Now the third actor or level to drive this transformation is Foreshore. Companies. Actually, companies needs to be desperate head of this transformation. During the work we did, there were four areas a company need to think about during such a transformation. The first area is strategy. Let's take a few examples on this area. As mentioned in the start of this course, about the industry characteristics in specific, there is a fierce competition in the market, it is so fragmented, and margins are really slim. In some cases, as I mentioned, five percent or much lower to one to two percent only. Therefore, firms are seeking opportunities to differentiate their business models. Not even that, they need to differentiate their services to be able to identify their sweet spot strategic focus. To differentiate the business model, companies need to find the right balance between developing customized solutions on specific service or becoming more general and thereby achieving economies of the scale. Now, in today's construction markets, many engineering and construction firms, E&C firms, are struggling to develop the required know-how internet. One strategic approach to overcome this is to improve collaboration or partner with, merge with or even acquire other companies. Now, when speaking of mergers and acquisitions, this will be an option when the company complements the portfolio to the other company. Or it can be a company that mustard a specific rising technology or certain technological and digital services, or been pioneer in specific geographical location, just to name a few. Which we actually started to see more of these M&A transactions. Especially we saw that now in the rising promising startups in AEC industry. Let me give you an example with numbers. The M&A transactions with companies that they are technology-based service firms, are few examples we found in the literature, especially in the last two to three years. In 2018 alone, we found a couple of them. Oracle acquired Aconex for 1.2 billion. A global positioning giant Trimble snapped at Viewpoint for also, based on the literature 1.2 billion. Autodesk acquired Assemble Systems for an undisclosed sum, and the Trimble also acquired e- Builder. Just to name a few. But of course [inaudible] touch base in other conventional, traditional companies and their M&A transactions. All of us or the majority of us also heard about [inaudible] acquiring your S-Corporations several years ago, Jacobs acquired CH2M Hill. The Canadian Company, WSP, acquired Parsons, Brinckerhoff, based here in the US from British company, Balfour Beatty. Canadian also Company SNC acquired Atkins, again, just to name a few. Now moving forward, the industry should also invest in design and systems and as well as the products in general, but they need to consider the improved life-cycle performance. Considering not only the first costs of that project. For example, when we build a building, you need to consider not only the design and construction expenses, but also the longer-term costs, such as utilities and operation and maintenance. In some cases, or most of the cases nowadays, you have to consider what we call externalities, such as green gas house emissions, and the pollution of soil, the pollution of water, and even the pollution of air. Two or maybe three industry examples that I would like to share with you here are the following. First, BRE innovation parks, they have several global showcases that experimentally incorporating new sustainable construction technologies with increased life-cycle performance. For example, and insulation material originally developed by NASA, has been adapted for use in window blinds that control heat in different seasons and can save up to 40 percent of energy cost during the operation phase of the building. Another company called A View, I had the pleasure to communicate with their founders in several occasions and several time. They manufacturer, smart windows, they're smart windows, a transition seamlessly between 4 tenth starts. They achieved this by applying a nono layers of electrol chromic coating. They put the coating on the surface of the class. Now respond to a tiny voltage, the tending, the the glass and putting you in control of your review, so no need for shades or appliance ,and in result be able to somehow have an impact or control on heat in your living and working space. Another last example would be Target, French based, which committed to make a transition to the circular economy and has developed an approach called closed loop circular design. The foundations of this approach include choosing good materials that can be recycled, minimizing the environmental for the printed unit production, creating products containing minimum levels of total VOC volatile organic compounds. Changing the mindset from an End of Life product to an End of Use Product. It's fascinating. Now, moving toward the last example under strategy. As you know, the construction industry, usually a local business in which the local relationships, assets, and resources are extremely important. That is why traditionally, firms focused only on their home countries. As mentioned in the start in my course, there is many trend in urbanization as well as more complex and mega projects and programs in arise. They are happening in different part of the world, especially with the rise in merging countries. Therefore, a new construction markets are opening up for developed country companies. With that, companies need to develop a clear internationalization strategy. Now, when entering a new country, you can enter by either acquiring and buying local company or organically grow in that area by taking small product and grow slowly, or partner with usually local firms. Actually, the business strategy is to cooperate with local firms. In that way, the company can combine their own expertise with their new partner's local knowledge and relationships. The value of local partners is particularly high. In respect of understanding one national or regional regulatory requirements, or dealing with the local labor force and also negotiating your way through culture. There are many, by the way, example I can think of to share with you when it comes to the culture I'm very passionate about that are, we have to understand that very carefully. But let me give you just one example about Atkins when they acquired Howard Humphrey that is based in Kenya and Tanzania to help expand, it's global infrastructure presence into East Africa.
