The research blends competitiveness theory with practical analysis of China's urbanization and smart city market and construction firms. From the interplay between theory and practice, the research generated a competitiveness model and isolated key competitiveness indicators (KCIs). The impact of smart city development on the construction industry has few aspects. The preliminary development of a smart city requires integration between industry sectors. Competition is already strong in the construction industry because of the large number of construction contractors. In the context of the competitive smart city market, construction companies are required to further improve competitiveness through honing the capability to undertake smart projects. KCIs are the foundation of construction firms' competitiveness. Firms' KCIs could be divided into three sections: corporate strategy, organizational capability and financial capability. A competitiveness model may be established by the Analytical Hierarchy Process (AHP).