Effect of the internal environment and project-related determinants on business strategy of small and medium construction enterprises in Nigeria.

The construction business environment is characterized by high levels of competition and dynamism. This is especially challenging to small and medium construction enterprises (SMCEs) in terms of the formation of strategies that enhance performance. These strategies are products of the environment under which the SMCEs operate. This study, therefore, investigates the effect of the selected internal environment and project-related determinants on the business strategies of SMCEs with a view to promoting the adoption of appropriate strategies for improved competitiveness. Lagos, which has the highest concentration of construction firms was selected as the study area. A sample of 80 construction firms in the SME category, selected randomly from the population of construction firms operating in Lagos was used. Data collection was by structured questionnaires. 70 questionnaires were returned but only 50 was found usable. Thirty-four determinants of business strategy from previous studies were identified and categorized into seven groups namely: Owner, Firm, Technical, Financial, Project, Client and Procurement-related. Data analysis was done using percentage, mean score and t-test. The findings revealed that project and procurement determinants constitute the top three determinants of the SMCEs’ business strategies. Further results show that the effects of the project and procurement-related determinants are the same. Owner-related determinant has the least effect on SMCEs business strategy. The study concluded that the preferred business strategy of SMCEs in Nigeria is a differentiation strategy. The study recommends that SMCEs should promote a deeper understanding of project details, adapt their strategies to procurement methods and engage qualified and competent employees to enhance their competitiveness. The research will promote the knowledge and adoption of appropriate business strategies for SMCEs improved competitiveness.