A Study On The Transformation Strategy Of Traditional Construction Enterprises In Taiwan

The building industry, one of the largest industries in the world, includes all sectors involved in the activities pertaining to a building life cycle, namely construction, property development, real estate, engineering services and consultation.The market for building industry in Taiwan can be divided into two distinct segments, public sector work and private sector work. Regardless of the segment difference, the distribution of added values along different stages of the industry value chain has drastically changed during recent years. A typical construction company with traditional business practices has to change its existing, low value-added position toward an area of higher value creation. However, such transformation would require the company to assume strong commitment for change:from strategy, organization to people.To tackle such a complex issue, the present study undertakes an exploratory approach based on a case study on FC company, an established traditional construction company in Taiwan. Various strategy analysis tools are applied to help formulate suggestions for strategy. Specifically, competitive dynamics framework and diamond model of strategy are adopted in this study. First, the industry structure was crystalized in order to capture the environmental trend. Then, an indepth review was made on the case company regarding the trajectory of company growth and limitation to future growth. Guided by the diamond model of strategy, two distinctive strategies were suggested to the case company, namely A-strategy and B-strategy. A-strategy aims at expanding value added activities along the industry value chain, while B-strategy focuses on enhancing the service value of construction. By considering the constraint of the case company, final recommendations was made for a staging approach by taking B-strategy first and gradually move toward A-strategy. With this mixed strategy, a blueprint is further outlined for organizational change which could ensure the success of transformation.