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Niche comparisons: toward a new approach for analysing competition and organizational performance in the international construction market

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  • Huan Yang
  • Weisheng Lu

Abstract

Over the past few decades, studies on competition and organizational performance in the international construction market have been prolific. Construction companies are founded, then grow, compete, evolve, and die in the international landscape, a common process from an ecological perspective. However, few studies have considered the international construction market from this perspective. Using niche theory, which was initially populated in the field of natural bio-ecology and then introduced to business management and economics, a NW/O-L (niche width/overlap and location) framework is established in this study. With this framework, the niche evolution of the top 225 international contractors is explored along two dimensions—product and geography. The effects of a proper niche on an international construction company’s performance are also investigated using the cluster analysis method. It was discovered that, despite fluctuations over time, the contractor’s niche is highly related to its performance in the international construction market. The most appropriate niche for international construction contractors is a wide niche width, with a small niche overlap and with its location near to the market centre with comparatively more market resources. However, only a few contractors can survive in this niche, as the majority of contractors are in a narrow niche width, with a comparatively large niche overlap and far from the market centre. Contractors which do not fit either of these two niches have proved to be poor performers in this study.

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  • Huan Yang & Weisheng Lu, 2013. "Niche comparisons: toward a new approach for analysing competition and organizational performance in the international construction market," Construction Management and Economics, Taylor & Francis Journals, vol. 31(4), pages 307-321, April.
    • Handle: RePEc:taf:conmgt:v:31:y:2013:i:4:p:307-321
    DOI: 10.1080/01446193.2013.777753
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    1. Masahisa Fujita & Paul Krugman & Anthony J. Venables, 2001. "The Spatial Economy: Cities, Regions, and International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262561476, April.
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