Contractor's competitiveness and competitive strategy in Hong Kong

Abstract

Understanding an organization's competitiveness and hence finding the competitive strategy has been an important issue for construction businesses, which has led to the increasing research efforts contributed to this research area. Hong Kong construction industry is vibrant and has special characteristics. Contractors in the local construction market are from different countries with different experiences and backgrounds. It is essential for contractors to adequately realize their competitiveness and therefore develop competitive strategies. However, few research efforts have been done on examining contractors' competitiveness and competitive strategy in the Hong Kong construction industry. This study aims to conduct the research on understanding contractors' competitiveness and competitive strategy in the context of Hong Kong construction industry. A theoretical competitive strategy model is developed for helping contractors formulate better strategy in competition. The external and internal competition environment in the local construction industry is examined, which helps contractors to identify their opportunities, threats, strengths and weaknesses in the local market. Key competitiveness indicators (KCIs) are identified through a questionnaire survey. And a fuzzy competitiveness rating method is introduced for helping to assess contractors' competitiveness. The results provide useful references for contractors to understand their competitiveness in the local construction industry. Furthermore, typical competitive strategies used in the local construction industry were identified. The competitive strategy model is validated by using the data collected from the second questionnaire survey. The results of correlation analysis show that the external and internal competition environment has substantial impacts on contractors' performance and selection of competitive strategies; and effective competitive strategies will lead to higher performance in competition. The results of cluster analysis show that contractors in the local construction industry take different strategic orientations by assuming different roles such as reactor, analyzer, prospector and defender. Competitiveness and competitive strategy are closely interrelated in the strategic management of construction businesses. Contractors should clearly understand their competitiveness in particular market segments and formulate their competitive strategies through effectively utilizing their internal resources and capabilities to grasp the potential opportunities in the external environment, and hence achieve superior performance in competition. The findings in this study are important references particularly to those overseas construction companies for understanding the local construction industry. Whilst the data used in the analysis are collected from the Hong Kong construction industry, the findings provide useful references for conducting comparative studies between Hong Kong and other countries or regions.