Multiplex company - corporate failure and turnaround
Multiplex is a market leader construction company originally from Australia. It is a case of a company built from zero by John Robert in Australia, turned into a multinational with activity in the Australian Continent, Middle East and Europe. Within the property sector, the Multiplex group plays a role in the property investment, construction, development and facilities management sectors.
Wembley Stadium was demolished in 2003 and Wembley National Stadium Limited (WNSL) planned a new stadium, looking for tenders for the construction. Listed on the Australian Stock Exchange in 2003 and always looking for new opportunities to grow, Multiplex saw this project as a chance to grow and affirm its presence in the UK. Multiplex won the contract to rebuild the stadium, for a fixed price contract of ₤445 million with a tight completion timetable. Many industry commentators believe Multiplex was keen to do the project, perhaps for an expected low return, to get their ‘foot in the door’ with a major, visible UK project: a loss-leader that would lead to greater future business there. Dreams of a triumphant entry into the UK market however turned into a nightmare. Multiplex’s reputation in the UK was shattered by cost blowouts and by late completion of the project by at least a year. It was the biggest loss on a construction job in British history.
What went wrong?
* From a solely construction company, Multiplex expanded its activity portfolio to also include property investment and investment management, development and facilities management. The success over the years and the belief of understanding the market requirements and risks made the management and board of the company undermine the challenges brought by geographical and activity expansion. Diversification and development were given attention at expense of basic activities. This was a very big project, not easy to manage and requiring focus, which