Home-building Industry

Paper Summary:

This paper examines the home-building industry which plays a major role in the United States' economy, as a significant employer and cash generator. It discusses the industry's dominant economic features and issues relating to Porter's Five Forces, the drivers of changes in the industry and their impact. It also looks at three companies and their positions within the market, key factors for competitive success and the attractiveness of the industry and its prospects for long-term profitability.

Outline
Introduction
The Industry Dominant Economic Features
Market Size and Rivals
Pace of Process and Product Technology Change
Economies of Scale in Purchasing
Porter's Five Forces
Industry Competitors
Threat of New Entrants
Substitutes
Suppliers
Buyers
The Drivers of Change in the Industry and their Impact
Demographics
The Economy and Interest Rates
Company Position
Centex Corporation
D. R. Horton
Pulte Homes
Key Success Factors for Competitive Success
Understanding the Markets
Understanding Local Regulations
Reputation
Industry's Attractiveness, Long-Term Profitability and Conclusion
Works Cited

From the Paper:

"The current shift in American investment patterns away from Wall Street and into real estate has firms that specialize in commercial buildings making a move into homebuilding. The analysts at McGraw Hill cautions the move--the lists of top-400 commercial contractors and the top 100 builders do not overlap, with only a few exceptions such as Centex and Skanska USA (McGraw Hill). The homebuilding market requires experienced project managers, but more importantly financial skills not needed in commercial contracting as well as consumer-oriented marketing skills. Venturing into the intricacies of homebuilding, according to analysts, is risky business (McGraw)."

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