"Aconex Ltd. provides online collaboration for construction and engineering projects. The company offers Aconex, an online document management, Web collaboration, and project management software that uses the Internet to manage information for projects of various sizes in construction, engineering, and facilities management. It also provides Web services application programming interfaces to enable integration between its system and other software products used by its clients. The company was founded as Australian Construction Exchange Pty Ltd. in 2000 and changed its name to Aconex Ltd. in April 2004. The company is based in Melbourne, Australia with additional offices in Chennai, Hyderabad, Mumbai, and New Delhi, India; Hanoi, Vietnam; Hong Kong and Shanghai, China; Kuala Lumpur, Malaysia; Makati City, the Philippines; Seoul, South Korea; Singapore, Singapore; and Tokyo, Japan, Denver, Libya, Romania, and Brisbane."
Task 1
Review the organisation's marketing environment, both micro and macro and outline the planning principles. This may require you to carryout appropriate analysis, including, Porter's five forces, product portfolio & BCG, PLC and SWOT analyses.
Organization
Aconex Ltd, is a private owned, Australian based software company, a leader in providing a 'Software as a Service', web-based or online management information system for projects in construction and engineering industries. In 2000, when the company launched its product to its target market, the construction industry was still heavily using paper, email, fax, courier and inefficient computer systems to manage huge information flow of complex projects which was time consuming and chaotic in nature as documents are passed on for submission, review, approval and distribution to hundreds of project members. This system however functions to electronically capture data, store, access, track, distribute, retrieve large volumes of project documents such as drawings, specifications, correspondence, tenders, invoices, etc, allowing clients to execute their project easier and faster. The easy to implement system uses only one source which is a central platform or cloud computing system, using only the internet and computer where contractors, subcontractors or suppliers will have access to it anytime and anywhere in the world, no matter how large the file is. Not only is it efficient to clients, it also reduces cost of rather procuring a whole IT department, minimizes risk and saves losses brought about by disputes arising from delays, error or wrong information, and that is because the system is reliable and secure. Since then, more clients and construction companies are realizing these benefits of online project collaboration software and more so, giving them insights on project health and progress as well as allowing them to do more with the information they have.
Aconex helped the construction industry, not by changing the methods but by making a system to make the traditional method better. They penetrated the internal environment of that industry which was once slowly moving and adapting to a digital world of document control.
The vision of Aconex is to be the industry standard for online information management and project collaboration.
Customers
Aconex now is the largest global provider of its product with clients such as IKEA, McDonalds and Las Vegas Sands, Brookfield Multiplex, the Venetian Macau Casino Resort etc. In 2005, it broadened its market in China where the construction industry cried for a high demand of web-based information management system and continues to serve the market today. In the Middle East, it is the most recognized and most used system by major projects such as the Abu Dhabi -Aldar Projects. In February 17, 2010, it was appointed as Avantis Mining's online project management system to be used on one of their projects in Canada. In Central America, it boasts of being able to join the Panama Canal Expansion Project which is one of the greatest engineering projects in history. In the United States, they were awarded to provide services for US$ 6 Billion RTD Denver Fast Tracks and in Italy, a US$7.2 Billion Strait of Messina Bridge project.
Its customers in the construction, government and infrastructure, energy, oil, gas and natural resources industries have realized and are reaping the benefits of an organized and structure online information system. They simply can't do without it. They expect that the system do their task better basing on past experiences with similar systems and work experience. They expect that the system be easily understood, be error-free and fast. Customers' key point in procuring online information management software is choosing a company which can provide excellent product training and support which is included in the package.
Employees
Everyone in the Aconex organization is encouraged to continue to learn, improve and develop themselves. There is a great cultural diversity present in any office and this shows the different styles, backgrounds and experiences but with one uniform mindset of being professional and highly ambitious although still very friendly. The management encourages pro-active staff members who are valuable in building lasting relationships with clients. In Aconex, there are rooms of opportunities, trainings and programmes to move up and where one can take absolute pride and satisfaction in their careers and to become leaders. The organization having won at least 30 business awards in recognition for product excellence and management seems to reflect the kind of roles that each employee plays whether in Sales, Client Services and Professional Services, the Information Technology, Marketing, H. R., Administration, Accounts and Legal .
Suppliers
Because Aconex uses Sugar CRM , it has been able to provide them with flexible customization for its unique online software. It is an open source application which they need for their unique system in collaborating and managing internal and external business processes. Sugar CRM is used by Aconex as a provider of commercial open source CRM (customer relationship management) software, as a customer hub which coordinates project info for Aconex staff to get their jobs done - from coordinating sales, to accounts, contacts, project management and product support and training to end clients. This is one supplier that enables Aconex to deliver their products where first focus would be on the client's projects first and the accounts being only the secondary. Other choices were Salesforce.com and NetSuite which were too rigid to be applied to their software. Because of a helpful CRM system, it is able to build strong relationship with its customers.
Shareholders
Key figures from five members of the Board of Directors are Mr. Leigh Jasper, who is the co-founder and currently the CEO, and Mr. Robert Phillpot, co-founder and Director of Business Development. The company has partnered with Francisco Partners (US technology investment group) who takes minority equity stake in the company. Other investors of Aconex totals to around 100, who are high net worth executives and friends of Aconex top officers. These investors add value to the company, being from business and construction industries. They are treated as real partners in the company who helps achieve the business vision.
Media
The use of the internet technology alongside new gadgets in retrieving and using accurate information has pushed this company to provide solutions for its target market which were attracted to this product. Internet blogs, the use of website, mobile phone applications helps educate end users and create not just a craving but a need to have a quick and reliable solution. These has affected how construction and engineering industries where projects need a new web based collaboration technology to make things faster, easier and cheaper. The internet as a medium in giving global grasp of attention for marketing their product as well as print ads has proven to be obviously advantageous for this company's marketing activities. Press releases and trade shows , company events and seminars were also an important tool to reach their market.
Competitors
An article from www.constructiondigital.com , "The Top 5 Construction Project Management Applications" are Aconex, AEC-SYNC Collaboration Software, EADOC, PROCORE and SKIRE UNIFIER. The article stated that all five are focused on using the "cloud computing" system which means using one central web-based platform to manage data, reducing printing, physical storage and delivery of documents. All companies claim to deliver efficiency in using the project management system software they are marketing. The competition would be on market share, branding, pricing and product features, years of experience, track record of quality service and satisfied clients. Rival companies also focused more on domestic markets while Aconex has continued to spread globally.
Political
Government policies including environmental issues involving the sustainability issues of the construction and engineering industries which are target markets of Aconex. Its impact on recycling of huge amounts materials used in the projects and its effects on how Aconex operates and what it should offer. Government support for the industries which the company works with forms part of the factors that Aconex will be dependent on.
Laws on privacy and protection rights of users, intellectual properties in different countries could affect how Aconex markets its products.
Economic
The presence of recession affecting the market, the interest rates affects demand for construction and engineering projects. There is a ripple effect on the IT sectors which is one department to have easily been downsized. Unemployment continues thus raising need for companies to substitute for a product which can be controlled by fewer staff. In some parts of the world though, the construction industry has begun to recover so there is new opportunities for growth.
The economic meltdown reduced Aconex orders from AUD$62 Million in 2008 down to AUD$49.3 Million (£ 22.78 M) in 2009, where most of these projects were affected by the Dubai downturn. Although in June of 2009, their order books were getting stronger. In fact, revenue generated as of June 2009 by Aconex group was at AUD$ 38.92 (£ 17.98 M). There was 34 percent rise from year 2008 which was AUD$29.033 M (£13.413 M).
Social
Cultural diversity in organizations may be advantageous to Aconex as it expands to outside their headquarters in Australia, needing to employ locals in a specific project location to bridge the gap and establish healthy relationships in any geographic location.
The new society favors more the greener way of working, so Aconex products comes very valuable in terms of carbon savings by replacing for printing, fuel for delivery of documents or for travelling to communicate with other project members.
Majority of participants in any building project are internet savvy and accustomed to be in touch with work not only using personal computers or laptops but also the mobile phones and ipads. The changing lifestyles of its clients and their needs pertaining to better environment at work is telling Aconex how they should form their product in a way that it will be accepted and used especially for clients who are working on site.
Technology
Advance and complex technologies used in the building industry involves transmission of large metadata files, arising in a need for a more reliable and efficient system. There is a fast rate of technological change and obsolescence is a major factor in implementing strategies for Aconex to stay in the market. Innovation and product development are keys in staying in tune with the technology demands of its market.
S W O T Analysis:
STRENGTHS
Aconex as a brand is gaining global recognition and has set a standard for using online project collaboration and project management of projects from industry leaders in construction and engineering. It is moving steadily as a leader in its area of expertise providing customers needs for a user-friendly software for their highly complex projects.
It has a team who are highly skilled in innovation and development of a product for better functionality and production of a more intelligent system which also works well with other existing electronic systems such as system or in-house applications.
It can provide effective multi-lingual 24/7 phone customer support, online tutorials, training sessions for all participants in the project which holds trainings in their centres or deliver on-site trainings. It can offer consultancy services to clients needing advice on the best or appropriate management of information. These are key factors needed by clients in choosing this product.
Its reputation for bringing quality service and solutions has gained them at least 30 major awards for business excellence, one of which is Product of the Year, given by the Construction Computing Awards in 2008.
WEAKNESSES
It may have low market share in some major countries.
Non-believers of the product or those who continue to use an inefficient in-house system of information management with users who would not want to adapt but may be potential target markets
Cloud computing technology for natural resources or property industries may be new so market education is needed as well as conventional marketing strategies which may be time consuming due to the multi-company nature of its market and the geographic locations of projects and the traditions set by different cultures in a company.
OPPORTUNITES
A growing market in government infrastructure projects which are connected to economic stimulus packages due to the present economic climate. It also expands to growing energy, oil and mining industries in new key areas in South America and North Africa.
Large number of industries worldwide which are still using manual documentation and email accounts to transmit project documents shows an opportunity for this company to penetrate.
The target market which are medium to large construction and engineering contractors, project management companies and property owners who have projects over US$ 100 Million would most likely spend on the best and most efficient tool to maximize profits and reduce risks.
Build partnership with newer software technology to grow within the market.
THREATS
Competitors may copy product features, selling at a lower rate to the same market, may substitute need for quality product over price.
New start-ups competitors offer solutions using more advanced tools and techniques, which are not shaken by the need to emulate an existing or older product into a web-based environment just like how Aconex started.
Change of government policies on taxation and accounting policies for this kind of industry which may affect revenue forecasts or budgets.
Cost cutting activities of target market which looks on the price of the total package of acquiring the technology.
Task 2
Examine and analyse the potential (alternative) marketing strategy options that you could identify for the chosen organization to grow and sustain its operations and recommend how organisation can use the marketing mix variables to achieve the marketing objectives.
Situational Analysis
The company is now celebrating its 10th year anniversary. Currently they are recognized as a company setting standards for project collaboration software for the construction and engineering industries. They market their products in Australia, New Zealand, Europe, the Middle East, Asia, Africa and America. Currently, it has 37 offices all over the world. It is now offering its product to projects in about 70 countries, amounting to US$ 220 Billion in over 12,000 projects.
At the beginning, Aconex was set to operate globally. They started by sending someone to do marketing research on different countries then sent salespersons to meet with potential target market, join seminars and trade shows and more support staff would be added once deals are closed. These satellite operations exposed them to a lot of customers who were very valuable to them when they joined even bigger projects. This placed them to the position where they want to be in currently and an opportunity for its market growth.
They now have 10 years experience in delivering their successful sales and marketing techniques to their target market which is dispersed geographically in nature, involves different cultures and disciplines, and involves multiple companies in just even one single project.
They have expanded their operations worldwide and their market has doubled in size every year as more clients get involved with the system especially in countries where the natural resources industry such as energy, oil and gas is booming.
Marketing Strategy
Markets are moving targets, and a company's strategic perspectives must change accordingly. (Jain,1999) Aconex will further penetrate the international market by maintaining a solid business model. It will need to continue to use Market- Geography as a variable in choosing its marketing strategy.
Mission
"The growth of Aconex can largely be attributed to a world-class solution, the highest standard of customer support, and the ability to service any project in the world, regardless of size or location. Aconex is an award-winning, privately owned organization, with a clear vision and a strong leadership team." (http://www.aconex.com/Corporate/About-Us.html)
Marketing Objectives
Double growth in market especially in emerging projects of natural resources industries.
Create a remarkable budget for training of customer and technological support staff
Increase funds for development and innovation of product.
Target Market
Large construction and engineering contractors, project management companies, property owners and developers, government agencies with landmark projects in building and infrastructure worth over US 100 Million.
Positioning
Aconex will be the largest online project collaboration, software as a service provider in the world.
Marketing Mix
Product
Provide an online or web-based platform solution for project collaboration and managing information of medium to large scale construction and engineering projects.
The business of its target market will influence the development of the technology used in this product.
Its added value to the customers - being user friendly and widely accepted, very productive, cuts administrative costs, reduces risks, minimizes losses due to delay and error in information dissemination.
Features:
Manage document and communication easier and faster
Secure and reliable neutral platform
No limit on storage
Remarkable bandwidth for quick access anytime and anywhere
Accessibility of all project documents
Integration with other software or in-house document system of clients' projects
Innovation and upgrades for more functionality and productivity at no extra cost
Training, printed help guides and 24/7 multi-lingual support provided with no additional fees
Promotion
Advertise latest news and projects, product updates and features in official website.
Links to internet construction, business, marketing and I.T. sites and blogs, social media tools to generate new leads and company ranking.
Press releases and interview for conferences, product campaigns, participation in construction, engineering and information technology events.
Pricing
The pricing will never be paid per licensed and per user. This would not be possible and accepted by all users/companies within the project as costs will have to be paid per participating company. Therefore, the same certain subscription basis will be continued and on basis of the project's size, duration and complexity. Subscription is usually paid for by the owner of the project or the main contractor, thus allowing everyone across and under it to use it without extra cost to the project contract.
Place
Main distribution channel will be the use of the internet and official website. Potential customers can have easy access to contact the company and arrange for free demonstrations wherever the client may be.
People
An Aggressive marketing team will persuade and influence new market through sales presentations. They will build relationships with customers. They will have good leadership skills in marketing and market research.
This team will promote core branding of Aconex globally while keeping the values of the organization. They will promote brand awareness to penetrate emerging markets in new regions.
Right people to continuously develop intelligent software to compete with rival products.
Evaluation of Strategy:
Market share - Aconex is becoming popular and joining bigger billion dollar projects in America, North Africa and is able to penetrate in new emerging projects such as the massive Romanian infrastructure projects developed by its government.
Sales Data- According to their Financial Books ending 30 June 2009, the revenues rose to 34% from their 1998 figures. Years before that, revenues would have doubled each year. The projects they are into now would definitely bring them back on track.
Consumer feedback- These multi billion projects that they are currently inlvolved with are eager and optimistic that Aconex will deliver their expectations. Testimonials of satisfied consumers can be read from their official website.
Feedback from staff- Careers from the Aconex team have evolved and the company is known to be one of the best IT companies to work with.
Task 3
Examine the implication of changes in the organisation's marketing environment and discuss how you would plan for implementing the chosen strategy in the light of emerging changes.
Current Changes and Responses to Changes
Aconex started to market it product to construction industries. Their reputation for delivering solutions to this industry gave them references which enable them to penetrate larger industries in other fields like energy, oil, gas and property and assets management firms. They have to pave way to big changes to accommodate the demands of the market. Bigger complex projects mean, more talented, hardworking, reputable and service dedicated staff. They now have to hire more people and create more departments within their organization. They not only cater now to project collaboration software service but also consultancy, customer training and manpower supply.
To service globally, they need to adapt to different external factors such as Political, Economic, Social and Technological factors affecting the trends that create the business they are in. The most crucial factor which affected them was the global economic crisis which shut down a lot of their potential markets and decreased the company's attractiveness to investors. Investors are needed to pump up funds for their marketing strategy.
Despite the meltdown in one of their most promising strategic location scheme in Dubai, they have managed to raise revenues in that area and maintained major projects. They penetrated other regions in the Middle East, like Oman, Qatar and Bahrain. They took advantage of the economic stimulus package of the government and were able to join projects as quickly as they could in locations in America. They deployed their staff to other locations and secure more prospect clients.
What they had to market was a need that came just in time under these circumstances. Projects resorted to downsizing administrative and IT departments and costs associated with it. "The competitive and technical environment in which businesses operates is an important part of the overall business environment. In some ways firms shape their own competitive and technical environment by creating and developing new ideas". (Surridge, 1993). Their product came in handy during the global economic change. It was a challenge for Aconex to improve their marketing strategies; to show the need for the online project collaboration technology, how the system works and its benefits. This was a motivating factor for them to accept the changes in the environment they are in. Because of fast changing technological advances, the company was pressured to improve quality and its level of service to the maximum level. They needed to be innovative enough to lead in the competition. More flexibility and resiliency was needed as changes in the environment occurred. Aconex may even be in constant look out for new fields of service outside their current operations. The effects made them re-forecast the orders they had as a result to cancelled projects and premature termination of contracts.
Control
To achieve the long term marketing objective of Aconex, the following areas should be monitored to gauge performance of the marketing plan that has been previously set and to examine how the organization has responded to any change in the marketing environment.
Monthly and Annual Revenue and Order Books
Monthly and Annual Expenses
Customer Response
Product Development
Summary
In order for Aconex to retain its position as a global service provider of online project collaboration software, it will use the international marketing strategy. It will continue to set out satellite operations in locations where there is emerging markets in construction and engineering projects. Market research will be extensive. It will promote core branding to maintain quality in performance and delivery of product expectations. It will invest on promotions and sales and marketing approach to convey products and benefits to market, not relying solely on the internet to advertise its product. It will be active and dynamic, going out to the market, demonstrate and sell its solutions technology. Product features and attributes should exceed customer expectations to compete with rival companies, encouraging innovation and intelligent solutions. High levels of customer support should be maintained to retain understandability of product and usage. Materials to educate and support users should not only be through printed help guides and telephone support but also through its online support and tutorial guide. Trainings will be conducted in training centres as well as on construction or project sites. Most importantly, a good customer relationship should be built by maintaining confidence in performance, being stable financially, and having an outstanding reputation as an organization and a partner in their projects to mutually help them achieve their business goals.
