Although the UK manufacturing and construction industry has contracted over recent years, there are still many UK companies operating in this sector. This Case Study demonstrates that it is possible to prosper in this sector by developing competitive advantage through new product and service development. It shows how the manufacturing of products can be combined with the provision of services to provide total solutions for customers.
Having a competitive advantage means that an organisation is excellent at what it does and different from its rivals. One approach is through innovation and differentiation, e.g. offering a new product or unique service.
Portakabin has achieved competitive advantage through innovative product development - 30% of its sales revenue (turnover) is generated by products that have been launched or re-launched in the last three years.
The Portakabin Group is a private company, owned by the Shepherd family, involved in the hire and sale of interim and permanent accommodation. For more information about the company's structure, please see Portakabin's Edition 8 Case Study.
Portakabin Limited, an important Group member, specialises in producing modular buildings, operating 45 hire centres across the UK, employing over 1,300 people and increasingly developing European operations. Buildings are manufactured and fitted out in a factory environment, while foundations are prepared on-site. The customer's modules are taken to the site, craned into position and linked together. Architectural features such as lifts, stair towers or cladding are added on-site. In terms of market positioning Portakabin is located at the top end of the market with quality products and premium pricing reflecting high value for money.
Portakabin operates in an extremely competitive market with 20 major national competitors in addition to local rivals. Portakabin is the market leader with 15.4% of the overall UK market (its nearest competitor has 14%. In Europe, Portakabin has 3% of the market and competes with the world's biggest provider GE Capital, as well as major continental companies such as the French company Algeco - the European market leader. The UK market is mature, so growth is challenging to achieve. However, Portakabin must protect and build its UK market leadership and this need, coupled with a concern for customers, drives its current exciting new product and service development strategy. Portakabin's commitment to its customers is summed up in its charter, which includes:
- answering calls within four rings
- a response to enquiries within 24 hours
- the building to be delivered on time
- the building to be provided to the agreed contract sum
- giving a rectification response within 48 hours
- including customers in a customer care programme.
In addition, if their building is not delivered on time Hire customers will receive a week's free hire for every day the building is late, up to a maximum of four weeks, whereas Sales customers will receive an additional six months warranty on their buildings.