Selecting Long-Term Strategies for Construction Firms

Abstract

A methodology to analyze construction firms' long-term strategies is described. This methodology provides a systematic approach to study and analyze external and internal scenarios for a construction firm doing strategic planning. A conceptual model that is a simplified model of the variables and interactions present in the analysis of strategic decisions in the construction industry is built. An analytical model designed to predict the impact of strategic decisions supports the analysis process by integrating expert knowledge and assessments of the strategic planning team into a mathematical model. This model uses concepts of cross-impact analysis and probabilistic inference to capture risks and uncertainties present in the strategic scenarios. Strategies for long-term company development such as marketing programs to emergent markets, systems to implement total quality, etc., can be evaluated using criteria selected by company management. The model allows management to test different combinations of company long-term strategies and predict expected sales, market share, or other measures of company performance. The case of a Chilean construction company is used to illustrate the methodology.