Business definition and performance implications: the case of the Belgian construction sector

Business definition (either explicitly or implicitly defined) matters in the construction sector in Belgium. A business is a three-dimensional 'strategic space' within an industry, defined by the buyer types targeted, product types sold and geographical reach. The research setting is one of family owned small non-diversified firms in the construction industry. The sample consists of 61 firms. Data on these firms were gathered for the year 2006. Firms with a similar business definition within the construction sector were clustered. Three clusters could be delineated: residential, non-residential and a civil engineering business. Performance differs between the three businesses. Performance was measured with perceptions on sales, sales growth, gross sales margin and return on invested capital. Perceived performance correlated with financial performance. Competitive forces differ according to the business. Firms in the civil engineering sector working for government agencies performed best.