The Modern UK Housebuilding Industry: Diversification or Specialisation?

This paper aims at understanding the restructuring process of the modern UK housebuilding industry and at investigating how the business strategies and the concurrent production structure influence business efficiency and the growth of firms. The targeted objectives for addressing the above aim are three fold; to identify the prominent types of business strategy of UK housebuilding firms - diversification or specialisation; to evaluate whether the production structure of the UK housebuilding firms as an outcome of their business strategy is economically efficient; and to investigate the relationship of the production structure to the building firms' performance (growth). To achieve these objectives, primary and secondary data will be collected for the largest 100 housebuilding firms based on output volume. Market concentration and size structure will be examined. All types of businesses that the housebuilding firms are involved in each year will be surveyed and classified according to the UK Standard Industry Classification (SIC). This paper reports on early results based on the information collected. The extent of diversity or speciality of the housebuilding firms will be examined. Statistical modelling analyses will be used to analyse whether the current production structure of the UK housebuilding firms is cost efficient. Based on this model, the optimal scale and scope of the housebuilding firms, in response to the changing market might also be derived. These analyses will give the future direction of the housebuilding firms' business strategy.