How has sustainable competitive advantage been obtained within the Norwegian facilities management industry during the period from 2008 to 2018? An explorative empirical study of the Norwegian Facility Management industry
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Purpose: The Norwegian Facilities Management (FM) market is classified as an emerging market with approximately 24-32.5 percent degree of outsourcing. Compared to other European countries, third-party facilities management service providers in Norway make up only a small proportion of the overall economy. In-house Facilities Management is a dominant solution, and therefore, potential market growth is estimated to be high in the Norwegian FM market. Currently, the total market for facilities management services in Norway is estimated to be NOK 100 billion. About half is assumed to be in the public sector (In-house). In recent years (2008-2017), the profitability within the Norwegian facilities management industry (outsourced market) has fluctuated but increased progressively. Consequently, the competitive environment within the outsourced facilities management market has intensified. Thus, several third-party FM service providers have considered various business strategies, such as extensive organic growth, dynamic capabilities, and mergers and acquisitions as appropriate options for achieving competitive advantage and market growth. In conformity with the factors above, the purpose of this empirical study was to examine how sustainable competitive advantage and the variation in profitability has been influenced by the three strategic perspectives, inside out, outside in and dynamic capabilities strategies. Design/methodology/approach: The research reported in this paper applied an explorative empirical case study consisting of semi-structured qualitative interviews (the main mean of gathering qualitative data) and quantitative analysis consisting of accounting figures, annual reports, and research reports. The combination of these data has provided a comprehensive, relevant, and exciting data material about the Norwegian Facilities management market. The qualitative explorative empirical study was based on interviews with ten respondents consisting of two chief executive officers (CEOs), 3 chief business development officers (CBDO), two chief strategy officers (CSO) and three market experts, with an average of 15 years of experience in their respective positions within the facilities management industry. Given the above factors, the conducted case study presents a nuanced picture of how sustainable competitive advantage has been achieved within the Norwegian facilities management market in the period from 2008-2018. Findings: What makes Norwegian third-party service providers competitive and profitable can vary. However, empirical findings from my study indicate that the achievement of competitive advantage within the Norwegian facilities management (FM) industry predominantly been influenced by the emphasis on the resource-based/inside-out and the dynamic capabilities strategic approach. Further, mergers and acquisitions are more preferred than organic growth strategies due to the effectiveness and broad results that mergers and acquisitions offer concerning the achievement of sustainable competitive advantage within the FM industry. These benefits include geographic expansion, competitive dependability, acquiring larger contracts (bundled and total FM contracts), technology, partnership, and unique service expertise and provision. However, externally time conditioned factors, such as degree of outsourcing in the public sector, procurement of large contracts, financial, political and cultural developments have also contributed to the achievement of competitive advantage during the last ten years (2008-2017/2018). Thus, it is not necessary the strategic approaches within the Norwegian third-party services that contribute to the achievement of sustainable competitive advantage and profitability, but customers (client organizations), large FM contracts and external macro factors also contribute to a large extent. Originality/value: Most studies about competitive advantage and profitability take place in technological, financial, and interdisciplinary driven industries. However, there are relatively few studies about competitive advantage and profitability in labour-intensive “blue-collar” industries such as Facilities Management, and particularly service provision in Norway. Thus, this study clarifies how and why various strategic approaches are more preferred than others in the pursuit of archiving sustainable competitive advantage in labour-intensive “blue-collar” industries such as Facility Management. Moreover, this study provides indications, particularly about how third-party service providers have achieved a competitive advantage within the Norwegian Facility Management industry during the past ten years.
Master i økonomi og administrasjon
PublisherOsloMet - Oslo Metropolitan University
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