Mace been offering various levels of facilities management
Mace Macro, part of the Mace Group (an organisation offering project management and consultancy services internationally), is a wholly owned subsidiary specialising in the field of facilities management. Established in 2002, Macro emerged naturally to compliment the construction and property services which were currently provided by Mace. Prior to this, Mace had been offering various levels of facilities management from the 1990’s but more as a support service as opposed to a self-operating separate activity. An example of this would be the request to assist in mobilising the required support services for the new HQ of British Airways. Mace had managed the construction and handover process and was seen as the natural choice to oversee the handover to a service provider.
The British Airways project was a catalyst, with other clients keen to engage Mace to assist with a number of issues relating to the management of their properties. This provided evidence that there was a gap in the market for a company specialising in this particular field, which lead to the creation of Macro. This formation was able to amalgamate the knowledge and experience of management teams with the understanding of the clients’ needs. As a result of some carefully calculated purchasing in London (FM24), Scotland (FIMS) and the north of England (Maxim), and the successful completion of some prominent projects, Macro was able to establish its standing in the industry within a relatively short period of time.
Macro Timeline Highlights1. September 2002 – Macro established2. 2004 – First international engagement – providing consultancy to JBR, Dubai3. February 2008 – Invesco provides Macro with the first opportunity for overseas engagement from a UK based engagement4.
March/April 2008 – Macro opens in the Middle East, beginning its international consultancy services, for Emaar’s Old Town Island project5. May 2008 – In its inaugural year Macro is announced as the FM Middle East awards, Consultant of the year. This success was followed by being the recipient of the award for a further 5 consecutive years, 209 – 2013, then again in 2016 and 2017 6. Sept 2009 – Following the Invesco overseas engagement is expanded to 26 North American locations. Macro expands its Middle East presence by commencing operations in both KSA and Qatar 7. 2011 – Macro awarded its largest contract, the supervision of FM services to more than 3,500 buildings in Abu Dhabi.
Macro begins operations in India The establishment of Macro, firstly domestically and then expanding internationally, was not a decision taken lightly. A significant investment was required. In 2008, an initial CAPEX (capital expenditure) to allow the Middle East commencement of Mace Macro International was circa £150k, with an OPEX (operating expenditure) anticipated to be £300k. A total primary investment of nearly half a million pounds. The 2010 Mace Group financial statement provided the initial audited accounts which were inclusive of Macro.
The reported turnover, for Macro International, for the period 2008-2009, was £840k. Building on that solid beginning, year on year, a significant growth has been shown for the international business, with 2015 returning a £23,2m turnover solely for the Middle East. Based on these figures, a considerable increase is expected in the 2017 accounts, which are due for publication mid-2018. When combining both the domestic and international markets, a global turnover of £76.6m was generated. The Mace Financial Report (2015), is freely available to the public.
The Mace Group is currently present in 50 countries (Fig. 1) whilst Macro now has operations established on 4 continents: North America, Europe, Australia and Asia, operating in 23 countries offering a variety of services to an equally variant client portfolio.Fig. 1 Macro currently directly employs 681 people; this includes the UK and international operations. A recent financial status for Macro is shown in Fig. 2 below. This chart indicates total turnover and the respective turnover for each of the individual business stream.
The total profit for the period is also shown.Fig. 2 Even with the noteworthy growth in the preceding years, there is still ample opportunity for continual growth, not only for Macro, but for the Mace group as a whole.Group TargetsA group vision does exist for Mace concerning its growth and its expansion. The Mace Group does have a vision in place for group wide growth and expansion.
2012 saw a significant step taken in achieving the vision; a £1bn turnover was achieved. Fig. 3 shows the growth levels that contributed to this milestone.Fig. 3 Source: www.
building.co.uk (2013)Considering the successes up to 2012, the Mace Group has amended its vision significantly. The 2020 Vision has the target of the Mace Group reaching a £2bn turnover by 2020. As a subsidiary company, Macro has developed its own strategy to be supportive of this.The forecast targets for Macro are shown in Fig.
4. The forecasted targets, despite being bold, are more than achievable, but will take determination and performance from all levels of the employees. Several factors will affect the growth in terms of financial strength (by means of income generation) and market position in achieving the targets.
These are shown in Fig.5 below.Fig.5 Service for MarketingThis report is to identify the business stream that would receive the greatest benefit from a marketing drive. On initial viewing, it may be assumed the area to that requires growth, in terms of turnover, would be the helpdesk function.
However, despite the lower turnover, the margin, based on a relatively low head count of staff, is greater than that of managed services, even with the large disparity in turnover. As a result, we will develop a marketing strategy focussing on our managed services function, to not only grow our market share and turnover, but increase profitability and gross contribution to the group. The first step is to identify where in the market our managed services currently sits.
This will be achieved by the use of the BCG matrix shown in Fig.6. In order to use the matrix, it is imperative to understand the terminology and how it is applied:Cash Cows – high market share in a low growing marketStars – good market share and good growthQuestion Mark – unknown product in the marketDogs – low market share and low growth rate A critical analysis of the revenue generation of the managed services individual offerings, allows us to define and identify the individual services which fall under its control.Cash Cows – Our managing contractor engagements (47% of turnover, large market share)Stars – Our managing agent engagements (41% of turnover, large market share)Question Marks – Technical hands-on services (10% of turnover, small market share but potential to grow)Dogs – Owner’s association management (2% of turnover, static market share for 5 years)Whilst we could possibly look at improving the owner’s association function, historically, across the UAE, there has been little growth or development of this market. We should therefore concentrate on our technical services, as this has a greater potential for growth. To provide clarification in which to develop a marketing plan, we should carry out market research into the viability of the promotion of services.
Market research will be used to specifically and purposely obtain as much information about our business as possible. Typically, information will be obtained from a number of sources, and will depend on the who, the what and the why of the purpose of the research. The primary driver for the collation of this information is to be aware of the competition, trends/fad and especially, the consumer wants and needs. Figure 7 details the usual methods of this type of research.
Fig 7 Source: Referenceforbusiness.com (2017)Information, unless it is interpreted is of no value, and must be understood. Jamil (2016) states ‘marketing data and information must be provided from a variety of sources to produce knowledge, in a process that can be characterised as organizational intelligence”. This interpretation is an integral facet of the 6 marketing steps that are required.
This is shown in figure 8.Figure 8 Source: mymarketresearchmethods.com (2017)Marketing ObjectivesHaving identified the technical services as our focus, establishing objectives, for the next 3 years is paramount for success. These objectives must be SMART as defined by Blanchard (1985):SpecificMeasurableAchievableRealisticTime-boundIn order to create these objectives, we need to establish the particulars of our service.
This can be achieved by the use of either a SWOT (RapidBi 2016) or PESTLE (CIPD 2013) analysis. As we currently operate in the UAE and have an understanding of many of the facets of a PESTLE, for this report, a SWOT analysis will be used.Strengths – established name and presence, brand recognition, ability to offer a one-stop shopWeaknesses – limited activity within technical services, low employee numbers, higher overheadsOpportunities – continued housing construction with an increase for maintenance activitiesThreats – smaller operations, existing providers in the industryBuilding on our strengths, we can develop objectives which will combat any weakness and threats, and also embrace any opportunities. Considering the analysis, three SMART marketing objectives, will be:1. Attract new customers (increase market share)2. Build brand awareness3. Increased revenue It would not be ineffective to use a scatter gun approach (trying to cover the entire market) in pursuing these objectives; we have to consider where potential lies and create target segments from that consideration.
This creation of segments is supported by Cheng (2017) who states, ‘a comprehensive attitude-based market segmentation analysis can identify distinct market segments in order to best serve the needs of each segment and to develop plans to increase usage.The more defined we can make each segment, the more focussed Macro can be in specific marketing. The University of Minnesota (2017) provides details on four dominant marketing characteristics:• Behavioural: How will customers use our services and what benefits do they want?• Demographic: Hoes does ethnicity, background and age have an impact on what they purchase?• Geographic: Customer locations and how are they reached? Based on their locations, what do they purchase? • Psychographic: What do our customers think about and what do they value? How do they live their lives? Segmentation Target Segment Unlikely Possible Likely Very LikelyGeographic Country of Origin Asia Emerging Nations Westernised Europe Density Rural Town and rural City CityDemographic Age Under 20 20-25 25 -35 35 and over Gender Male Female Male ; Female Male and female Income Low Middle High High Occupation Students, manual labour Students, semi-skilled Businessmen,Professionals Businessmen,Professionals Education High school TechnicalBachelor’s MastersBusiness schools MastersBusiness schools Social Status Low Low, middle High High Housing Shared Apartment Villa/Compound Villa/compoundPsychographic Lifestyle Low-orientated Moderate-orientated Achievement-orientated Achievement-orientated Personality Downbeat Easy-going Determined AmbitiousBehavioural Benefits sought Affordability Value Convenience Convenience User status Self-reliant Semi-reliant Reliant Reliant Attitude Indifferent Indifferent positive Positive Enthusiastic Marketing MixAfter reviewing the segmentation table above, we can see that there are distinct social groups – one which would be less likely to welcome our services and one which would. Rather than expend time and resources on an unlikely group, we should focus our attention to the likely/very likely demographics. Having established who Macro should be targeting, the next question is how do we actively target these potential customers? According to Ivy (2008) the traditional marketing tools are grouped, historically, into the 4 P’s; Price, Product, Place and Promotion (The Marketing Mix). There are also 7P’s (CIM 2009) but for this report, we will concentrate on the more typical 4.
Fig 9 Source: The Marketing Mix (2018)In devising our marketing strategy, Macro must consider the various elements of these 4 P’s• Product – Where will the service be used – home or work?What trades will Macro offer?Are there any trades Macro need to add?What terms of engagement will be available?How are Macro different to the competition?• Price – Pricing strategiesWhat is the cost to Macro to offer the service?Do customers believe they receive value for money (perception)?Can Macro lower their price point, but increase market share?• Place – How will customers discover Macro’s services?How can Macro differentiate their distribution strategy from that of their competitors?Do Macro require a dedicated sales team?Should Macro attend trade exhibitions?• Promotion – How best to communicate with potential customers?When is the optimum period for promotion?Is social media a good medium to consider?What do our competitors do to promote their businesses?Table 2 illustrates how Macro should interpret the descriptors and the subsequent actions.Table 2Item Description Macro ActionProduct What do the customers want? Not to presume that we know best, speak with and engage the clients as to their specific wants and needsPrice Only worth what the customer is prepared to pay Cheapest is not always what the client wants, Macro can offer additional services which can enhance the value for money our clients feel they receivePlace Delivery of service at the right place and at the right time Adhering to our own internally agreed KPI’s and with the clients KPI’s. Late delivery of services will inhibit the likelihood of repeat business or recommendationsPromotion Brand advertising, PR, special offers, exhibitions Macro to raise their profile by attending expo’s, articles in magazines, press releases on successes, increased use of social media, sponsoring charitable events etc.No matter how good the Macro product is, unless it is heard of or seen, there will not be the growth or expansion that is planned.
Macro have to be mindful that marketing is not just advertising or selling, but it is a key management discipline that enables the suppliers of services to interpret customers wants, needs and desire; and to match or exceed them, in delivery to their target customers. Whilst not part of the marketing mix, further clarification can be provided by the use of the 4 C’s, developed by Lauterborn (1990), with their interaction and complimenting of the 4 P’s. This interaction is shown in Fig. 10.Fig.10 • Customer Value – rather than placing the emphasis on the product, the emphasis is shifted to something missing from the customer’s life • Cost – whilst the selling price is important, the overall cost of the service must be established• Convenience – it must be straight forward and uncomplicated for the customer to purchase our service, and believe the service they receive is cost effective• Communication – constant dialogue is required between Macro and its customers Having an existing presence in the region (Macro is present across the whole of the UAE) will be a distinct advantage when considering new possible avenues: it will provide a more informed insight into the needs and the possible entries. This market research is crucial prior to any consideration of expansion (current competitors, financial stability, quality of locally available employees, long term viability based on future domestic growth plans for each service, (prevalence of corruption based on region, tax liabilities, cost of living etc.
) as discussed by Barkema and Vermeulen (1998). An area where Macro are well placed to strengthen their existing market presence and to aid their future expansion aspirations is one of added value. The services that are already offered in excess of a traditional FM role: consultancy, helpdesk, owners associations etc. do give Macro an edge over their competitors. The ability to manage a project from design review to steady state operations in one that clients would actively seek.
Another area for Macro’s consideration is partnering with select clients. Collaborative partnerships in business benefit from the close, trusting relationships between partners. Network strength and openness create profit amongst businesses that have created trust between them. Collaborative partnerships between businesses often generate higher levels of productivity and revenue when there is stable, bidirectional communication between parties. These partnerships develop into longstanding practices and relationships that can extend beyond the length of a single project. Internationally, ISO 44001; Collaborative Partnerships (2016) (formerly BS 11000) could be embraced and employed to grow these partnerships. Progressing a project from design to occupation, with partnerships in place, could see Macro recommended by our partners as the service provider of choice to their tenants/owners.
Market research, as previously mentioned, is pivotal in the forming of a marketing strategy; it can also be known as a marketing audit.This strategy must be aligned to the overall corporate business strategy and supported form the top down, an unsanctioned plan will fail through lack of commitment throughout the company.Irrespective of the routes taken for expansion, crucial to the success is the cohesion with the financial department of the company.
The support offered by finance teams is invaluable and includes:• Information on project financial implications• Clarifies consequences of decisions• Develop and produce business strategies• Monitoring and control of finances (including internal audits)The financial department “buy-in” is of vital importance for any strategy to succeed. This was discussed by Moles et al (2011) and shown in Fig. 11. All plans and budgets, even those thought to be independent, form part of the symbiosis of the company finances.Fig. 11 Marketing ActionsHaving identified, through segmentation, the sectors that we should be aiming our marketing at, we can tailor the marketing methods to ensure our campaign reaches, and is received by our chosen segment, to achieve the objectives previously stated and repeated below.1.
Attract new customers (increase market share)2. Build brand awareness3. Increased revenue It would be fair to presume, based on the analysis, the vast majority of those likely/very likely to engage our services would be active on social media. Mediums such as Facebook and Twitter offer extremely cost effective methods of advertising – low cost, large audience. Whilst we do have social media pages, these are generally used for internal announcements or business related news.
To change these, or create specific pages is straightforward and immediately reaches a large audience.We should be actively building on relationships with existing customers, with high emphasis placed on CRM (Customer Relationship Management). Use these customers as a positive advertisement; recommendations from friends on a service they have received will bring in new business far quicker than cold calling potential clients.
There should be emphasis on the size of Macro; we are not going to disappear overnight, and have the resources to fulfil obligations, unlike smaller less established providers. Clients have to perceive they are receiving value for money, not necessarily the cheapest.As previously mentioned, the finance department will have to agree to a budget.
This would be needed to visually promote our brand; whether this is in the form of posters, flyers etc. or a greater number of vehicles with company livery. We want people to think “where have I seen that before” when they see the Macro logo.To reduce our price point may seem counter-intuitive when discussing increasing revenue, but, as our market share grows, we can afford to reduce cost, but still maintain the same margin, with the same high level of service offered to clients. A 5% margin of many clients is far more profitable than 15% of a few clients. Considering the time scale of 3 years to achieve the targets, we cannot just do one thing and then wait to see if we are successful.
It will be a continual process and one that will need monitoring and adjusting, depending on market conditions. The Plan, Do, Check and Act cycle (Deming 1950) Fig. 12, is the perfect tool for this purpose. Fig.12 Source: www.balancedscorecard.
comUsing this cycle, Macro will be able to react positively; changes discovered during the check stage can be implemented in a more proactive manner than purely reactive. ConclusionEven though the targeted growth is somewhat ambitious, Macro’s position is well placed to enable the achievement. Strength exists within the company, and the development of a service will develop those strengths and in this, will enhance the strengths of Macro as a business. This pool of strengths will also maintain the professional level of services that Macro currently offer and will be able to offer to new and existing clients. Carrying out detailed research into potential new markets will open the door for entry into those markets. Attempting to enter these markets without this research would be likely to fail, resulting in financial losses and detrimental effects to Macro’s excellent reputation.Accurate market analysis allows for more focussed financial planning for the service development, budgets have to be put established and controlled.
Overspends may not always be easy to be recovered.A continual process of management is crucial to the success of the plan, without it, how can there be measurement? Macro will need to learn from what did go wrong even more than from what went right. The costs of managing the risks regardless of their type (funding, spending, operational etc.) will always be far outweighed by the costs of not managing the risk. The continual monitoring may be the single most important activity carried out.
Without the adoption and implementation of the measures highlighted within this report, the Macro vision will remain just that, a vision but never reaching realisation.