Selecting The Most Appropriate Procurement Strategy

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1.0 INTRODUCTION

A major determinant of project success is the selection of the most appropriate procurement strategy which will be used as a frame work to acquire the services of professionals in the industry (Morledge at al, 2006). This report presents the stages that have to be gone through in other to select the best procurement strategy for Janus Leisure plc.

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Before a suitable project strategy can be selected, there are many variables that need to be considered. However, Masterman (2002) explains that with regards to procurement, only those sub strategies which will have an impact on the ultimate procurement strategy should be considered. He therefore describes the process as consisting of: understanding the client, assessing client objectives, identifying the project constraints including risks and the method of organising the design and construction. These points will therefore form the framework of this report.

1.1 CLIENT

Clients in the construction industry are becoming complex in their requirements which has subsequently led to increased client dissatisfaction levels (Latham, 1994). It is therefore essential to identify the type of clients being dealt with as this will have an influence in the choice of procurement method. Based on the categorization of clients by Masterman (2002), Janus leisure plc can be described as a private organisation who generates its funds from its internally business activities and therefore are concerned with profit maximisation wherever possible. Furthermore, we can also say that, the client is an inexperienced client in terms of construction as their main business focus is horse racing. It does not involve in construction activities often and only owns 6 racecourses. However, it is assumed that, the client is very aware of what infrastructure of its business should look like. Finally, we can also say that Janus leisure is a secondary client who requires the building to enable it them house their business activities. This therefore means that construction represents only a small percentage of their annual turn over.

1.2 PROJECT SCOPE

The company intends to improve its flagship racecourse at Melchester which hosts the 5000 guineas stakes every year. The proposals are to be undertaken in two phases:

Phase I

demolition of the existing grandstand

the construction of a new 5-storey grandstand to include an extensive conference and exhibition centre (10,000m2 total) and associated external works (budget £25M)

refurbishment of two existing stands circa 100 years old (budget £5M)

Phase II

construction of a new 120-bed hotel facility and casino (budget £12M) to be operational for the 2013 5000 Guineas Stakes meeting in mid-September

1.3 CLIENT OBJECTIVES

Janus leisure plc has to consider a number of factors in other to choose the best procurement strategy for the project.

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