An empirical analysis of construction organisations’ competitive strategies and performance

Abstract

Purpose – The essence of strategy formulation is to assist an organisation obtain a strategic fit with its environment and help enhance organisational continuous improvement in achieving performance excellence. The purpose of this paper is to investigate the type of competitive strategies used by construction organisations in attaining their strategic goals in South Africa. Design/methodology/approach – The study employs an inductive research approach using a well-structured questionnaire to elicit information from large construction organisations based in South Africa. Findings – The research identifies five strategic attributes that could assist organisations to grow their businesses and enhance their returns. It reveals that all Porters’ generic competitive strategies are significantly related to organisational financial performance measures except focus strategy. The research found that three generic competitive strategies are positively related to non-financial performance and that differentiation and cost-leadership strategies are capable of assisting organisations’ achieve their financial performance goals. Practical implications – The study results will be of immense benefit to chief executive officers as well as managers of construction organisations in growing their businesses and enhancing their corporate performance. Originality/value – The paper contributes both theoretically and empirically to the current discussion and findings on competitive strategy and its relationship with organisational performance. The results presented in the paper have important implications for the implementation of competitive strategies in construction companies and future studies in the area of strategic management.

Entrepreneurial orientation and generic competitive strategies for emerging SMEs: Financial and nonfinancial performance perspective

“…There is a debate between the two schools of thoughts: one gives value to pursuing DS while the other favors CLS. For example, some studies argue that only DS improves firms' performance directly (Teti et al, 2014; Yuliansyah et al, 2016) while other studies suggest the importance for CLS (Oyewobi, Windapo, & James, 2015; Allen & Helms, 2006). In fact, both CLS and DS improve SME's performance.…”

“…Moreover, Hitt, Carnes, and Xu (2016) describe that differential strategy of business firms enable them to sort a maintainable competitive position in the turbulent market that is essential for high market performance. SMEs pursuing DS generate higher value over firms pursuing only CLS (Oyewobi et al, 2015; Teti et al, 2014). So we hypothesize:Hypothesis Differentiation strategy is positively related to financial performance of Emerging SMEs . Hypothesis Differentiation strategy is positively related to nonfinancial performance of Emerging SMEs .…”

“…CLS is not only beneficial for large corporations but also provides the same benefits to SMEs if they can take the advantage by minimizing cost and economies of scale (Porter, 1980). It helps firms to enhance and improve their financial success (Oyewobi et al, 2015). Similarly, it has been confirmed that CLS has significant influence on SMEs' overall performance (Olson & Slater, 2002).…”

Enterprise Risk Management Practices and Firm Performance, the Mediating Role of Competitive Advantage and the Moderating Role of Financial Literacy

“…For instance, Chinese firms often tend to follow cost-based competitive strategies instead of a differentiating-based strategy which may require high financial capabilities and resources (Parnell et al 2015). Both strategies of Porter-cost leadership and differentiation-based-have a significant influence on the financial and non-financial performance of SMEs (Oyewobi et al 2015). Empirical evidence indicated that competitive strategy has a significant influence on firm performance González-Rodríguez et al 2018;Lechner and Gudmundsson 2014).…”

Analyzing the differentiation strategies of big companies competing with each other

“…It is clear that each company has its particularities and therefore there would not be two equal strategies since each company has different objectives, available resources, capabilities, different areas and scope (Arli, Rundle-Thiele & Lasmono, 2015;Oyewobi, Windapo & James, 2015). However, the companies that have similar strategies share similar products and have a similar story, but they also compete to develop new resources and capabilities.…”