Improving the competitive advantages of construction firms in developed countries

Abstract

As globalisation continues to dissolve the boundaries across the world, the significance of pursuing competitive advantages in construction is becoming more apparent. This paper applies Porter's diamond framework to identify endogenous sources of competitive advantages of construction enterprises, based on an extensive qualitative research approach. The attributes pertinent to the competitiveness of the Hong Kong construction enterprises include talented professional resources, accumulated experience from home demand especially in designing and constructing high-rise buildings, and the pressure from both local and global rivalry. Design expertise and managerial ability have made Hong Kong one of the regional leaders. Despite that, the technical ability, lack of incentives to invest in innovation/research and development as well as limited support by government were the impediments to further sharpen the industry's competitiveness. The analysis contributes to the debates in relevant literature on the application of the ‘diamond’ framework for sustainable growth of the construction industry. Although this study focuses on the Hong Kong construction market, the methodology and recommended development strategies can be applied to enhance the competitiveness of other sectors in other developed countries such as the UK and USA.