Bidding with Competitive Strategy Models

This work presents a bidding procedure based on competitive strategy theory. A study comparing the bids yielded by several competitive strategy models with those of actual lettings for 50 projects is made using data supplied by a building contractor. The study is made the data in sized sets in the chronological order that they became available to the contractor. Bids yielded by the sized data-sets in each model are compared to the low and second low actual bids and evaluated in terms of the anticipated profit and dollar volume of work which they would yield. These results are used to define the range in which the low bid in an actual letting will most likely fall wherein the lower bound is yielded by one competitive strategy model with a particular sized data set and the upper bound by another with another sized data set. The contractor uses his practical experience to select a value in this range as his bid. The ranges for projects 51 through 54 bid by the contractor are obtained, the bids selected and compared with the actual lettings. Conclusions on the bidding procedure resulting from this application are presented.