Name: Khushboo Rabia

Reg- No.- 221-09-41-13241-2222

Assignment- Business Development

Case Study
An Approach to Strategic Planning at Imperial Construction Company
Abstract
This case portrays the tale of the protagonist Mr. Ashutosh Kalamkar, who started a small
construction company, Imperial Construction Pvt Ltd and made it big by transforming it into
a leading multi-segment multi-divisional international construction company. In the first
portion, the case explains the strategic growth of the company where Mr. Ashutosh planed
and implemented various strategies and took the company to greater heights. Later, Mr.
Varun, son of Mr. Ashutosh took over the charge of the company after retirement. The
second portion of the case discusses various problems faced by the company under the new
leadership of Mr. Varun. Surrounded by a lot of problems, Mr. Varun sought the help of
renowned advisor Mr. Rao, who after analyzing the problems suggested several solutions.
The case attempts to emphasize the importance of an organized and planned approach to the
strategic management process for companies. This process of strategic management involves
designing the vision and mission statements, setting clear objectives, assessing the business
environment, formulating and implementing strategies followed by exercising strategic
control.
Learning Outcomes

An Approach to Strategic Planning at Imperial Construction Company

Devang Desai, Senior Associate Professor; Anand Prakash, Senior Associate Professor, National Institute of
Construction Management and Research (NICMAR), Pune, prepared this case solely to provide material for classroom
discussion. The author does not intend to illustrate either effective or ineffective handling of a managerial situation. The
author may have disguised certain names and other identifying information to protect confidentiality. NICMAR prohibits
any form of reproduction, storage or transmittal without its written permission. This material is not covered under
authorization from any reproduction rights organization. To order copies or request permission to reproduce materials,
contact The Editor, NICMAR Journal of Construction Management, National Institute of Construction Management and
Research, 25/1, Balewadi, N.I.A. Post Office, Pune 411045. Phone (020)66859100, E-mail : publications@nicmar.ac.in
The author can be reached at ddesai@nicmar.ac.in, devang3us@gmail.com; aprakash@nicmar.ac.in,
anandprakash.indira@gmail.com.
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By the end of this case study, students will be able to:
 Discuss the importance of defining the vision and the mission statement for the
company.
 Discuss the importance of defining a clear set of goals and objectives for the company
at the corporate, business and divisional levels.
 Identify the variables in the business environment that impact the outcomes of a
company's performance.
 Create awareness among readers to the real-time difficulties of implementing a
strategic plan.
 Evaluate execution of the strategic plan from time-to-time to exercise control.
Introduction
Mr. Ashutosh Kalamkar founded Imperial Construction Pvt Ltd, a family owned real estate
business in Pune in 1989, focusing primarily on building small houses for individual clients.
By qualification, Mr. Ashutosh was a Civil Engineer and had an experience of about 15 years
in construction planning and execution. Initially the company had only 20 employees and
started focusing on the outskirts of Pune to seek business opportunities.
Mr. Ashutosh believed that people living in outskirts or semi-urban area would be less
demanding in terms of their expectations regarding the configuration, design, technology and
quality of construction for their homes. He was right in part in his reasoning because clients
in the outskirts were looking for low-cost housing on account of their lower incomes than
those living in the city area. Additionally, it was easy for Mr. Ashutosh to build such a low
cost and technically less complex house as he was not an experienced contractor. Hence, he
continued to focus on this segment. In addition to servicing individual clients, Imperial now
began to construct low-cost, reasonably priced apartments on the outskirts.
Company Background
After a decade of operations and the successful completion of a number of projects, Imperial
has become a well-known and large company. But it was known only for its work in the
outskirts. Now with better cash reserves and longer experience, Mr. Ashutosh thought of
entering a larger market in Pune urban region by venturing into the market of large apartment
projects. He also planned to construct luxurious bungalows and high-end homes for affluent
clients in the Pune city area.
Imperial started with the launch of three major township projects in the Pune city area. After
completing around 15 housing projects of different configurations over the next decade,

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Imperial Construction became the top real estate company in Pune. Mr. Ashutosh never
looked back. He entered into the construction of malls, multiplexes and hotels in Pune.
Succession to the Next Generation
After its success in these segments in Pune, Imperial was ready to expand its business to
various cities in the state of Maharashtra other than Pune. By the time, Mr. Ashutosh's son,
Mr. Varun joined his family business. Originally, a commerce graduate and MBA from
Kellogg Business School, USA, Varun brought dynamism and organized management
approach to the company.
He adopted the departmentation process in the company and established distinct management
departments like Marketing, Finance, Human Resource Management etc. Now, Mr. Ashutosh
retired and handed over the leadership of the company to Mr. Varun. Mr. Varun took the
company to new heights. Very soon the family business turned into a national level multi-
business company and ventured into different sectors.
The company has also forayed into the infrastructure and industrial construction segments. It
also started bidding for international infrastructure projects and got its first break through in
the form of a road construction project in Saudi Arabia. At one point, the company's business
in different segments had grown in size.
Corporate Restructuring
These businesses were very different from one another and hence became difficult to manage
under a common top management body. As a result, the company had to detach these
businesses from the parent company, Imperial Construction. The newly formed companies
operating in different segments were Imperial Infrastructure Ltd, Imperial Realty Ltd,
Imperial Industrial Construction Ltd.
Each of these companies became an independent company led by an independent Chief
Executive Officer (CEO). These CEOs were given full and absolute autonomy to run their
companies and were not required to report to the parent management body for daily affairs.
However, they will consult the parent management body to obtain long-term corporate
directions or guidelines for entering new markets.
Diversification Moves
Over time, Imperial Construction entered the business of steel and cement to achieve better
cost economy in its operations. After successfully running in the national and global markets,
the top management of Imperial Construction took a very different path to enter the electronic
business by manufacturing products like TVs, Mobile Handsets, etc. They also planned to
enter the hotel business in the future.
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The Problem
After decades of successful operations in various segments of the construction sector,
Imperial has become a well-known name. But the universal law of business fluctuations, just
about any successful business, proved to be true in the case of Imperial as well. After
Imperial has done so well for so many years, now there are signs of problems in various
businesses.
The first sign they witnessed in the Industrial Construction segment, which had not got a
single order in a particular year. Infrastructure segment was performing well and registered
decent growth but business was growing at a decreasing rate for them. The real estate
segment of its Realty business invited a lot of competition in the form of various corporate
conglomerates diversifying into the construction segment.
Imperial has borrowed heavily from the bank, which it started to find difficult to serve due to
late payments from clients. Such late payments were attributed to delay in completion of the
project. The delay in completion of the project further attributed to shortage of funds for
executing the projects. Disappointed by all these incidents, Mr. Varun decided to hire a
consultant to find out the causes.
Renowned Management Consultant, Mr. Rao was contacted and Mr. Varun explained the
entire problem to him. Mr. Rao analyzed the situation and submitted a detailed report to Mr.
Varun. The report was prepared after rigorous analysis of all relevant facts and figures.
Although the report submitted by Mr. Rao was very detailed, the following section depicts
the key observations made by him:
1. The Imperial Construction Company lacked long-term planning as no corporate
goals were set:
It is known that Imperial was a very small company when it was founded by Mr.
Ashutosh. Initially, the business was not established and the overall scale of the
business was very small. Therefore initially, it did not require long-term planning.
But, when it became a multi-segment, multi-location company, it apparently
needed a much more planned approach to its operations. Surprisingly, no efforts
were made to plan the business properly. No corporate goals or long-term goals
were set. No provision was made to classify short term goals and long-term goals
separately.
2. There is no target set for various divisions of the company.
In line with the first observation, the same phenomenon continued at the business
and the divisional level. Although, the business was divided into various divisions
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 that later became independent companies, the strategic planning process was not
properly defined. Goal setting was done haphazardly for different entities and
personnel. Neither the process of goal setting was properly defined and structured
nor it was uniform at the business and the divisional level.

3. No vision and mission statement prepared for the company.

Although Imperial is a large company in terms of scale and different segments and
locations, there was no vision and mission set by the top management. There was
no shared goal or common purpose identified by the company. In the absence of a
shared goal or common purpose, each department of the company was found to be
working in isolation. Each department had its own agenda and the path chosen by
them was literally different from each other.

4. No effort was made by the management to achieve functional and operational

integration.
The different functions hardly interacted with one another before planning and
executing an operation. For example, the marketing department of a company
often made ambitious commitments regarding the date of possession of a housing
project in order to create buzz in the market without consulting the project
manager of the housing project.
5. Instead of focusing on core businesses, the company has gone for unwanted
diversification.
After the huge success in the housing segment, the management has taken the
right step by foraying into other market segments of the construction industry such
as construction of hotels, restaurants, malls etc. It has further moved into the
industrial construction and infrastructure segment. Before setting up business in
these very new segments, it entered into the steel and cement business with the
intention of achieving cost control for input. Although the move might seem
strategically correct, the execution was hastily done in hurry and well ahead of
time. Steel and cement manufacturing certainly are not the field of core
competence for Imperial.
6. Resource allocation from headquarter to various divisions was entirely
centralized.
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 One of the most fundamentally wrong phenomena observed was in relation to the
management of profits generated by different group companies. The profit
generated by different group companies is deposited to the bank account of the
same parent company. Annual resource allocation to different group companies is
usually done from this account by the top management. This means that relatively
weak and inefficient group companies are much more likely to be financed by
profits generated by efficient and profitable group companies. The allocation
process was completely controlled by the headquarters instead of being
completely decentralized.
7. Project execution was not divided into different phases so as to complete the
project on time.
Construction business is a project-based business. Construction or infrastructure
projects are long-lasting entities and consist of several phases. A proper Work
Breakdown Structure (WBS) with deadlines for each phase should be prepared for
timely completion of the project. Nothing like this was seen in the case of any of
the Imperial Group companies. In case of some projects, even though some kind
of planning was done, there was no immediate project control and feedback
mechanism in case of deviance from the plan.
8. The decision to enter into any new business was taken without considering the
business environment variables.
Without doing proper business environment variable analysis, it was decided to
enter into many new businesses including steel, cement, TV, mobile handset etc.
Actually, there was a plan to enter the hospitality segment by getting into the hotel
business.
Mr. Rao handed over this report to Mr. Varun for further decisions and actions.
Discussion Questions
1. Do you agree with Mr. Rao on the major reasons given by him for the problems
faced by Imperial? Justify your response.
- Yes, the reasons listed above by the consultant are appropriate. As there was no
long-term planning and vision, instead of adding new business and creating new
benchmarks, it badly affected profitability and the downfall of the various sectors
started happening. E.g., The company did not have a single order in a particular
year, decreasing growth in infrastructure. There were no such business

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 enhancement and operational plans either for the parent company or the other
sectors.

2. Do you find any other problem or reason not listed by Mr. Rao? Discuss.
i) There was no Financial advisory committee to direct the financial decisions
and reconciliation.
ii) No Business Developer was there in the parent company.
iii) No risk assessment was seen in the case.
iv) No strategic alliance was made for the business expansion.
v) There were no centralized teams in the parent company to communicate with
the cross-functional teams as well as the other segment companies.
vi) There was no provision for system audits (neither internal nor external).
Regular audit ensures proper regulation of various departments.

3. If you were in the place of Mr. Varun, what actions will you take followed by
analysis submitted by Mr. Rao?
- I would have gone with the following strategies:
Before entering in various other sectors:
i) Hired Business developers for each segment who can bring new market
opportunities, possibilities for expansion, competitor developments, and the
current sources of the company's revenue. Which would have made it easier to

study the market in depth to understand and analyze the nature of current
and future markets of various other sectors.
ii) Strategic Planning and Due Diligence: Would have collected detailed
information, technicalities, and strategies. Prepared a data-based design
structure for a particular sector. E.g., To enter the cement and steel industry
and electronics manufacturing, the planning and design structure could be
made by the company before entering it.
iii) Strategic Alliance: To enter a new or non-core segment, it would be better to
form a strategic alliance i.e., partnering with the local firms for more stability
and networking in the market.

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 iv) Good Return: Would have made sure that the sector I am entering gives me a
good return, so that I can take it to the next level as Mr. Ashutosh did initially.
v) Until a good return from a particular sector, I would not have entered the
next sector.
After entering the business:
i) Would have established a common goals, objectives, vision and mission and a
centralized team in my parent company so that every project and sector can
be monitored centrally. Thus, it would be easier for the top management of
the parent company to communicate with the cross functional teams and
build-up the market strategies to expand.
ii) Established Central Monitoring Team (CMT), various engineering functional
teams can be structured. Like, Planning, Costing & Budgeting, Contracts,
Billing & Estimation, Reconciliation, Execution etc.
iii) Proper planning department which would have made a proper work
breakdown structure and set goals for every project. This would also have
eased the analysis of failures in time schedule, resource allocation,
procurement, deliverables etc.
iv) Outsourcing: Non- core jobs such as, Billing, estimation, finance, accounting,
customer service etc could be outsourced for cost saving.

4. Do you find application of any concept/concepts that you might have studied
during strategic management while solving the problems faced by Imperial?
- Strategic plans and strategic alliance for the expansion of business.
- Long-term goals and plans
- Evaluation of the planned and analyzed strategies and reports, internal organization
analysis, and strategy execution throughout the company.
.