Can Business Models Facilitate Strategic Transformation in Construction Firms? A Systematic Review and Research Agenda

Abstract

A business model represents an organisation’s value logic with a value proposition as the central dimension. The construction industry has been categorised as fragmented, slow to move and destructively competitive, idealising only cost-based perceptions of performance; however, recent trends indicate a paradigm shift in the sector emphasising value-based perspectives such as early engagement, design for manufacture and assembly, and a lifecycle approach by promoting a conscious discourse on business model innovation. This paper presents a systematic review and integration of research on business models in the construction industry. The findings illuminate the potential of business models as creative tools for strategy formulation, the importance of strategic partnerships in novel business models, and the bridging role that business models play between technology integration and strategy formulation. Based on the findings, the paper proposes future research directions, including understanding how managers can steer conflicts towards cooperative competition (coopetition), exploring various pathways (leaping and drifting) for business model innovation and project-based business model innovation. The paper establishes that using a business model approach to facilitate strategic transformation can help construction firms resolve some of the most pressing challenges, such as customer dissatisfaction, fragmentation, and slow technology uptake.