Linking response strategies adopted by construction firms during the 2007 economic recession to Porter’s generic strategies

Paul Tansey, John P. Spillane, Xianhai Meng

    Research output: Contribution to journalSpecial issue

    25 Citations (Scopus)
    9 Downloads (Pure)

    Abstract

    The time period bridging the years 2007 to 2012 will be remembered as one characterised by dramatic changes in the Irish and UK construction industries. Construction companies witnessed unprecedented changes in the environment, namely the coincidence of a sharp economic downturn, the significant decline of public works, a reduction in lending, increased competition, and structural changes in the marketplace. Nevertheless, little has been documented on what response strategies construction companies adopt as a result of an economic recession. Based on four exploratory case studies, a taxonomy framework of the response strategies adopted by Irish and UK construction companies during the 2007 economic recession was developed relative to Porter’s (1980) generic strategies of cost leadership, differentiation, and focus. Porter’s model (1980) is a well known theoretical framework among business strategists and industrial economists worldwide. The analysis provides strong support for the adoption of cost leadership strategies as a means to surviving the 2007 economic recession. The case studies further suggest that cost control initiatives are one of the most important attributes in companies’ responses to the 2007 recession. The findings provide valuable assistance for construction contractors in developing effective strategies and thus reducing business failures during recessionary periods.
    Original languageEnglish
    Pages (from-to)705-724
    Number of pages20
    JournalConstruction Management Economics
    Volume32
    Issue number7-8
    Early online date24 Jul 2014
    DOIs
    Publication statusPublished - 2014

    Keywords

    • case study
    • generic competitive strategies
    • recession
    • response strategies
    • strategic management

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