As a project business, the Pig business model faces a most daunting challenge. While they may be similar one to the next, no two client projects are identical.
The Pig's value proposition is therefore the promise of a solution it has never before delivered.
The Pig promises that it has the knowledge and expertise to let it decipher, resolve, and overcome all project-related issues, including those that will prove to be "surprises."
The business often gains the needed knowledge and skills by working on the project.
Fluor (NYSE: FLR) is one of the world's largest design, engineering, and construction firms.
In May 2008. FLR was hired by Scottish and Southern Energy PLC to design and construct the Greater Gabbard Offshore Wind Farm. The $1.8 billion project, the largest offshore wind farm in the world, will be completed in 2011.
This is an entirely new business for FLR. It won the contract because it was one of the parties who entered into a joint venture to get the project off the ground (so to speak). They hope the project will provide them enough experience to bid for similar projects in the future.
Fluor is a virtual case study in how to run a successful Pig business. I recommend looking at a number of their 10K filings. Do so in cross sections: look at their latest filing, go back a few years and look at that one, then go back another few years and look at a third. You'll find the effort to be most instructive.
To improve your mastery of the business model template: Chickens and Pigs - The Book
