The construction industry has undergone considerable change in the last decade. Ever more demanding clients and fierce competition have resulted in many organizations having to look for ways of:
- differentiating themselves from their competition
- focusing on customer service
- getting to know their clients intimately
- building lasting and trusting relationships with their supply chain
- doing their marketing before trying to sell anything.
The imperative is for managers and organizations to improve their business development strategies and techniques. The contributors to this book identify the particular issues and problems connected with developing more effective approaches in this industry. An industry with a record of poor performance in most of the areas outlined above.
The long-term development and operation of a business is complex and risky. The factors that ensure a business achieves growth and profitability are difficult to determine. Many of the worlds leading business leaders and writers have offered prescriptions to sustainable business development. What we have however watched over the past few decades is the rise and fall of many organizations. Some of these companies were excellent while others were poor yet they all suffered similar fates. The construction industry has not been immune from the changes that have taken place with many longstanding companies disappearing from both the British (European) and world stages. The dynamics of business are no longer restricted to local, regional or national boundaries but take on a more global dimension.
The construction industry has not escaped the new more dynamic and faster changing environment. The business models of the past are being replaced by faster, flexible and more dynamic versions. The buyers of construction services, both public and private, have changed their attitudes to the performance of construction. They want fast, efficient, high quality and reliable construction with better value for money. Construction is expected to be more collaborative and responsive with a long-term customer service driven approach.
On the other hand, investors in construction organizations expect better returns on their investments. There are many alternative options for investors and construction is expected to provide similar returns to other investments. It is no longer an option to operate in the boom and bust cycles of the past. Such pressures mean that construction organizations need to look at their underlying short-term profitability and as well as their long-term strategic positions.
Construction is not a homogenous industry and is better characterized as a number of market segments coming together to form a representation of an industry. The traditional classification is that construction comprises of civil engineering, building, repair and maintenance, and materials sectors. Such simplicity would be easy but even within this framework other classifications such as housing commercial, public and industrial construction also exists. There are also variations in project size, complexity and location. Modern procurement approaches have also created crossovers between design, execute and operational activities. This definition does not include sectors such as petrochemicals, offshore construction, power, facilities management, etc. A large modern construction services organization can operate in a complex business environment. There will be competition within market sectors as well as across sectors. The process of developing a business has to be carefully thought through.
Industrial analysis clearly indicates that construction is a fragmented industry in which no single company has a dominant position able to influence the outcomes of the industry. This is essentially true for most of the European Union and North America. There are however countries where the development and protection of large construction organizations have increased the power of these companies. The general absence of monopoly generally means that levels of competition are greater. Once the analysis of the segments and sectors start it is possible to identify dominant organizations and they are particularly prominent in the specialist sectors. Construction has generally been considered a diverse project-led industry with associated fluctuations in demand. Further fragmentation has taken place as more construction firms try to create continuous income streams and move away from the uncertainty of project-driven industries. Business development within construction is a complex activity.