This report focuses on the South East Queensland residential construction industry and investigates the strategic, structural and innovative activities of four building companies. An objective of the report is to research the apparent diversity within these companies (A.V. Jennings, Devine, Long Homes and Villa World) and document the findings. The final selection of the above companies has been based wholly on the availability and access to corporate information. A feature of these four companies is that they are all currently listed on the Australian Stock Exchange as public companies.
The format adopted throughout this research is divided into two distinct sections. The first section is a critical review of the literature which draws upon, where possible, a variety of theoretical perspectives. A net result of this phase is the three possibilities for strategy structure - innovation useful to residential construction companies.
The first stage of the research commences with an introduction and review of the current literature. This section specifically focuses on obtaining up-to-date research on the four areas of hypothesis testing. The review essentially covers the areas of strategy and structure, vertical integration, innovation and the use of finance for competitive advantage.
Following this review, the second section addresses four hypotheses. This investigation reveals that a vertically integrated structure is most appropriate for companies participating in the first home buyers market where economies of scale are necessary for competitiveness. The success of each firm's strategy and structure is measured in terms of its recent financial performance. From this research, Villa World has outperformed its other competitors. A part reason for this result is the poor performance in financial terms by the market leader.
The companies which have the greatest organisational resources do not outperform those which have a smallest capital base. This finding contradicts some literature which suggests that the smaller, less bureaucratic firms, have greater tendencies and successes in respect of innovation or financial results. Larger companies were thought to exhibit advantages in process innovations.
Finally, the availability of capital (k) at lower rates than competitors does appear to enhance competitive advantage. From the results, publicly listed, residential housing contractors are perceived as lower risk and proven performers.
The report concludes by highlighting the findings and major conclusions of the research and briefly addresses the areas for future research.