Factors influencing Malaysian construction firms in venturing into international market

Abstract

A tremendous demand of development worldwide has gained interest of Malaysian construction firms to venture into international construction domain. Identifying and analyzing major determinants of the firm's internal and external factors are crucial in order to ease the complexity in global market expansion. This paper identifies the relative importance of the strengths, weaknesses, opportunities and threats (SWOT's) related to the internationalization of Malaysian contractors. Responses were received from thirty one (31) Class A and Grade 7 Malaysian construction firms registered with CIDB Malaysia in 2010. The findings reveal that “good track record”, “specialist expertise” and “international network” were the most influential strength factors for the firms to effectively compete in international market. However, “shortage of financial resources” as well as “material and labor resources” contributed to the weaknesses in exploring international market. The study also reveals that “opening up new market”, “technological advancement” and “beneficiary international agreements” offered huge opportunities in overseas market. Nevertheless, factors such as “bribery in the host country”, “increase of interest rate” and “lack of awareness” were perceived as the threats due to difficulties in dealing with moral problems, financial risks and unfamiliar environment within the host country. Finally, this study is of relevance to Malaysian construction firms as it systematically highlights the internal and external factors those may affect their performance in international market. These findings may assist them to make necessary preparatory works by enhancing the strengths, reducing the weaknesses, seizing the opportunities and facing the threats in international market, as these elements are consistently changing.