ABSTRACT

Construction service companies in Indonesia are showing better growth in the last four years. Indonesia has become the fifth largest and fastest growing market after China, Japan and India and South Korea, but there has been a downward trend in the number of construction companies until 2014 and has increased again in 2015 to 2017. This is inseparable from the development of the business environment that supports for the achievement. This study is to analyze the effect of the business environment on business strategy and performance of construction service companies. This research uses a quantitative research approach. Data were collected through a questionnaire instrument and supported by interviews with leaders of construction service companies in Jakarta. Data analysis was carried out through partial least square with the help of SmartPLS version 3. The analysis shows that the external environment and internal environment have a significant influence on business strategy. The external environment and the internal environment also have a significant effect on company performance both directly and through mediating business strategies. This finding also explains that the external environment has a significant influence on business strategy and company performance. These findings suggest that construction service companies are always on the lookout for shocks that occur in the external environment, so that it can be the company's main consideration in setting strategies both in the short and long term so that the company continues to show its existence.

Keywords: External Environment, Internal, Business Strategy, Performance