over 330 miles.
As proof of how important expansionist strategy is to Bilfinger & Berger’s business, and indeed to any business, the company’s projects abroad were between 60 and 70 percent of its total job volume in the 1980s.
Business Strategy 3: Continually Find Ways to Keep Down Your Cost of Production
Whether your business is small or large, you must continually give your customers or clients, as the case may be, the best deal they can ever get. And this means you discovering ways of reducing production cost without affecting quality of course, so that your customers can pay lower price for the good quality product that you offer them. Because consumers generally love this kind of situation, they will continue to keep you in business.
In 1914 Julius Berger launched its own mining operation. This move became a standard practice for the company’s international projects. By sourcing its own soils and ores instead of buying from suppliers, this strategy helped its business to save millions of marks on materials and keep its fees at a readily affordable level for its clients.
Business Strategy 4: Innovation Can Shoot You to the Top of Your Business Segment
Without doubt, the easiest way to attain leadership in your business segment is to be innovative. Innovation enables you to efficiently and more effectively apply your resources. It allows you to uniquely create greater value for your customers. And also, very importantly, being innovative sees you establishing a standard in your industry, which every other business will follow from behind.
Both Grün and Bilfinger and Julius Berger had always been innovators in bridge construction technology and this had brought them to being leaders in water-related engineering projects, building dams, bridges, port installations, etc around the world throughout the late 1950s.
For instance, a new method in bridge building that used prestressed concrete was invented and employed for the first time by Grün and Bilfinger in 1950 to build a railway bridge in Heilbronn. This method of pouring concrete around metal-cable frames soon became widely employed because of its effectiveness in the use of concrete.
Business Strategy 5: Joint Ventures Can Be Rewarding
Partnering with other businesses on certain projects can be more profitable than trying to do it all alone. Here, you will be able to combine your ideas and resources with those of the other business to achieve the desired goal easier, quicker and more profitably.
Both Julius Berger and Grün and Bilfinger had enjoyed great benefits in doing business together before they decided to merge their businesses together in 1975. One of their biggest jobs together in a joint venture was the building of 5.5 mile prestressed concrete Lake Maracaibo Bridge in Venezuela in the late 1950s.
Also, another very successful joint venture between the two businesses was in 1968 when they built a long autobahn tunnel in Hamburg. In fact, it was because of the huge success of this venture that the then two separate businesses decided to merge.
Business Strategy 6: Explore New Business Opportunities
Due to a number of reasons, your high selling product or service today may not so well sell in the future. Therefore, to avoid suddenly operating on low revenue base, the smart strategy to continue executing is to look for and explore new business opportunities.
Even though the international building industry experienced a terrible reduction in business in 1973, yet Bilfinger & Berger progressed because they had sought new business opportunities earlier in the decade.
They had diversified and started building nuclear power stations and offshore oil-drilling rigs which became high in demand and profitable.
Also, in the 1990s the company again sought new business opportunities and diversified into infrastructure projects with focus on build-operate-transfer (BOT) and private finance initiative (PFI) projects.
These were private company financed public infrastructure projects. The financier company will then collect tolls or charges to recoup their investment – these new business opportunities proved to be extremely rewarding for Bilfinger Berger.
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