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    Porter'S Five Force Model of Constructive Industry in India

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    Saksham Garg
    The document analyzes Porter's five forces model of the construction industry in India. It finds that rivalry among existing competitors and threat of new entrance are high due to the large number of construction companies. Bargaining power of suppliers is also high while bargaining power of buyers and threat of substitutes are low.

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    Porter'S Five Force Model of Constructive Industry in India

    Uploaded by

    Saksham Garg
    613 views2 pages
    The document analyzes Porter's five forces model of the construction industry in India. It finds that rivalry among existing competitors and threat of new entrance are high due to the large number of construction companies. Bargaining power of suppliers is also high while bargaining power of buyers and threat of substitutes are low.

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    PORTER' S FIVE FORCE MODEL

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    The document analyzes Porter's five forces model of the construction industry in India. It finds that rivalry among existing competitors and threat of new entrance are high due to the large number of construction companies. Bargaining power of suppliers is also high while bargaining power of buyers and threat of substitutes are low.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    613 views2 pages

    Porter'S Five Force Model of Constructive Industry in India

    Uploaded by

    Saksham Garg
    The document analyzes Porter's five forces model of the construction industry in India. It finds that rivalry among existing competitors and threat of new entrance are high due to the large number of construction companies. Bargaining power of suppliers is also high while bargaining power of buyers and threat of substitutes are low.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    PORTER'S FIVE FORCE MODEL OF CONSTRUCTIVE INDUSTRY IN INDIA

    1.RIVALARYAMONG EXISTING COMPETIORS (HIGH)

     Rivalry is strong due to the large no. of construction companies operating in India (around
    250 in total) and the difficulty to differentiate
     The services offered by real estate companies cannot be differentiated because these firms
    don't offer a product, other than the facilities they lease and this itself is very difficult to
    quantify
     In the current economic crisis, there is minimal profitability and only companies with large
    cash reserves are likely to survive.
     High competition in cases of road construction, housing and urban infrastructure
    development Relatively less competition in airport and port development.

    2.Threat of new entrance (HIGH)

     When an industry has over 60,000 registered participants, it is hard to conclude that barriers
    to entry are high. Although the number of entrants varies over time and according to market
    condition
     no special legal authority is needed to enter the industry. That is why industry as and when
    returns become attractive or simply out of interest.
     Designs, names and concepts can all be copied as there is less ability to protect these
    through patents or copyright. People such as agents, consultants, property managers and
    employees of rivals can all be hired.
     Capital can be considered a barrier to some extent but mostly to larger scale projects. The
    minimum amount of capital needed to enter the industry is compared to the likes of steel
    bars, cement and other raw material.

    3.Bargaining Power Of Buyers (LOW)


     Bargaing power of buyers is not high due to large demand and large number of buyers O
    Cost incured in constrution is also almost same but this cost varies from the quality of
    construction and area of land used.

    4.Bargaining Power Of Suppliers (HIGH)

     As contructive industry is facing several problems in supplies as shortage of labour, contant


    rising prices of various raw materials required in construction and due to large number of
    construction companies as compared to raw material providing companies.
     An important category of suppliers is the bank. They have the power to decide whether to
    fund a venture or not and at what rate. Banks have now become highly conservativ
    especially after the economic downturn.

    5.Threat Of Substitute (LOW)

     Real estate development involves different types of products - residential, office, retail and
    industrial being the most common. To narrow the scope of discussion, we will just consider
    private residential construction. As accommodation, new private housing from any firm can
    be replaced by competitive product from another developer, existing private housing for
    sale or for rent, social housing either for sale or rent. But these are not close substitute as
    people prefer to have their own house or flats.

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