Reconfiguring the construction value chain: analysing key sources of friction in the business model archetypes of AEC companies in strategic partnerships

Abstract

Lack of innovation and productivity in the construction industry compared to other industries is often explained by the institutionalised roles and fragmented nature of the construction value chain. Closer connections and collaboration (such as strategic partnerships) among architecture, engineering and construction (AEC) companies and across the values chain is often prescribed as a strategy to improve the performance of the construction industry. However, the institutional roles of AEC companies and their archetypical business models serve as important reference points for the sector. How these business models interact, and the friction created when they come in close contact is not well researched and understood. This paper identifies business models archetypes for architect, engineer, contractor and materials supplier based on workshops and interviews with practitioners. Friction is identified in and between the business models of AEC companies engaging in strategic partnerships. The analysis shows that architect archetypes face friction with regard to their profit formula and could benefit from profit sharing. The engineering archetypes face friction in their processes since they have to coordinate with specialists from other companies. Contractor and supplier archetypes face friction in their profit formula since the open books force them to alter business practices.

Keywords:

• Business model
• friction
• archetypes
• architecture
• engineering and construction sector
• AEC
• value chain

Acknowledgements

This research was supported by the social partnership REBUS (REnovating BUildings Sustainably, http://rebus.nu/) which is a partnership between the Danish Technological Institute, the Technical University of Denmark, Saint-Gobain Denmark A/S, Henning Larsen Architects A/S, COWI A/S, Enemaerke & Petersen A/S, University of Aalborg/the Danish Building Research Institute, Frederikshavn Boligforening and Himmerland Boligforening. The REBUS partnership has received support from the Danish Innovation Foundation, Realdania and The Landowners' Investment Foundation.

Disclosure statement

There have been no conflict of interest related to the research presented in this paper.

Data availability statement

The data generated during workshops and interviews, which the analysis and business models are based on, are of a personal and sensitive nature and can only be accessed by directly contacting the corresponding author and subsequently obtaining written consent from the participant(s).