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Purpose
The BBC Constructions is determined to ensure that it provides quality services in the real estate market. Its urge to construct houses is motivated by the high demand in the building and construction industry. BBC Construction has noticed that most constructing firms in the industry fail to provide quality services and products in the real estate market (Porter 1980, p. 104).
Coupled with the high demand in various classes of markets such as high-end, middle and lower-end market, BBC Construction Company is determined to make substantial profits through provision of quality services and products to various clients. It will be involved in construction of both commercial and residential buildings.
However, due to lack of enough funds that would be required to start developing executive properties in urban areas, BCC Construction would kick start its operations in rural regions (Kanniainen & Keuschnigg 2005, p. 68). Nevertheless, it would be expected to extent its operations in urban regions once it has attained enough capital in the near future.
Market analysis and strategy
BBC Construction understands that an extensive analysis is to be undertaken in order to come up with the best strategies that would enable the company excel in the building and construction industry (Ghemawat 1999, p. 93). This industry has five main competitors that have various weaknesses and strengths.
An in-depth analysis had to be done regarding competition in the industry, which enabled BBC Construction to set its own procedures intended to earn it a large market share. Clear view Constructions is well established in the market. However, it is alleged that it has disputes with VCAT regarding its poor quality work.
Maniatis and Company limited on the hand is proud of having an adequate experience in the industry considering that it was established in the year 1987. The long-term experience in the construction industry has enabled Maniatis and company to acquire adequate contacts at the local level (Wittner 2003, p. 43).
Conversely, a number of analysts claim that the company lacks sufficient knowledge regarding the modern construction methods and management requirements (McGahan 2007, p. 36).
With its establishment in the year 1987, Comdain Homes currently claims 40% of the market share. The company has also established extensive testimonials of satisfied clients, as well as adequate capital for display homes. However, the company only deals with highly priced houses. Most investors in both residential and commercial buildings prefer less executive houses due to limited capital.
Although A & C Quality Constructions is the oldest company in the construction and building industry, the company only owns 10% of the share market. Analysts claim that even though the company has developed adequate local contacts, the firm still faces the problem of limited marketing exposure and testimonials (Hollingsworth 2000, p. 599). Amberstone Constructions is a novel company in this industry.
The company claims 10% of the market share and has engineering background with specialty in design. However, the company has limited diversity in construction principles. Other small companies in the industry own the remaining 20% of the market share.
BBC Construction is determined to start developing properties in the rural region considering that it lacks adequate capital to compete effectively with other companies that focus on developing luxurious townhouses and bungalows in urban regions (Porter 1990, p. 81).
BBC Construction believes that starting its operations in the rural regions would enable it to establish contacts that would be used in building a substantial customer base (Hall & Soskice 2001, p. 58). Moreover, the company will utilize the modern construction methods and engineering background with specialty in design to woo most rural clients.
However, with time, the company will extend its operations to the urban areas by offering quality services at fair and reasonable prices. Cost-leadership strategy is the best that the firm would use to make sure it increases its market share considering that most clients embrace companies that charge reasonable prices.
In addition, the company would continue offering quality products and services in the industry in order to retain a large market share (Besanko & Dranove 1996, p. 67). Along with this strategy, BBC Construction will continue adhering to the regulations of the government to ensure that it does not find itself in conflicts with the government regarding its standards and quality of services.
The target market
The company is determined to start its construction and building activities in the rural and suburb regions. The rural region is expected to have little competition given that large companies such as Comdain Homes targets construction of executive homes mainly in the urban and suburb regions.
BBC Construction Company believes that constructing buildings in the urban regions is more competitive for a novel company (Ghemawat 1991, p. 78). Given that BBC Construction will largely construct quality residential homes, it would be more beneficial to invest in developing rural regions, which demand few commercial properties. The company will start by developing apartments and flats in suburb regions.
However, it would also consider constructing townhouses in suburb regions (Oster 1994, p. 91). The firm will also focus on developing the rural region, which is mainly regarded as the lower end market because the number of companies operating provides their clients with poor quality services at fair prices (Peteraf 1993, p. 101). BBC Construction will provide quality services.
List of References
Besanko, D & Dranove, D 1996, Economics of Strategy, John Willey & Sons, New York.
Ghemawat, P 1991, Commitment, The Dynamic of Strategy, Free Press, New York.
Ghemawat, P 1999, Games Businesses Play: Cases and Models, MIT Press, Cambridge.
Hall, PA & Soskice, W 2001, Varieties of Capitalism: The Institutional Foundations of Comparative Advantage, Oxford University Press, Oxford.
Hollingsworth, RJ 2000, “Doing Institutional Analysis: Implications for the Study of Innovations”, Review of International Political Economy, Vol. 7, no. 1, pp 595–644.
Kanniainen, V & Keuschnigg, C 2005, Venture Capital, Entrepreneurship, and Public Policy, MIT Press, Cambridge.
McGahan, MA 2007, “An Interview with Michael Porter”, The Academy of Management Executive, Issue 16, no. 1, pp 2-44.
Oster, SM 1994, Modern Competitive Analysis, Oxford University Press, Nueva.
Peteraf, MA 1993, “The Cornerstone of Competitive Advantage: A Resource-Based View”, Strategic Management Journal, Issue.14, no.1, pp 179-191.
Porter, ME 1980, Competitive Strategy: Techniques for Analyzing Industries and Competitors, The Free Press, London.
Porter, ME 1990, The Competitive Advantage of Nations, London, MacMillan Press.
Wittner, P 2003, The European Generics Outlook: A Country-by-Country Analysis of Developing Market Opportunities and Revenue Defense Strategies, Datamonitor, London.
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