As the competitive environment in the engineering business changed from technology competition to price competition, profitability of Korean engineering companies has been decreased. High profitability is a fundamental objective of business and one of the key factors of firm's long term survival. Therefore new competitive strategies of Korean engineering companies should be developed to find a way out of price competition and to earn high rates of profit.
The purpose of this study is to suggest a new way of achieving competitive advantage in the engineering business. A firm can achieve competitive advantage if it creates more customer value than its competitors. To utilize customer value as a source of competitive advantage, we analyze the engineering business from the business-to-business professional service perspective.
The major contributions of this study are as follows: first, based on the review of related literature, the customer value creation process of the engineering business is identified. Second, using the customer value creation process, the customer value and its detailed dimensions of the engineering business are structured systematically.
The following is finding of this study. The customer value of the engineering business consists of process value and outcome value. Dimensions of process value are reliability, responsiveness, competence, understanding, communication, and reputation, and those of outcome value are performance, conformance, and durability.
The ways of increasing the customer value are presented through the analysis of core activities of S engineering company. It is found that process value is a satisfier factor and outcome value is a hygiene factor of customer value in the engineering business. It can be concluded that S engineering company needs to concentrate its effort on creating more process value than outcome value for increasing total customer value.
