The implications of the major determinants of demand and supply to Essay

The implications of the major determinants of demand and supply to domestic house building industry - Essay Example This paper starts with understanding this market. Here we will discuss about Porter’s Five Forces Model and try to understand the kind of customers marketers have in the domestic housing sector. This section would be followed by the discussion on determinants of demand and supply in the housing industry. Once we have understood the market structure and supply-demands we will be discussing various factors like economic, social, legal and environmental which affect the industry. This will be followed by the analysis and conclusion. The industry is made up of around 192,404 construction firms, 164,000 of which have less that 24 employees. Just 56 firms have more than 1,200 employees. (Source: Construction Statistics Annual 2002/CITB). 2 There are around 192,404 small and big firms. 56 firms have employed more than 1200 employees while 28,348 firms have employed 25 or more than 25 people and rest 164,000 firms have employed less than 24 people in their organization. Around 500 firms work for overseas contracts also.4 The segment rivalry and exit barriers are high. As it is almost mature industry in Britain, the number of suppliers and rivalry among them is high. This gives an added advantage to the constructor to negotiate for the quality and the price of goods supplied by them. The switching cost from one supplier to another is usually high. Buyers’ power in the case of houses is limited. There are several reasons for this i.e. increasing demand of house, lesser number of buyers, buyers not connected to each other, lack of information and others. The threat of substitutes is less and within the category. Housing requirements of an individual or family can be very specific leaving no room for many or instant substitutes. It depends upon the quality, price and availability of the house. The consumer behaviour can be divided on the basis of the type of consumers. They can be divided on the basis of