Competition environment, strategy, and performance in the Hong Kong construction industry

Given a changing competition environment, strategic management has become of essential importance to construction firms. Effective strategy enables construction firms to match their activities to the changing environment and achieve superior performance in competition. Therefore, there is a need for studying contractors' competitive strategies. This paper does that in relation to the Hong Kong construction industry. The impact of competition environment on contractor performance, and the relationship between competitive strategy and performance are examined by a questionnaire survey. The findings show that competition environment has a great impact on contractor performance, and four generic competitive strategies have been applied by contractors. Contractors can indeed be classified into four groups according to their different strategic orientations: prospectors, analyzers, defenders, and reactors. As a result, the strategies that contractors should pursue in the local construction industry can be identified with confidence.