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Porters 5 forces
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Porters 5 forces
Here is my model. Is there enough detail here? Does anybody have anything different?
Porters 5 Forces
Bargaining Power of suppliers
Low –able to centralise procurement to get better deals. Lots of large & small suppliers.
Skilled construction workers have high supplier power – but market is down 10% so more unemployed skilled workers.
Threat of market entry
Low- Set up costs are high(machinery, tenders, materials- usually need to fund project until stage payments are made). Construction is very capital intensive industry. Economies of scale make it difficult for new entrants to compete.
Bargaining Power of buyers
High- tenders must be submitted for projects. Number of projects are down so each tender must be more competitive that in previous years.
Substitute products or services
Low- For some products there are substitutes (eg prefabricated buildings for some hospitals/ school buildings) – but none for roads/ stadia office blocks (although some smaller offices can be substituted by prefabs too
Rivalry among existing firmsHigh- Reduced opportunities and large number of companies has made the industry extremely competitive (as seen by margin in industry being really low).
Porters 5 Forces
Bargaining Power of suppliers
Low –able to centralise procurement to get better deals. Lots of large & small suppliers.
Skilled construction workers have high supplier power – but market is down 10% so more unemployed skilled workers.
Threat of market entry
Low- Set up costs are high(machinery, tenders, materials- usually need to fund project until stage payments are made). Construction is very capital intensive industry. Economies of scale make it difficult for new entrants to compete.
Bargaining Power of buyers
High- tenders must be submitted for projects. Number of projects are down so each tender must be more competitive that in previous years.
Substitute products or services
Low- For some products there are substitutes (eg prefabricated buildings for some hospitals/ school buildings) – but none for roads/ stadia office blocks (although some smaller offices can be substituted by prefabs too
Rivalry among existing firmsHigh- Reduced opportunities and large number of companies has made the industry extremely competitive (as seen by margin in industry being really low).
Last edited by daheff on Thu Feb 03, 2011 1:31 am; edited 1 time in total
daheff- Posts : 14
Join date : 2011-01-25
Re: Porters 5 forces
Threat of market entry would be low wouldnt it?
gruffy8- Posts : 3
Join date : 2011-02-01
Porter
I would argue that the suppliers are powerful due to the rising price of commodities.
Claire McGovern- Posts : 4
Join date : 2011-02-05
Age : 58
Location : London
Re: Porters 5 forces
Low demand of construction materials in the industry would result in low supplier power.
khanfaraz54- Posts : 2
Join date : 2011-02-12
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