Strategic Management in Construction

Transcription

1 Strategic Management in Construction Second Edition David Langford & Steven Male b Blackwell Science

2 ( 2001 by David Langford and Steven Male Blackwell Science Ltd, a Blackwell Publishing company Editorial offices: Blackwell Science Ltd, 9600 Garsington Road, Oxford OX4 2DQ, UK Telc +44 (0) Blackwell Publishing Inc., 350 Main Street, Malden, MA , USA Tel: Blackwell Science Asia Pty Ltd, 550 Swanston Street, Carlton, Victoria 3053, Australia Tel: +61 (0) The right of the Author to be identified as the Author of this Work has been asserted in accordance with the Copyright, Designs and Patents Act All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, except as permitted by the UK Copyright, Designs and Patents Act 1988, without the prior permission of the publisher.. First edition published 1991 by Gower Publishing Company Ltd. Second edition published 2001 by Blackwell Science Ltd. Reprinted 2005 Library of Congress Cataloging-in-Publication Data Langford, D.A. Strategic management in /David Langford and Steven Male. - 2nd ed. p. cm. Includes bibliographical references and index. ISBN Construction industry - Management. 2. Strategic planning. I. Male, Steven. 11. Title. TH438.L dc ISBN-10: ISBN-13: A catalogue record for this title is available from the British Library Set in 10/12.5pt Palatino by DP Photosetting, Aylesbury, Bucks Printed and bound in Great Britain by Marston Book Services, Oxford The publisher s policy is to use permanent paper from mills that operate a sustainable forestry policy, and which has been manufactured from pulp processed using acid-free and elementary chlorine-free practices. Furthermore, the publisher ensures that the text paper and cover board used have met acceptable environmental accreditation standards. For further information on Blackwell Publishing, visit our website:

3 Contents 1 1 oi Part A - Construction and its business environment 2 Construction - an overview of the market Industrial building Coininercial building The housing market Repairs and maintenance Making sense of the trends 3 The strategic role of the actors in the process The evolution of the industry in the post World War I1 era 4 Clients, constructors and competencies The concepts of product and project life cycles in The strategic concepts of industry md imrkrt in Market structure, price determination and competition in Conclusion Part B - Concepts of strategic management 5 The firm and the strategic management process The strategic management process The strategic management process and organisatinnal chclllgr The management of change in Strategic behaviour Conclusion

4 iv Contents 6 Strategic behaviour of firms Core business and core competencies in Levels of strategy Managing the diversified firm Strategies at the operating core in contracting firms Project portfolios and potential capacity Sub-contracting as a production strategy within project por [folios Thc tnanagcmcnt rcsourcc in firrns as a sourcc of competitive advantage - resolving a strategic paradox Conclusions 7 Strategies for international Background InternationaI business strategy Size and structure Reasons for internationalism Cl-taracteristics and obstacles to internationalisation Competitive advantage and strategy in international Competitive advantage in international Factor conditions Domestic demand conditions Related and suppiier/sub-contractor industries Firm strategy, structure and competitiveness Country analysis General overview Strategic positioning cornyctitivc intclligcncc Part C - Techniques for the strategic planner 8 Portfolio management, Delphi techniques and scenarios Business portfolio management The Boston ConsuIting Group growth-share matrix Portfolio management and the industry Delphi techniques Scenarios Cross impact analysis 9 Marketing and promotional strategies in The marketiiig concept Marketing orientation and relationship marketing philosophy Service quaiity and customer satisfaction Internal marketing Internal customer satisfaction

5 Contents v Customer care Marketing strategies - market choice and segmentation The marketing mix in service industries Promotional strategies Promotional media (personal/ non personal) Co-focusing on customer service - the problems to be overcome Part D - Suiiiiiiarg 10 A synthesis of strategic management in Strategic management in the industry Industries and markets in Entry and exit barriers exist in an industry The nature of the firm The firm's product in Core business, core competencies and distinctive capabilities Innovation in Typologies of firms Strategy Structuring the strategic management process 'I'he decision-making role of the strategist The elements of competitive strategy The marketing function and its contribution to competitive advantage Tools, techniques and methodologies for competitive advantage Construction corporations and contracting corporations Structure, strategy and process - managing the diversified firm Construction strategies Project portfolios and potential capacity Sub-contracting as a production strategy within project Index portfolios Management as a source of competitive advantage Supply chain management in International Conclusions on managing corporations The consultant3 - the professions Implications for professional practices and the building professions by size of firm Conclusions on managing consultancies Conclusions A contingency model of strategic management for

6 Preface 'l'his book is aimed at students, graduates, and practitioners in all fields of the built environmen t. The second edition has been subject to a cmisiderable rrverhaul from the pub- Iicntion nf the first edition in At that time the industry wiis in the midst of a severe recession and corporations were actively considering strategic issues. The professions were starting to emerge as multidisciplinary practices with which clients were encouraged to have 'one stop shop' relations. Since the first edition the world has changed and the context of the second edition is one of an industry with a burgeoning workload and yet with very small profit margins. The time between the editions have provided the industry with new challenges which drive the industry - the Latham and Egan reports have spurred the industry to perform better and these pivotal reports have accelerated the evolution of the industry. As part of this renaissance of the industry, clients became more powerful arid better informed, and more knowledgeable about commissioning, owning and operating their buildings. As a response constructors aid the professions in the industrv haw had to act stratcgically rnthcr than opportunistically. Thcsc changcs haw cngcndcrcd a ncw vocabulary, and partnering, strategic alliances, supply chain management, lean and so on have all been part of the agenda of change. In this volume the authors have sought to explain the strategic importance of these issues by bringing together ideas from the world of economics, marketing, management, politics and business to serve the making of strategy in firms and the associated professions. The authors have attempted to cover a number of important themes in the book. To this end it differentiates strategic management practice appropriate for contractors from profcssional practiccs, and also offcrs insights from thcory aid how this may be applied in practice. in a world shrunk by rapid communic a t. ions organisations haw also mwed into king intprnatiuna1 cirganisations and a npiv cliaptw has been addpd on intwnational strategy. This has been complemented by a chapter on marketing that has demonstrated how marketing can contribute to the strategic planning of organisations. Meeting the challenges given to the industry will require the manager of today and tomorrow to think strategically about the future directions of their organisations. We hope that this book makes a contribution to this thinking. Acknowledgement The authors would like to acknowledge the contribution of many people in the production of this book. In particular the work of Marianne Halforty in producing thc material from the authors', often scribbled, drafts. The work of Polly Dyiic Steel in scrving as our cditor has madc a powcrful impact upon thc prcscntation and layout of the book. For their efforts and others we are grateful. The authors are indebted to the project team on the Glasgow Science Centre, in particular Carillion, for allowing the use of the photograph in the cover of the book.