Many opportunities due to necessary infrastructure investments
Despite the current market challenges faced by infrastructure firms, such as the nitrogen issue, high prices and limited budgets, there are significant opportunities in the medium to long term. The coming years will see ample work due to the energy transition, climate adaptation and mitigation, and the digitalisation of society.
Make a clear choice for the business model
Infrastructure companies need to make clear choices regarding their business model, deciding between a strategy of integrated design for two-phase contracts or positioning themselves as price competitors in the bidding market. Two-phase contracts carry fewer risks but require a different approach, especially in terms of planning and engineering (first phase) and require specialised knowledge.
Choosing to focus solely on the bidding market is also an option, particularly for smaller infrastructure companies. However, risks are higher in this case, and these companies must strive to become real “price competitors” in order to work at the lowest possible prices. Specialisation is necessary for this model. While it increases competitiveness, it also entails more risks if demand changes. Therefore, building a financial buffer to absorb (temporary) demand shocks is desirable. Diversified infrastructure companies with multiple areas of expertise face these risks to a lesser extent. However, the disadvantage of this latter strategy is that a company may not excel in any specific area, which can make it more difficult to secure contracts as specialised companies may submit better bids for each submarket.
Sustainable business processes
It is essential for infrastructure companies to focus on sustainability in their construction processes. The sustainability of equipment will become increasingly important for many projects as it becomes a requirement for clients.
Embrace digitalisation
Further digitalisation of internal processes is crucial for companies to work more efficiently and address labour shortages. It can help alleviate personnel shortages and make the company more competitive.