Developing World Class Firms with Strong Export Capability: Learning from Successful USA Design and Construction Firm

Principal Investigator: Dr Florence Ling
Email: bdglyy@nus.edu.sg
Website: http://www.bdg.nus.edu.sg/research/Export%20Capability_03-002_.pdf

This research project investigated the export strategies adopted by architectural, engineering and construction (AEC) firms when undertaking international projects. The objectives of the study were to determine the strategies adopted by Singapore firms and USA firms to export design and construction services. Seventy sets of data on international projects were collected using face-to-face interviews and a mass mailing approach. Some project data are shown in Figures 1 and 2. Figure 3 presents the deliverables of this project. It shows the most effective market entry modes and the most frequently used modes.

The project identified the efficient market entry modes into overseas construction industries. The findings show that to enter a new overseas market, foreign firms set up wholly-owned subsidiaries in the form of a branch office and/or a subsidiary firm. USA firms adopt another strategy more frequently and with a higher chance of success, and that is to form joint ventures with firms in the host country. This research also identified the business strategies to be adopted when managing and executing overseas projects. Some of the strategies to become world class firms include forming more joint ventures with firms in the host country to undertake construction projects together; employing citizens from the host country to manage the project; and undertake more R&D and structured studies of the market and the project.

The significance of the study is that strategies for Singapore firms to adopt to undertake projects overseas are recommended. These strategies may help Singapore firms export design and construction services overseas successfully.

Figure 1: Distribution of projects by location.

Figure 2: Distribution of projects by type.

Figure 3: Market entry strategies that contribute significantly to project success.

Legend:
Dark continuous line shows the effectiveness in contributing to project success.
Broken line shows the frequency of usage. (Not to scale)

E1    Set up a branch office in host country
E2    Set up a subsidiary firm in host country
E3    Merged with, acquired, or bought a portion of, a firm in host country
E4    Set up new firm by joint venturing (JV) with firm in host country
E5    Set up new firm by JV with firm in home country
E6    Set up new firm by JV with international firm
E7    Set up project JV with firm in host country
E8    Set up project JV with firm in home country
E9    Set up project JV with an international firm outside home and host countries
E10  Formed alliance with financial institutions
E11  Formed alliance with client in home country who invested in host country
E12  Formed alliance with project client in host country
E13  Formed alliance with foreign client who invested in host country
E14  Adopted partnering