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Building industry, economic theory, diversification, flexibility, surviving strategy The market place is continually changing. The construction markets are particularly volatile, making planning to move to new construction markets not only more difficult but also more necessary. There is a need to know about the correct combination of company strength and market analysis of potential markets for a company to survive and keep up with its competitors. The objectives of this paper are (1) to investigate the effect of the environment (both internal and external) and complexity of projects on the output of construction organisations when planning a move to a new market; and (2) to identify factors that affect the ability of contractors to use diversification as a strategy. The specific aim of the study is to develop a business strategy to assist construction firms to survive by diversifying into new market/s. The empirical support is derived from a survey of 108 building companies within Sydney, Australia. The results suggest that by strategically matching the firm’s resources, environment and its competitors, the mobility of construction firms from one market to another is enhanced. What makes the subject of movement so important now is that in construction, current workloads do not guarantee future workloads due to fluctuating demands. The construction firm, be it in a developed country or a developing country, will have to live, if necessary learn to live, with fluctuating demand for its services. By being able to respond flexibly it is possible to achieve and maintain a balanced profitable market mix, by keeping in step with changes in the market

Year: 2011
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