Co-Development as an alternative to competitive bidding in project business

This thesis deals with a specific issue in project marketing, namely project codevelopment, presented as a relational and cooperative form of exchange in the project network. It endeavours to find out under which circumstances the project co-development can be selected as an alternative procurement form to competitive bidding. One of the interests of this research lies in the fact, that it analyses the meaning of a relationship between buyers and sellers having discontinuous exchanges while the majority of contributions on relationship and co-operation deals with continuous exchanges between parties. It addresses the topic of value co-creation with customers and partners that is raising an increasing interest both in the marketing and in the project management communities. A model of project co-development is developed, which is then used to analyse eight cases of project co-development in the construction industry, four are successful cases, three are failure cases and one presents a partial co-development case. This enabled us to analyse factors and conditions that can lead to a successful co-development strategy. Factors such as, the customer's structure and purchasing culture, project risks (complexity, time challenge), the attitude of designer firms, the lack of goal congruence in the project network, the lack of trust and commitment and the capability of construction contractors turned out to influence a co-development strategy. The role played by the key-decision makers (project manager) also influenced the success/ failure of a co-development strategy. Based on these findings a revised model structured according to the different phases of the project marketing and selling cycle is proposed. It distinguishes the key variables influencing co-development and partnering strategies during the following stages: independent of any project, pre-tender and design stage and execution stage. The thesis details the key success factors for contractors wishing to promote co-development. It concludes on the concept of relationship in discontinuous project exchanges. It shows that the first objective of 'project-based relationship' is to reduce the project risks. For large customer accounts, it might also aim at extending the inter-corporate relationship beyond the single project and hence, guarantee more steady revenues through increased customer satisfaction. It actually forms an alternative between the market (competitive bidding procedure) and the hierarchy (Thorelli, 1986) in case of high project risks. While there is discontinuity of the exchanges between the buyer and the seller in project business, the research shows that relationships actually develop between partners on the supply-side. The development of these relationships with supply-side partners, independent of any project, comes across as a key success factor in the promotion of partnering approaches. The discontinuity of project exchanges with customers is then compensated by the continuity of relationships in the supply-chain. These stable relationships enable suppliers to rapidly mobilise strategic resources to co-develop the project when an opportunity is identified.