If you’ve been paying attention there has been an ongoing consolidation trend in many business sectors. Communications, supermarkets, airlines, Internet media, construction materials suppliers and construction companies, just to name a few. There are a lot of reasons why one company would buy another but lately businesses are constantly searching for new efficiencies, new markets to serve, and frankly, they are doing buy-outs and take-overs just because they can. As markets tighten up business values sink for certain players making them attractive for buy-outs and take-overs.

Another factor affecting consolidation on a global basis are tighter margins resulting from intense global competition. And like it or not, global happenings are affecting local businesses and they are doing it in similar ways.

Andrew Spellman, an audit partner with Price Waterhouse Coopers, recently spelled out the three biggest issues facing the construction industry:

• Reduced demand in key sectors;
• Intense competition bringing pressure to bear not only on margins but also on contractual items like timetables and guarantees; and
• Attracting top performing professionals.

Spellman predicts the evolution of a few, very large firms with a group of smaller players serving niche markets. When I think about those niche markets I think about things like hospitals and medical facilities, education, energy, high-end residential and other construction activities that require a special knowledge base and finesse factor.

So as this new economy continues being born it would serve most players well to consider just where they fit into the larger picture. Is yours a business that is ripe for a buy out? Or, is yours one that could benefit from expansion through acquisition? If you are serving several markets now, but are seeing some of them drying up, is one of them a niche where you can differentiate yourself?  How much more efficient can you get? Where ever you fit, do you have the right people for now, and for future plans?

Knowing where you fit is an exercise in cold, hard deduction. It’s a matter of seeing your company like others might, but more importantly it’s a matter of seeing it for what it really is. Once you have the assessment you can use it to position yourself for much more than just survival.

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