+1 (208) 254-6996 [email protected]
  

The threat of substitutes is a high one in construction industry – earn the trust of the government and developers

3. Bargaining Power of Suppliers

Don't use plagiarized sources. Get Your Custom Essay on
The threat of substitutes is a high one in construction industry – earn the trust of the government and developers
Just from $13/Page
Order Essay

The bargaining power of suppliers is huge because equipment and material suppliers can give better prices to preferred contractors

 

4. Bargaining power of buyers

Buyers : government and developers who buy the project They have the power to resist the oligopolies of industry

 

5. Rivalry

Rivalry is tough, because of not many company entering

The company already in the industry has huge competition power Beat the price and bid for each other

 

 

1. The threat of new entrants for the construction industry is low because of high cost. The new companies usually open non-union companies like home remodel construction. Civil Work construction is mandatory Union work, which costs significantly more.

2. The threat of substitutes is a high one in the construction industry, the government would like to choose the company they used to cooperate with; on the other hand, if the company messed up once, they would like to switch to another company for this project. Reputation can make or break future contracts for work.

3. The bargaining power of equipment and materials suppliers is huge. If they give better prices to a preferred contractor, that contractor can price a job at a lower cost and win the bid.

4. Buyers : Government who buy the project. Not as prevalent as supplier power. The industry has traits of an oligopoly. A relatively few number of contractors control geographic regions of the industry (Socal, Norcal, Central Cal) (or State by state, ie. CA vs AZ). If all major “Specialty Civil Works Contractors” inflated prices, the government or developers would not subdue easily. They can cancel the project before it begins, which would lead to the industry having to be true and fair on pricing. They can tell because the government and private developers hire independent engineers who give an “Engineers Estimate” so there is a set range on what a project will truly cost.

5. Rivalry is tough, because of not many company entering ; on the other hand, the company already in the industry has huge competition power Beat the price and bid with and against each other to win. Joint Ventures or Solo ventures can win jobs if the price is right.

 

 

 

Industry life cycle

The construction industry is currently in the introduction stage.

Buy the best equipment to increase productivity and make profits.

Train employees how to use the high tech equipment.

In the mature stage, companies will have similar equipment and functions.

 

Currently, Bertco Inc is in the introduction stage. Bertco buys the best equipment to increase productivity and increase profits. They also spend a lot in training operator how to use the high tech equipment. In the mature stage, companies will have similar tools and functionality, and they will be familiar with the operation of the tools, which will make bidding jobs more competitive. Therefore, profits will decrease. They cycle will repeat after maturity/decline when construction equipment manufacturers (CAT, Link Belt, Bauer, John Deere), make even further technological advances with their equipment.

Thank You

 

8.41

Catch the New Wave: What’s the next hot thing in your industry? Is your firm well positioned for this?

Autonomous equipment would be the next new wave

Equipment have the ability to operate without a human inside

Well relationship and financial position let Bertco Inc be one of the first allocations of these machines

 

 

A new wave would be autonomous equipment similar to the Tesla cars that drive by themselves. The equipment will operate by itself without a human inside of the machine. Currently, the machines that are getting closer to mass production are for demolition. Bertco Inc would be pretty well-positioned for this because they have good relationships with the bank financiers for equipment, also have good relationships with the equipment companies so that when they come out, they will definitely help get Bertco. one of the first allocations of one of these machines. It’s not quite ready yet, but when it comes, Bertco would be very well positioned for it.

 

What specifically? It is vague at this point.

Re-branding

There is no benefit to re-branding in this moment and near future

The company logo and slogan are California’s contractor

Licensing restrictions (Licensed only in California)

 

 

 

 

Don’t think that rebranding has any benefit at this moment or in the near future. The reasons are: 1. Currently, the company’s logo and slogan which are California’s contractor. 2. Licensed only in California. For these two reasons, Bertco’s target audience or target consumers or municipalities are cities or federal programs in California state. If you look at the company’s logo you will see the Golden Gate Bridge, which means it’s a San Francisco company because it’s located in San Francisco. The secondary colors are blue and gold, which is also a good representation of California because the UC system has both blue and gold whether it’s UCLA or UC Riverside, and there’s a prominent basketball team called the Golden State Warriors. These also represent the slogans of California contractor. The font for the logo is using Stencil Font, which can represent the building blocks of the letters because that build thing company is a construction company. It’s a pretty neat branding pitch. Therefore, we don’t think the rebrand can benefit Bertco in this period and in the near future, but maybe Bertco can expand to other states in the long term.

 

 

 

 

A small percentage of markup on the labor

The bigger profit comes from the equipment

Beating the schedule

 

How about a new profit model?

Can your firm benefit?

 

Didn’t see any way that currently can benefit from any new profit model and didn’t see any new profit models that are available to companies like Bertco Inc, and that is not just for Bertco but we think the industry as a whole. When the company is a subcontractor or even a general contractor, the profit from a few different things.

1. A small percentage of markup on the labor – if a labor cost 100 dollars per hour, the company will charge 15% markup on 100 for the total of 115 dollars an hour. Then 15 dollars extra would be the profit for every hour. That is a small portion.

2. The bigger profit comes from the equipment – when the company rents the equipment, they have to pay the bills to the company that rents it from but if the company owns the equipment it is an asset and equipment makes money. The car, personal vehicle are assets but they depreciate and don’t make money but equipment even though it is still a depreciated asset it makes the money because it works. It’s a machine, it’s almost like labor, a person. It produces something, and so if you have the equipment it’s on a finance from the bank, when the machine is working you will charge the company that is hiring you the money for the machine and you will use the money to pay the bank for the loan on that machine. And will still have a little bit of the profit but then once the machine has made enough money to pay for itself, you will now start making money that is purely profit from that machine which is a pretty substantial number when some of the machines can cost thousands of dollars for a day of work. If you imagine a job takes a month then you have 22 working days in a month and there are thousands of dollars for a day that can be 22 thousand dollars you are charging somebody for some of the machines and some of them go even higher. Some of the machines go 40 thousand, even 80 thousand dollars for every month that you use the machine. If it’s paid off, all that money is now considered profit. If it’s not paid off, still nice if on the finance because it will pay for itself. If it’s rented, then it’s kind of out of luck because you don’t make much, you have to pay the majority of money back to the company you rent it from and you just keep the small part percentage from the markup.

3.Beating the schedule – if the company has a contract for 1 million dollars for 30 days of work and the company completes work in 20 days, the company will still get paid 1 million dollars. And the extra 10 days that the company saved, don’t have to pay any employees, equipment, etc. Because the company is already done for the work, so the extra 10 days consider profit

Thank You

 

Try to do an analysis on financial side of the autonomous equipment.

Also be more precise on what this exactly would look like.

 

8.375

 

Bertco Inc are aiming higher

Aiming higher means that the company want to get a job as a general contractor instead of sub contractor

The general contractor have the scope to have concrete work and offer the sub contractor to do the basic work such as drilling and profit from offering these work.

New customer

New customers would be some big project holders which will hired us as a general contractor like government and big company – Google and Facebook

 

Can you aim higher or lower?

 

In construction industry, there are little different with other sales industry such as cars. Aiming higher would mean we want to get job as general contractor instead sub contractor, for example the government want to build a freeway, they hire a general contractor ,that would be the manager company hire a bunch of sub contractor who specialize in the certain feld. The general contractor might be a big company does concrete work,they will hire somebody to the basic work. The general company profit from each of the company we hired because Bertco Inc have big scope. The new customer would be some big project holders which will hired us as a general contractor like government and big company – Google and Facebook.

 

Can you provide some more specifics, and some financial analysis?

Can you make a time shift?

 

Hard for Bertco. to make a timed shift

Construction industry rarely has a presence in the public eye, even the very largest companies

This industry isn’t targeted to people. It’s targeted to other entities

Even when Bertco. did work for the private sector, it does not mean the private person is one human who owned the house

 

 

There isn’t really a perspective of appealing to newer buyers because construction industry rarely has a presence in the public eye, even the very largest companies. This industry isn’t targeted to people. It’s targeted to other entities that include skyscrapers, freeways, bridges, airports and things like that. Even when Bertco. did work for the private sector such as Google or Facebook, it does not mean the private person is one human who owned the house. Therefore, that is why Bertco. could not make a time shift and hard to appealing younger or richer buyers. The question can’t really apply to this industry.

 

Can you provide some more specifics, and some financial analysis?

 

Personality transplant

Want people view them as a general contractor

Government will contact general contractors for the job instead of subcontractors

 

 

Bertco Inc want people to view them as a general contractor because that get company seen by the bigger agents and bigger organizations as direct lines that they can contact to organize the construction of a new project.

Order your essay today and save 10% with the discount code ESSAYHELP