EXTERNAL ANALYSIS

STRENGTHS

The risk management approach by Northwest Constructors Inc. has proven to be successful. In the current year they have increased their "Cost Plus-Guaranteed Maximum" contract types up to 45%, up from only 26% three years prior. The profits of the company during that time have increased by 42% with a dollar amount of $5,276,000 earned.

Contract Types

Fixed Price 23%

Cost Plus Fee- Guarnteed Maximum 45%

Cost Plus Fee 32% 10,000,000 9,000,000 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 Earnings

Year 2020 Year-1 Year-2

The extensive lists of major clients and networking capabilities to be short listed for jobs is impressive. The company provides a wide range of services, project types and scales. There is a huge advantage of tenure of working in the Puget Sound Region for notable businesses mentioned.

WEAKNESSES

The company sees its highest revenue in the second and fourth quarters each year, determining there are issues such as clients need to complete work by spring or fall and weather factors. It is not understood as to why the company has a diverse project type portfolio and list of clients for this to be an issue. There is a great weakness in broken cash flows twice a year. In addition, the backlog has decreased from $211 million Year-2 to $142 million in 2020.

The company's current organizational structure does not indicate team members who are dedicated to serving the greater pacific northwest projects. The project and client focus for the Alaska, Oregon, Montana, Idaho and California regions should be a specialized sector, capable of growing the company outside of western Washington, providing stability.

OPPORTUNITIES

The broken cash flow in an average year plus a decreased backlog are two areas of opportunity to be profitable and stable. The company is currently seeking to increase government and institutional sectors of work. However, they are at this time unable to balance the institutional project completion dates with other projects to keep their cash flow from being broken in the spring and fall. It is recommended the company tracks all current projects and anticipated projects in a data base. This database should be compared to outgoing bids and look to fill the broken cash flow and increase backlog contracts with the new projects.

The company currently utilizes joint ventures on a project to project basis. It may be of value to consider a select number of partners to join into a project based joint venture. The joint venture partnerships can be used in the larger pacific northwest region of Alaska, Oregon, Montana, Idaho and California. Another option would be entering into a longer term partnership with another company who has a larger bonding capacity for the major clients listed whom have jobs which are beyond the company's capabilities or risk factors.

THREATS

The largest threat facing the company is keeping a competitive advantage in a market which is saturated with work and having the ability to have clients short list a local company over a larger national or global company. The re-organization of the business structure, updating of the company's databases and successful joint ventures can create tremendous value against larger companies entering the market.