Competitive advantage through
sustainable product development in construction
Introduction
1 2
In the modern business world a company needs to innovate to remain
successful. By using sustainable principles Corus can develop a lasting
competitive advantage.
Corus was formed in October 1999 through the merger of British
Steel and the Dutch company Koninklijke Hoogovens. It is a public
limited company, headquartered in London and quoted on the London
Stock Exchange and the Amsterdam-Brussels-Paris Euronext
Exchange. It manufactures metals including 17 million tonnes of steel
a year in Europe and the USA, and employs around 50,000 people.
Corus is listed on the FTSE4Good Index and the Dow Jones
sustainability indices.
Corus earns 30% of its revenues from construction and is an important
sector for the company. Corus is a recognised international brand in the
construction industry providing innovative metal-based products not only
to the European but also the global construction market.
Embracing sustainable thinking has for a long period played an important
role in new product development. This Case Study shows how Corus has
set about evaluating opportunities and developing products that minimise
the use of wasteful resources, whilst meeting the needs of the future.
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Understanding the external environment
Corus examined its construction strategy in light of the external
environment, to identify future market needs. By linking Corus
competencies and technical knowledge to future market needs, Corus
aims to develop products that give the company a competitive advantage
in construction. PEST analysis is a powerful tool that can be used to help
analyse the external construction environment. This analysis involves
examining the current situation with regard to the following factors:
◗ Political
UK Government policy and EU directives, for example, planning and
environmental issues including sustainability affect the construction
industry.
◗ Economic
The health of the economy and interest rates affect demand for
commercial and residential property. The UK government is using
taxation as a means to encourage improving environmental
performance e.g. The Climate Change Levy, Aggregates and Landfill
taxes. The construction industry is increasingly interested in whole
life costs of the building, which includes initial capital costs,
operating and maintenance costs - understanding how better design
can improve all these costs.
◗ Social
Changes in the birth/divorce rates and the average number of people
living in a household affect the demand for housing. Increasing
crime, ageing population, and people’s well-being are part of the
social dimension – research shows that the highest number of
disagreements amongst neighbours is due to car parking.
◗ Technology
New construction technologies affect working practices in the
building industry, constructing more component systems in factories
rather than on the building site.
PEST analysis can be extended to SLEPT through the
addition of Legal factors including legislation that regulates
industry. This is further extended to consider environmental factors
known as PESTLE.
◗ Legislation
The UK and European governments believe the construction industry
is highly fragmented and the only way to improve the performance of
the industry in terms of safety and environmental performance is to
increase legislation.
◗ Environmental
Two of the main issues here are meeting the Kyoto Agreement in
production of Carbon Dioxide from the burning of fossil fuels and
waste going to land fill.
Note: When using PESTLE as a tool for analysis it is possible to get
overlap between an issue which can be put into two sections. What is
more important here is to identify the changes and understand how those
changes will impact on the construction industry.
The factors identified in the analysis are concerned with the current
situation. However, to get first mover advantage it is essential to plan
for the future through forecasting events over the next 20 years using the
factors from the PESTLE analysis. This is partly due to the need to have
accreditation for products. This is a testing regime carried out by an
independent body against relevant British/International standards and
building regulations. On successful outcomes of the tests, a performance
certification is issued for the specific product in the specific application
- generally stating structural, fire, acoustic, thermal and durability
performance of the product. This is important as the Construction
industry is generally very conservative and hence, to introduce a new
product, it is essential to have third party validation that the product will
perform as the manufacturer states. Achieving this accreditation can take
up to a couple of years to get, and it then takes a substantial amount of
time to develop the product for today’s construction industry.
The process of forecasting future events is known as Road Mapping to
Corus. It allows Corus to understand changes in PESTLE factors over
time, identify how these affect the construction industry and link product
developments to these changes.
Road Mapping allows Corus to identify market opportunities, develop
products to meet these and identify which existing technologies can
manufacture them.
EDITION
9
 Conclusions from the
analysis of the external environment
3
◗ A sustainable building is one that limits energy use and scarce
resources. This is vital because 26% of the UK's energy use is
Corus is aiming to develop solutions that, as well as being resource
efficient, have a flexible and adaptable design. This means that the
usage of a building can be adapted internally without altering the
structure or exterior of the building (re-use). It is not possible to do this
with a building whose internal walls support/act as the structure and
support the floors. It is much more difficult to achieve this without

Modular Railway Platforms

linked to heating buildings.
major modifications.
◗ Governments will use building regulations and planning permission

controls to meet the Kyoto protocol.
◗ Outer town developments will be restricted in favour of inner city
developments including brownfield sites.
◗ There will be a shortage of housing as demand increases because of
more households and increased life expectancy.
◗ Land will be increasingly scarce and therefore expensive especially
in the South-East so it will have to accommodate more people per
acre, through dense development.
◗ As car ownership increases, there will be a 50% increase in
car journeys.
Residential Solutions
Aims, objectives and adding value
5
Working from its conclusions Corus has set out what it wants to achieve
in a vision for sustainable construction.
“Corus aims to create valued added products and services to promote
steel intensive commercially viable buildings. Through advanced design
and technology we will improve the quality of life in society whilst
enhancing the life-cycle credentials of the built environment.”
Products and solutions from Corus

Sustainability
4 This section explains two of the product areas where Corus is
Sustainability was a key theme in Corus' analysis of the external
environment. In 1987 the Bruntland Commission defined sustainable
development as "meeting the needs of the present without compromising
the ability of future generations to meet their own needs".
Most of the energy we consume - whether it is the petrol for cars or the
gas that heats our houses - comes from non-renewable resources like coal,
oil and gas. The reduction in energy use is, therefore, a key objective of
Governments. As well as a cost to the environment, energy has a cost to
those who buy it, and it makes good sense to reduce usage from both
these perspectives. Fuel poverty affects between 4 to 6 million people of
the population in the UK, this is not due to fuel being too expensive, but
because they live in accommodation which has poor thermal insulation.
Efficient use of resources including energy is paramount during the life
of a building. Buildings start off as raw materials like glass, which is
used to manufacture components like windows. These are then
assembled into systems like facades, which are constructed to form
buildings. At the end of a building's life the sustainable loop describes
how the product life can be extended.
The SUSTAINABLE LOOP Product Life Extension
Raw Material Component System Building End of Life
Corus regards it as important for all staff to know the direction towards
which they should be going, and vision statements are used as an
effective way of communicating this.
Added value is a key part of this vision statement. Corus' potential
customers in the construction sector include businesses which own
offices and other commercial property. These customers want, like
Corus, to increase profit and therefore returns to shareholders. They can
do this by:
◗ extending the life of the building so they can earn revenue from it
longer. The average life of a commercial property is currently only
20 years
◗ reducing the costs incurred over the life of the building especially
energy costs
◗ earning more revenue from a workforce which is more content
because of a better working environment.
Corus is developing solutions to add value for customers by helping
them in all these three areas. By examining the energy costs incurred
over the life of an office block, Corus has identified larger opportunities
for saving costs. This understanding will hopefully provide Corus with
a competitive advantage.
The environmental impacts of the different phases of an office
building's life cycle are:
Environmental Impact
Use and Re-Furbishment
63% e.g. Redecorating
Manufacture of Components
19% e.g. Window Frames
6 Glossary
developing systems in response to the findings of the external analysis.
◗ Residential solutions
Steel frames for homes and modular residential systems for flats,
constructed off-site in a controlled environment to precise
specifications (reducing waste), ensuring improved insulation
(reducing energy consumption) and air tightness (reducing energy
loss). These homes are being produced to the highest comfort and
energy efficiency standards that traditional building technology
struggles to achieve.
◗ Modular railways platforms
Rail traffic is growing, passenger numbers increased by 30% in the
last 5 years. The number of trains increased by 20% but the network
is congested and needs to be used more efficiently as mass transit is
more environmentally friendly than cars. To raise capacity on the
rail network, the train operating companies are planning to
introduce longer trains. However, many station platforms on the
existing rail network are too short, resulting in travellers having to
walk down the carriage to exit the train. Corus has developed a
system for the rapid construction of new/extended platforms. This
allows for the implementation of the longer trains and does not tie
up the track for long periods whilst the platform is being installed.
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Brownfield sites: Those which have been used for other
purposes in the past, often derelict and are re-developed for a new
purpose.
First mover advantage: This is a theory which says that the first
company to introduce a new product to market, has the
opportunity to extract the greatest long term benefit from the
product introduction compared to that which following
companies would be able to gain.
Fuel Poverty: Is defined as those needing to spend over 10% of
their income on fuel to have an acceptable living standard.
Merger: When two companies agree to come together to form
one.
Public limited company: Company whose shares are traded on
the stock exchange where investors can buy them.
Scarce resources: Those whose supply is limited, meaning a
choice has to be made between how they are used – “an
opportunity cost”.
Strategy: The major forward plan by which an organisation sets
out to meet its objectives.

Demolition e.g. Crane,

Conclusion
5% Dust Generation 7
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Disposal including Re-Use and By examining trends in the wider (macro) environment it is possible to For more information about Corus please browse:
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Re-Cycling e.g. Landfill, Re-Cycling

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identify product and market opportunities. The need for sustainable

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Extraction of Materials
4%
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construction presents many opportunities for Corus to add value,

e.g. Stone Quarrying
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and develop a competitive advantage. Using PESTLE analysis is an

RESOURCE EFFICIENT
FLEXIBLE & ADAPTABLE DESIGN
4% Construction e.g. On-Site Activity
For more educational support please browse:
excellent tool to examine the macro environment and by linking
Corus is also trying to concentrate on solutions for reducing energy this tool with future trends it is possible to develop products for www.coruseducation.com
impacts during the 'use' phase of the life-cycle. future opportunities.

EDITION

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