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Business Models and Performance of International Construction Companies

Author

Listed:
  • Youjin Jang

    (School of Civil and Environmental Engineering, Georgia Institute of Technology, Atlanta, GA 30332-0355, USA)

  • Yonghan Ahn

    (School of Architectural Engineering, Hanyang University, Ansan 15588, Korea)

  • Moonseo Park

    (Department of Architecture and Architectural Engineering, Seoul National University, Seoul 08826, Korea)

  • Hyun-Soo Lee

    (Department of Architecture and Architectural Engineering, Seoul National University, Seoul 08826, Korea)

  • Nahyun Kwon

    (School of Architectural Engineering, Hanyang University, Ansan 15588, Korea)

Abstract

As the construction business environment becomes ever more competitive and intense, business models are receiving considerable attention as potential sources of sustainable survival and growth. In order to design sustainable business models in today’s global construction market, it is important to understand the business models that would make a construction company achieve higher performance in terms of profitability, growth and market competitiveness. Therefore, this study identifies the business model variables of international construction and statistically analyzes the relationship between business model variables and firm performance guiding 72 international construction companies over a six-year period from 2009 to 2014. We examine the effect of business model variables on firm performance and how different business model variables can lead to different outcomes. The results show that business models play significant roles in determining the performance of international construction companies, with financial resources being a major determinant of profitability and regional diversification a major determinant of revenue growth and market competitiveness. Each business model variable had a different effect on profitability, growth and market competitiveness. This confirms that there are ideal combinations of business model variables that can help firms achieve higher performance. These findings are expected to provide useful guidance to assist executives’ decision making when designing a business model that will enable their firm to thrive in the global marketplace.

Suggested Citation

  • Youjin Jang & Yonghan Ahn & Moonseo Park & Hyun-Soo Lee & Nahyun Kwon, 2019. "Business Models and Performance of International Construction Companies," Sustainability, MDPI, vol. 11(9), pages 1-16, May.
    • Handle: RePEc:gam:jsusta:v:11:y:2019:i:9:p:2575-:d:228195
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    References listed on IDEAS

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    Cited by:

    1. Priyadarshini Das & Amer A. Hijazi & Duncan W. Maxwell & Robert C. Moehler, 2023. "Can Business Models Facilitate Strategic Transformation in Construction Firms? A Systematic Review and Research Agenda," Sustainability, MDPI, vol. 15(17), pages 1-20, August.
    2. Ionel-Sorinel Vasilca & Madlena Nen & Oana Chivu & Valentin Radu & Cezar-Petre Simion & Nicolae Marinescu, 2021. "The Management of Environmental Resources in the Construction Sector: An Empirical Model," Energies, MDPI, vol. 14(9), pages 1-19, April.

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