Document Detail

Title: RS30-1 - Competing in the Global Market
Publication Date: 11/1/1993
Product Type: Research Summary
Status: Archived Tool
Pages: 54
This publication has been archived, but is available for download for informational purposes only.

Emphasizes the needs of global customers and successful international alliances as key elements to international competitiveness for U.S. engineering and construction firms.
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Abstract

From 1971 to 1985 the U.S. engineering/construction (E/C) industry lost approximately half its international market share. Although recent trends show some recovery, global competition continues to grow and strengthen. A greater emphasis on global thinking by U.S. firms will be required for sustained competitiveness and growth in the international construction arena.

Considering the slow-growth economic forecast for the U.S. construction industry, U.S. firms cannot afford to ignore opportunities in other countries. Development of strategies and technologies that respond to current and future customer needs will make both, the owner companies and the E/C firms, more competitive in the international marketplace. It is imperative for U.S. firms to plan for the future, which often will include the formation of international alliances. Awareness of the needs of global customers and an understanding of the key elements determining the success of international alliances are the subjects of this publication.

Customer Needs

E/C customers are keenly aware that there is an ever-changing global marketplace and that sharp and growing international competition exists in every business field. Sustained competitiveness in an increasingly diverse and demanding world is the fundamental concern of every corporation, irrespective of its nationality. Discussions with the world’s top companies surfaced hundreds of future directions and concerns. The importance of visionary leadership is the most consistently recurring theme. Sensitivity to environmental issues permeates all considerations, and sustainable development is a worldwide subject in search of specific answers. Integrated project leadership and implementation teams, technological innovation and greater cost effectiveness are insistent demands that will affect the E/C industry. The often contradictory needs were grouped into a “hierarchy” that allows assessing their impact and developing responses.

Alliances

The level and intensity of competition is growing dramatically throughout the world, raising the standard for competitive success. The interviews with international companies suggested a need for new approaches to international business relationships. One of the most promising strategies is the teaming and long-term relationship with foreign companies. Through such alliances, both owners and E/C firms can address many of the identified needs and meet future competitive challenges.

For many years, companies in Europe and the Asian Pacific Rim have practiced a spirit of cooperation and teamwork among competitive construction firms and with their governments. The number of alliances between American, Asian, and European firms (in all industries) grew thirty-fold during the previous decade. This trend will likely continue well into the twenty-first century.

Alliances are formed for many reasons. The analysis of the most prevalent benefits yielded a “hierarchical” relationship similar to the one for customer needs, allowing cross-matching with many future client expectations. Through a comparative study of how alliances operate in Asia, Europe and the U.S., the task force developed an Alliance Implementation Model that assembles the key elements of success.