Strengths, Weaknesses, Opportunities, and Threats: Case Study of Consulting Firms in Shenzhen, China
Publication: Journal of Construction Engineering and Management
Volume 135, Issue 7
Abstract
After China became a member of the World Trade Organization, Chinese architectural, engineering, and project management consulting firms faced competition from not only their domestic competitors but also from foreign firms. As most Chinese consulting firms are used to operating under a protected setting, they may face difficulties competing in the globalized environment. This research involves a strengths, weaknesses, opportunities, and threats (SWOT) analysis of Chinese consulting firms based in Shenzhen; investigates how they respond to opportunities and threats; and recommends how foreign firms can respond to Chinese consulting firms’ SWOT. The case study research design is adopted. Using semistructured interview questions, face-to-face interviews were conducted with 23 Chinese consulting firms based in Shenzhen. Foreign firms’ responses are investigated through a case study of a U.S.-based consulting firm operating in China. The SWOT analysis reveals that Chinese consulting firms are lagging behind foreign firms in design and technical capability; experience in international projects; general and project management ability; and financial capacity. Industry practitioners from outside China who are contemplating entering the Chinese market can leverage on Chinese firms’ strengths by forming joint ventures with them. Foreign industry practitioners can take advantage of Chinese firms’ weaknesses by offering superior products and services which would improve their competitive advantage.
Get full access to this article
View all available purchase options and get full access to this article.
Acknowledgments
Ms. Shallene S. Y. Lim’s assistance in collecting data for the case study of the U.S. headquartered firm is acknowledged with thanks.
References
Badger, W. W., and Mulligan, D. E. (1995). “Rationale and benefits associated with international alliances.” J. Constr. Eng. Manage., 121(1), 100–111.
Bon, R., and Crosthwaite, D. (2000). The future of international construction, Telford, London.
China Economic Information Network (CEI). (2006). Chinese construction becomes global force, Beijing, ⟨http://www1.cei.gov.cn/ce/doc/cenn/200612291568.htm⟩ (Jan. 13, 2007).
Coase, R. H. (1937). “The nature of the firm.” Economica, 4, 386–405.
Datamonitor (2006). “China construction bank.” ⟨www.datamonitor.com⟩ (Sept. 1, 2007).
Dunning, J. H. (1988). “The eclectic paradigm of international production: A restatement and some possible extensions.” J. Int. Business Stud., 19(1), 1–31.
El-Tayeh, A., and Gil, N. (2007). “Using digital socialization to support geographically dispersed AEC project teams.” J. Constr. Eng. Manage., 133(6), 462–473.
Fong, P. S. W., and Lung, B. W. C. (2007). “Interorganizational teamwork in the construction industry.” J. Constr. Eng. Manage., 133(2), 157–168.
Gunhan, S., and Arditi, D. (2005). “Factors affecting international construction.” J. Constr. Eng. Manage., 131(3), 273–282.
Helms, M. M. (1999). “How to be successful in China: A SWOT analysis.” Compet. Revi., 9(2), 1–10.
Hennart, J. F. (1991). “The transaction costs theory of joint ventures: An empirical study of Japanese subsidiaries in the United States.” Manage. Sci., 37(4), 483–497.
Kasma, D. R. (1987). “Consultant selection.” J. Manage. Eng., 3(4), 288–296.
Kotler, P., and Keller, K. L. (2006). Marketing management, 12th Ed., Pearson-Prentice-Hall, Upper Saddle River, N.J.
Lan, P., and Jackson, J. T. (2001). “Current characteristics of the main stakeholders in Chinese construction industry.” Int. J. Constr. Mark., 1(1), 1–18.
Langford, D., and Male, S. (2001). Strategic management in construction, 2nd Ed., Blackwell Science, Oxford, U.K.
Ling, F. Y. Y., Ibbs, C. W., and Cuervo, J. C. (2005a). “Entry and business strategies used by international architectural, engineering and construction firms in China.” Constr. Manage. Econom., 23(5), 509–520.
Ling, F. Y. Y., Ibbs, C. W., and Hoo, W. Y. (2006). “Determinants of international architectural, engineering and construction firms’ project success in China.” J. Constr. Eng. Manage., 132(2), 206–214.
Ling, F. Y. Y., Ibbs, C. W., and Kumaraswamy, M. M. (2005b). “Enablers that help foreign architectural, engineering and construction firms win construction contracts in China.” J. Manage. Eng., 21(2), 63–69.
Low, S. P., and Jiang, H. (2004). “Estimation of international construction performance: analysis at the country level.” Constr. Manage. Econom., 22(3), 277–289.
Low, S. P., and Jiang, H. (2006) “Analysing ownership, locational and internalization advantages of Chinese construction MNCs using rough sets analysis.” Constr. Manage. Econom., 24(11), 1149–1165.
Low, S. P., Jiang, H., and Leong, C. H. Y. (2004). “A comparative study of top British and Chinese international contractors in the global market.” Constr. Manage. Econom., 22(7), 717–731.
Male, S. (1991). “Competitive advantage in the international construction industry.” Competitive advantage in construction, S. Male, and R. Stocks, eds., Butterworth Heinemann, Oxford, U.K., 299–335.
Maloney, W. F. (1997). “Strategic planning for human resource management in construction.” J. Manage. Eng., 13(3), 49–56.
Ministry of Commence (MOFCOM). (2007). “Foreign direct investment in China reached No. 4 worldwide in 2006.” ⟨http://english.mofcom.gov.cn/aarticle/newsrelease/significantnews/200701/20070104311875.html⟩ (Feb. 9, 2007).
Ministry of Construction (MOC). (2007). Decree 114 implementing regulations, Beijing.
Oster, S. M. (1999). Modern competitive analysis, 3rd Ed., Oxford University Press, Oxford, U.K.
Pearce, P. (1992). Construction marketing—A professional approach, Telford, London.
Porter, M. E. (1980). Competitive strategy: Techniques for analyzing industries and competitors, Free Press, Boston.
Porter, M. E. (1999). On competition, Harvard Business School Press, Boston.
Seymour, H. (1987). The multinational construction industry, Croom Helm, New York.
Shen, L. Y., Zhao, Z. Y., and Drew, D. S. (2006). “Strengths, weaknesses, opportunities, and threats for foreign-invested construction enterprises: A China study.” J. Constr. Eng. Manage., 132(9), 966–975.
Sornarajah, M. (1992). Law of international joint ventures, Longman, Singapore.
Vogt, W. P. (1999). Dictionary of statistics and methodology: A nontechnical guide for the social sciences, Sage, London.
World Trade Organization (WTO). (2005). “Understanding the WTO.” ⟨http://www.wto.org/english/thewto_e/whatis_e/tif_e/understanding_e.pdf⟩ (Jan. 13, 2007).
Wright, P., Szeto, W. F., and Cheng, L. T. W. (2002). “Guanxi and professional conduct in China: A management development perspective.” Int. J. Human Resour. Manage, 13(1), 156–182.
Xu, T., Bower, D. A., and Smith, N. J. (2005). “Types of collaboration between foreign contractors and their Chinese partners.” Int. J. Proj. Manage., 23(1), 45–53.
Yin, R. K. (2003). Case study research: Design and methods, 3rd Ed., Sage, Thousand Oaks, Calif.
Yoshino, M. Y., and Rangan, U. S. (1995). Strategic alliances: An entrepreneurial approach to globalisation, Harvard Business School Press, Boston.
Information & Authors
Information
Published In
Copyright
© 2009 ASCE.
History
Received: Feb 11, 2008
Accepted: Dec 22, 2008
Published online: Apr 30, 2009
Published in print: Jul 2009
Authors
Metrics & Citations
Metrics
Citations
Download citation
If you have the appropriate software installed, you can download article citation data to the citation manager of your choice. Simply select your manager software from the list below and click Download.