Effects of Competitive and Growth Strategy Type on Financial Strategies in Construction Companies

The rapid and continuous transformation as an outcome of the information economy has also brought along major innovations for construction companies and it has rapidly changed the industrial structure, environment and modes of operation of the construction business, which dates back to old times. Changing environmental conditions have also led to a highly comprehensive transformation process for the strategies of the companies which assume roles at different levels of the construction process (Haan et al. 2010). Under these new and competitive market conditions, construction companies are expected to have pre-designed and planned growth and financial strategies. Taking into consideration multiple aspects of the strategies in interaction will ensure choosing effective strategies. In this context, this study aims to identify the effects of two factors - growth and competitive strategies- on a set of financial strategies. A questionnaire survey was conducted to gather data from construction professionals, who were asked to rate the importance level of predicted financial strategies on predicted competitive and growth strategy combinations. Multiple analysis of variance (MANOVA) was employed to see the main and interactive effects of competitive and growth strategies on major financial strategies. MANOVA allows us to see the combination of which competitive and growth strategy types would make the biggest difference for financial strategy. The results indicate that competitive strategies such as cost leadership and differentiation have a greater effect on financial strategies than growth strategies such as penetrating into a new market or new project types. However, the joint interaction effect of competitive and growth strategies have been found to be much influential than the effect of competitive strategies alone.