0MANAGEMENTCONSULTINGPREP©2013MConsultingPrep,Inc.1DeltaConstructionDeltaCons(Delta)isanEngineering,Procurement,andConstruction(EPC)CompanywithmostofitsprojectsintheMidwest,theUnitedStates.TherearetwomajorwaystobreakdowntheEPCindustry.Byvaluechain,everyEPCprojectneedstogothrough3steps:First,aprojectmustbedesigned,orinotherwords,beengineered.Thisstepisnotlimitedtojustarchitecturaldesign,butalsoinvolvesstructure,technical,andfunctionaldesign.Thisisthemostdifficultpartofthevaluechainandonlyafewcompanieshavethecapabilitiestoplayinthissection.Onceaprojectisengineered,componentsneedtobepurchased,orinotherwords,procured.Componentscanbecommoncommoditieslikesteel,cement,brick,etc.tomoreproject-specificequipmentliketurbines,engines,etc.Andfinally,allcomponentsneedtobeassembledtogetherinspecificlocations,orinotherwords,constructed.Thisstepoftenrequiresonlysimplecapabilitiesandthereforehasthemostcompetition.TheotherwaytobreakdowntheEPCindustryisbyprojectsegment.Dependingonthepurpose,aprojectcanbeclassifiedintodifferentsegments.SocialInfrastructurereferstoprojectsforcivilpurposeslikehousing,officebuildings,schools,hospitals,etc.TransportationInfrastructurereferstoprojectssuchasroads,bridges,airports,etc.ProcessIndustriesreferstoprojectsfordifferentindustrialpurposessuchasfertilizerfactories,oilrefineryfacilities,etc.Utilitiesrefertoprojectsthatservepublicconsumptionsuchashydro-powerplants,watertreatmentcenters,etc.2Historically,projectownersweretheirownprojectmanagersandcontractedoutmultiplepartsoftheprojecttomultipledifferentcontractors.However,projectownersnowadaysareswitchingtoturn-keyprojects,meaningtohireonesinglecontractorforthewholeproject.Thesinglecontractortakestheprojectmanagerroleandsub-contractsoutsmallerpartsifneeded.DespitebeingthebiggestEPCCompanyintheMidwest,Deltaisfacingincreasingcompetitionfromcompaniesoutsideofthearea.TheCEObelievesthatthecurrentglobaltrendintheEPCindustryisnotfavoringDelta.HestatesthatDeltadoeshavestrategiccapabilitiesincert...
