A study of national competitive advantage in construction: the European construction industry

Abstract

The international construction industry is highly competitive with competition expected to further intensify. However, the market remains essentially heterogeneous with contractors able to express aspects of competitive advantage. This research is concerned with the nature and application of competitive advantage. Relevant theories are reviewed in order to examine and explain the general international market. From these theories, a suitable method was adopted to accommodate the attributes of international construction and to explain 'how, why, where and when' internationalisation was viable. This is the Porter model of national competitive advantage, adapted to accentuate the consideration of locations. Through research involving major construction contractors from the UK and two competitor nations; France and Germany, each nation's 'national diamond' profile of competitive advantage was formed. This model was then applied to specific, economically distinguished, locations; Portugal, Spain and Italy, to examine the various characteristics of relative competitive internationalisation. The combination of theoretical prediction and practical research revealed numerous elements of national competitive differentiation. These influence internationalisation, focussing consideration within a progressive framework of 'how and why, where and when'. The research shows that relative competitive advantage enhances the area of viable internationalisation, through allowing competition to be undertaken within more economically mature nations. Further, this framework will also direct contractors to key areas for improvement in their relative competitive profile.