The ABCs of Strategic Market Choices

Strategic Market Choices for where a contractor chooses to play must be balanced between diverse enough, large enough, and focused enough. These are the highest-leveraged decisions that leaders of construction businesses make.

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There are multiple levels of strategic decisions that are required by a contractor. Decisions related to market strategy must balance out:

  1. Diversified enough for stability in all economic conditions. One example could be choosing a balance between manufacturing work that drives need for housing that drives need for commercial building and public works infrastructure. Another example could be choosing a single market sector like housing and diversifying geographically to balance out cycles. 
  2. Large enough relative to the current company size for sustained growth over a 10+ year timeframe. This is where strategies start to change as a contractor navigates different stages of growth. Ideally, the market itself will be growing at least as fast as you want to grow as a business, and you can continue to increase your share of that market. This allows you to make a lot of good decisions along the way including opportunity evaluation and selection
  3. Focused enough to develop economies of scale in systems, people, and reputation. Where you start to see performance at 2-3X industry benchmarks is either in contractors that are in the early stages of growth (1-2) where decision rights are concentrated or those in the later stages (5-6+) that have figured out how to scale all aspects of the Contractor Business Model for functional area efficiencies while mastering the hand-off process for overall system effectiveness.

A contractor will see these market decisions come to life starting with the customer and project opportunities they choose to pursue

Learn more about making these strategic decisions:

  1. Markets (Benchmarks, Trends, Forecasts, and Predictions)
  2. Five Interlinked Questions to Define Your Strategy
  3. 6 Phases of the Strategy and Planning Process
  4. Levels of Strategic Decisions (The Basics)
  5. 4 Different Strategic Planning Objectives
  6. Headcount, Stages of Contractor Growth, and Growth Inflection Points
  7. Strategic Market Experiments


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