Babcock International in 2013 was amongst the biggest engineering services supplier in the UK with sales of over GBP3 billion. Under the direction of CEO Peter Rogers, Babcock had grown sales and profits nearly tenfold over the last decade as it benefited from increased public sector outsourcing. In the year 2012, for the UK's Ministry of Defense (MOD), Babcock trained over 50,000 troops, maintained the nuclear submarine fleet, provided engineering support for military vehicles, and managed numerous facilities at military bases. On the civil side, the business maintained the Metropolitan Police auto fleet and other emergency services fleets decommissioned nuclear plants that were aging, and was the UK's top trainer of engineering trainees. Babcock's direction team considered that continuing pressure on public spending would provide chances for double digit increase in Britain for at least five years.
However, this might not come from Babcock's primary customer, the Ministry of Defense. What other national and local government agencies might the firm goal? On the civil side, the resurrection of the salience of nuclear power generation in the mid 2000s had seemed to be great news for Babcock with its long-standing atomic expertise, but the April 2011 Fukushima atomic flow in Japan had shed doubt on future construction, while the fracking of shale deposits to extract natural gas assured a much lower cost supply of abundant energy. Nevertheless, growing and steady work was promised by decommissioning nuclear power stations. What other chances might Babcock pursue in the UK? Analysts were pushing for more international growth but efforts at Construction Company in South Africa, Canada, and Australia had been slow, with only 16% of sales coming from outside the UK in 2013, a figure little altered since 2005. What would drive the long term future?
PUBLICATION DATE: March 06, 2014 PRODUCT #: 714496-PDF-ENG
This is just an excerpt. This case is about STRATEGY & EXECUTION
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