Searching for niche market for engineering consultants: case of regional supervision systems in China

Abstract

Purpose: A growing number of foreign consulting firms have been engaged in the Chinese construction market where the supervision system, as a kind of engineering consultant service has been widely implemented. However, the performance of supervision system varies significantly across regions. Therefore, foreign consulting firms are in desperate need of related performance benchmarking statistics to determine the niche market. A major issue is lack of a quantitative method to objectively evaluate regional supervision systems’ performance. The paper aims to discuss these issues. Design/methodology/approach: A new regional construction supervision system benchmarking model was developed via the principal component analysis method. This model is based on key performance indicators drawn from annual official statistics. This list of key indicators was refined by means of a focus group with selected experts. Consequently the performances of all 31 regional supervision systems were calculated and ranked. Findings: Results indicate a general gap between coastal and inland regions. The various development trends of top 10 regions are analyzed and the underlying reasons are explored. Furthermore, the regions deserving more attention or currently lacking in development are identified. The supervision industry in China is shifting from a labor-intensive industry to a knowledge-intensive industry. Originality/value: The proposed model provides a single quantitative parameter to conveniently benchmark the performance of various regions. The findings are vital for the benchmarking and clarification of future endeavor of the regional supervision systems and for foreign enterprises that are planning to enter the real-estate market in China.