Contractors’ Competition Strategies in Bidding: Hong Kong Study
Publication: Journal of Construction Engineering and Management
Volume 136, Issue 10
Abstract
Selecting an appropriate competition strategy in bidding is the ambition of most contractors. The multiple requirements of clients encourage contractors to consider other strategies to deliver additional benefits besides offering a low-price bid. Offering low bids will reduce contractors’ profits and potentially make development less attractive. Contractors need to understand their specific resources that generate competitive advantage and accordingly develop strategies to win contracts. This paper reports the findings from a recent survey on competition strategies in the Hong Kong construction industry. Thirteen typical bidding strategies, their used frequency in bidding, and their effectiveness for winning contracts of different types and between different groups of contractors are studied. The analysis of findings is explored to provide local contractors and clients with new insights into competition strategies in bidding.
Get full access to this article
View all available purchase options and get full access to this article.
References
Bourdeau, L. (1999). “Sustainable development and the future of construction: A comparison of visions from various countries.” Build. Res. Inf., 27(6), 354–366.
Chiang, Y.- H., Tang, B.- S., and Leung, W.- Y. (2001). “Market structure of the construction industry in Hong Kong.” Constr. Manage. Econom., 19(7), 675–687.
Construction Industry Review Committee (CIRC). (2001). Construction for excellence: Report of the Construction Industry Review Committee, Construction Industry Review Committee, Hong Kong.
Environment, Transport and Works Bureau (ETWB). (2004). “Tender evaluation of works contracts.” Environment, Transport and Works Bureau Technical Circular (Works) No. 8, Hong Kong.
Fayek, A. (1998). “Competitive bidding strategy model and software system for bid preparation.” J. Constr. Eng. Manage., 124(1), 1–10.
Fine, B. (1975). “Tendering strategy.” Aspects of the economics of construction, D. A. Turin, ed., Godwin, London, 203–221.
Griffis, F. H. (1992). “Bidding strategy: Winning over key competitors.” J. Constr. Eng. Manage., 118(1), 151–165.
Hambrick, D. C. (1984). “Taxonomic approaches to studying strategy: Some conceptual and methodological issues.” J. Manage., 10(1), 27–41.
Han, S. H., Diekmann, J. E., and Ock, J. H. (2005). “Contractor’s risk attitudes in the selection of international construction projects.” J. Constr. Eng. Manage., 131(3), 283–292.
Hasegawa, F. (1988). Built by Japan: Competitive strategies of the Japanese construction industry, John Wiley and Sons, New York.
Hong Kong Construction Association (HKCA). (2007). ⟨http://www.hkca.com.hk/⟩ (February 2007).
Ioannou, P. G., and Leu, S. S. (1993). “Average-bid method-competitive bidding strategy.” J. Constr. Eng. Manage., 119(1), 131–147.
Langford, D. A., and Male, S. (2001). Strategic management in construction, 2nd Ed., Blackwell Science, London.
Lim, E. C., and Liu, Y. (2001). “International construction joint venture (ICJV) as a market penetration strategy: Some case studies in developing countries.” Proc., 3rd Int. Conf. on Construction Project Management, Nanyang Technological University, Singapore, 377–389.
Liu, S. L., Wang, S. Y., and Lai, K. K. (2005). “A general multivariate analysis approach for determining bid mark-up strategy.” Constr. Manage. Econom., 23(4), 347–353.
Miles, R. E., and Snow, C. C. (1978). Organizational strategy, structure and process, McGraw-Hill, New York.
Owen, F., and Jones, R. (1994). Statistics, Pitman, London.
Pearce, J. A., and Robinson, R. B. (2003). Formulation, implementation, and control of competitive strategy, 8th Ed., McGraw-Hill/Irwin, New York.
Porter, M. E. (1980). Competitive strategy: Techniques for analyzing industries and competitors, The Free Press, New York.
Seaden, G., Guolla, M., Doutriaux, J., and Nash, J. (2003). “Strategic decision and innovation in construction firms.” Constr. Manage. Econom., 21(6), 603–612.
Shen, L. Y., Drew, D. S., and Zhang, Z. H. (1999). “Optimal bid model for price-time biparameter construction contracts.” J. Constr. Eng. Manage., 125(3), 204–209.
Skitmore, M., and Pemberton, J. (1994). “A multivariate approach to construction contract bidding mark-up strategies.” J. Oper. Res. Soc., 45(11), 1263–1272.
Stone, P. A. (1983). Building economy: Design, production and organisation—A synoptic view, Pergamon Press, Oxford.
Tan, Y. T., Shen, L. Y., Lu, W. S., and Shen, Q. P. (2008). “Multiple-objective bidding strategy using goal programming technique.” Manage. Decis., 46(4), 656–672.
Vesper, V. D. (1979). “Strategic mapping: A tool for corporate planners.” Long Range Plann., 12(6), 75–92.
Warszawski, A. (1996). “Strategic planning in construction companies.” J. Constr. Eng. Manage., 122(2), 133–140.
Information & Authors
Information
Published In
Journal of Construction Engineering and Management
Volume 136 • Issue 10 • October 2010
Pages: 1069 - 1077
Copyright
© 2010 ASCE.
History
Received: Aug 26, 2008
Accepted: Mar 16, 2010
Published online: Mar 18, 2010
Published in print: Oct 2010
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.