UK House Building: Analysis From The Perspective Of Porter’s Five Forces Framework

The UK house building industry is a rapidly developing sphere due to the diversity in directions and specializations. There are many large industries, such as Barratt Homes, Taylor Wimpey and Persimmon Homes, that can be characterized by exceptional quality, broad customer base and quality of the construction. However, all of them have different emphases and philosophies to attract new buyers.

Barratt Homes (2014) focuses more on quality, innovation, and eco-design, which are among the recent trends in building. The company that has such an orientation can find many clients and propositions; there is a low threat of new entrants with similar approaches because of the emphasis on brand recognition and quality. In contrast, Taylor Wimpey (2014) is more focused on the types of apartments and constructions which could be proposed to clients at an affordable price. They also pay attention to the location, covering 24 regions in the UK and Spain. Their purpose stems beyond the construction and focuses on the development of the communities in which buildings serve as areas that encourage the expansion of local people. In this respect, the threat of new entrants is more possible because there are many other new firms that could become potential rivals. Finally, Persimmon Homes (2014), is more oriented to individuals and locations. They also focus on authenticity, which is also beneficial for the company to avoid competitors and attract new customer who strive to order an exclusive house. Therefore, like Barratt, this firm is beyond the risk of competition.

When it comes to the analysis of clients and their potential to buy, all the companies have chosen the appropriate strategy with regard to their philosophical ideology and main objective. In order to understand how business operates, it is essential to estimate the bargaining power of suppliers (Department for Communities and Local Government 2012). Barratt, for example, should take resolute measures in the sphere of pricing policies because there are many suppliers whose prices on goods and services could be much higher because of the quality of the product (Monaghan 2014). Therefore, it would be better for them to search for local, high quality producers of raw materials. In contrast, Taylor Wimpey should pay attention to the analysis of such aspects as quality and environmental sustainability because these issues are not discussed in their policies. Additionally, they should pay additional attention to the individual-based approach chosen by Persimmon, which complicates relations with suppliers because they have to order diverse materials that have been selected by the customers. Therefore, the bargaining power of suppliers is considered to be the most significant in this case.

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In relation to the bargaining power of the clients, Persimmon should rely on this fact because they depend largely on the needs and preferences of their clients. Therefore, this is the major challenge they should face while accepting orders and cooperating with suppliers (Croucher 2014). More importantly, Persimmon Homes must be concerned with the new policies that would expand their clients’ choice and attract more clients who are in pursuit of authenticity. At the same time, the company should work more on quality because the latter is a significant factor in sustaining regular customers and attracting new ones. The other two companies could be successful in terms of the bargaining power of clients because they are oriented towards quality and environmental sustainability.

In conclusion, it should be assumed that the UK housing building industry can compete with other international organizations that specialize in building houses and apartments from the perspective of Porter’s Five Forces. The competitiveness of all the businesses under analysis allows them to sustain a competitive advantage over other firms due to the specific target audience and choice of suppliers in the field. Their rivals will have less potential in this case.

Reference List

Croucher, S 2014, ‘UK house building soars amid housing market revival’, International Business Times.
Department for Communities and Local Government 2012, ‘Increasing the number of available homes’
Monaghan, A 2014, ‘UK housebuilding growth slows as outlook jitters weigh on sector’, The Guardian
About 2014, Persimmon Homes, York, viewed November, 2014
Offers to get you moving 2014, Barratt Home, Coalville, viewed November 17, 2014
Who we are 2014, Taylor Wimpey, London, viewed November 17, 2014.

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