📚 Essay Example: SWOT Analysis of the Construction Industry

Type of paper:	Essay
Categories:	SWOT analysis
Pages:	7
Wordcount:	1736 words

15 min read

143 views

HDS Canada is a Company that distributes tools industrial supplies. The construction department of the company has been established to enable engineering and repair jobs and deals also with the division of land. HD company offers manufacturing and construction services. The construction company is committed to investing in businesses and a continuous effort to improve customer experience. The growth strategy of the company is to sell more equipment to their existing customers and to attract new ones. The SWOT analysis of the construction company can be summarized as follows, in terms of its strengths, weaknesses, opportunities, and threats.

SWOT Analysis

	Strengths	Weaknesses
Industry	The company has many customers, serving up to five hundred including maintenance professionals, government operations, immigrants and contractors.	A decline in their new construction market that had its peak since 2005, and a lack of prediction of the current housing conditions and industry market conditions The continued weaknesses in the residential construction market could affect the operating results, financial position, and the overall business.
Market	The construction company has both non-residential and residential market segments which provide a lot of customers and revenue. The company does not settle for second rate materials, remaining the top distributor of real equipment. Their services are high level enabling contractors to count on their trade experts across infrastructure, commercial and residential applications.	Uncertainty about the current economic conditions has posed risks to individual business units Negative financial news and a decline in asset values might hurt demand for construction services and products. The company cannot predict the current market condition to determine the future recovery of the non-residential construction activity.
	Opportunities	Threats
Industry	The opening of a new branch in Toronto will create efficiency and will increase the number of customers in the industry. Great support from their sister company, Whitecap in the USA which provides hot deals, contests, and demos that help raise the status of their industry in Canada. Population increase in Canada will increase demand and supply of construction facilities	In comparison to other industries, construction companies are known for their highly risky, highly fragmented, cost overruns and conflicted sectors. Interruptions in their information technology could slow down operations.
Market	Great public support from the Canadian Cancer society whom they helped make a difference for the Canadians affected by cancer, through the hashtag, "contractors for the cure." Immense expansion of their commercial construction services due to good advertising.	The company is subject to competitive pricing pressure from its customers. This might affect cash flow and future financial conditions. Legal proceedings expose the business to product liability claims.

SWOT Analysis of the Manufacturing industry

The manufacturing industry of HDS conducts its businesses in an interacting manner. This sector usually caters for the B2B clientele. These are more organized than the average construction customer; they order in large quantities and orders are placed in advance. B2B customers are perceived as being updated with trends in the industry as well as in technology. At a time where customer loyalty is an essential component for the success of any business, delivery of orders within schedule goes a long way to satisfy and maintain these customers. Below is a SWOT analysis for this sector.

	Strengths	Weaknesses
Industry	A projected increase in readily available and cheap labor through non-residential employment in 2019 with increased engineering investment and rising ICI building construction. Further investment in highway and bridgework to be sustained until 2025. Increased activity of the LRT projected expected in 2019.	Decrease in the labor force as the average age of construction is expected to reduce to 41. This translates to a decline in new entrances as most of the current will be in retirement by 2026.
Market	Improved efficiency from increased industrial advancements has allowed for maximized productivity in machinery and workers. The ability of the market to make quick recoveries from the effects of fluctuation by the economy.	The market is almost saturated with competition among existing firms which could discourage new entrants. Also, the maturity of the industry favors better existing firms. High level of vulnerability to economic fluctuations.
	Opportunities	Threats
Industry	The steady increase in renovation activity resulting in the satisfied residential workforce. An increase in new housing projects investments.	The marked rise in near-term demands for major transport and infrastructure projects. For instance, the transit project in Ottawa, international bridge in Windsor, and nuclear refurbishment projects in Southwestern Ontario and GTA. The ever continuous advancements in technology may be hard to cope with.
Market	The availability of internet connectivity enhances the efficiency of management systems and data allocation across integrated platforms and equipment. Market segments including biotechnology and technology have higher profit margins. The growth of these segments presents a commercial opportunity.	Political instability that negatively affects international trade. Slow growth rate for the demand for manufactured goods on a local level. Very few companies enjoy the benefits of research and development in the manufacturing sector. Little effort by many firms on research leads to missed opportunities.

HDS Brafasco which is short for (Brampton Fastener Company), was founded in 1966 in Brampton, Ontario, Canada. It specialized in the supply of fasteners. In 2013, the company publicly traded their shares for the first time at the NASDAQ stock market. HDS Brafasco if one of Canada's most agile distributors in the construction, industrial and institutional markets. Throughout the time they have been operational, Brafasco has garnered awards and high accolades including the U-T award for the best workplace in Canada of 2011 and 2013. Currently with over 40 branches and over 200 associates in more than 7 provinces in Canada, the company is scaling new heights in both the construction and manufacturing sectors. Serving millions of professionals, engineers, and constructors, Brafasco is considered one of the best and most reliable in the market.

SWOT Analysis

Strengths

Cash-rich organization hence financial stability.
Positive trend of smaller product categories including hardware tools.
Ability to provide provision for Heights up to 2017.

Opportunities

Customer growth allowing for market expansion.
Marketing opportunities. For instance, by using mobile apps.
Aerospace and Automotive industries offer and opportunity for future investments.
Possible expansion of existing product lines.

Weaknesses

Merchandise layout for some stores is wanting.
Training of staff is an expensive exercise.
ERP and CRM systems are not integrated and their lack of communication while on different platforms leaves no data for analysis.
The success of a store is dependent on the sales representatives whose peak performance may take some time to achieve.
Inventory management is a challenge because of the large size of the company.

Threats

Competitors taking over the market share. For example, Ackland Grainger.

The different HD Supply stores in various locations differ significantly in their performances in terms of sales and efficiency. The following is a detailed analysis of the strong, higher performing stores and their weak, lower performing counterparts in terms of their strengths, weaknesses, opportunities, and the threats they face.

Analysis of strong, highest performing stores

Strengths

Financial stability and security realized from a long life in the market.
Ability to make timely deliveries which maintains customer loyalty.
Professional and expert workforce improves the quality and efficiency of work.
Availability of labor as they are located in densely populated areas. They also appreciate their employees for their hard work which is a motivating factor.

Opportunities

Their location in areas with large population provides an opportunity for growth and expansion into new markets.
Expected growth of the mining and utilities infrastructure is a chance to venture into new domains.

Weaknesses

Staff training can be an expensive exercise.
Changes in demographics which results in changes in preferences and tastes.
Changes in government policies that affect the economy.
Demand fluctuations that are sometimes unpredictable.

Threats

Acquisition of workforce as current baby boomers move into retirement.
Loss of customers to competitors.
An increase in interest rates.
Unpredictable fluctuations of the economy.

Analysis of the weak, lowest-performing stores

Strengths

Increasing popularity of categories of smaller items especially hardware tools.
They can borrow information from other HD Supply stores that have been in the business for long.
They are tapping into new markets as trends in building and construction are projected to soar.

Opportunities

Increasing urbanization trends present expansion opportunities for the stores.
Advancements in technology can be adapted to increase efficiency and promote further development of the stores.

Weaknesses

Challenges in managing inventory.
Sales reps are significant contributors to the success of a store. Optimum performance may take some time to achieve.
Gaps in keeping track of marketing performance.
Limited outreach to new customers.

Threats

Stiff competition from companies that have integrated e-commerce into their systems.
Changes in legislative policies that could hinder their expansion from reaching new markets.
Low levels of growth and development due to minimal research.

HD Supply Brafasco attends to customers in both the manufacturing and the construction sectors. Customers in the construction sector require that their orders be attended to as fast as they place them. These do not hesitate to jump ship if their demands are not met. The company undertakes projects of its own but sometimes works for other companies or individuals as contractors. Their B2B customers are more organized, and their orders are usually in large quantities. Owing to its size and number of branches, it is conclusive that HD Supply has carved a niche for itself in the construction and manufacturing industry.

From the analyses provided above, one of the primary strengths contributing to the success of HD Supply is its vast network of customers. With most of their stores located in densely populated areas, they can serve existing markets and venture into new ones. These areas represent significant opportunities for growth and development as they are evolving and developing as well. HD Supply benefits from easy labor force acquisition and a ready market for their goods and services. Also, decreased transportation and operational costs as most of the market is concentrated in one area.

Their success is not without challenges. Their weaknesses and threats are mainly centered on legislative policy changes, changes in demographics leading to loss of labor, competition, and changing trends in the industry. The company should strive to stay updated on the changes made to government policies that could affect their operations or expansions to new markets. This way it can make necessary changes and adjustments ahead of the changes. Use of e-commerce and other trends in marketing could give it a competitive edge.

Cite this page

Essay Example: SWOT Analysis of the Construction Industry. (2022, Oct 10). Retrieved from https://speedypaper.net/essays/swot-analysis-of-the-construction-industry

Request Removal

If you are the original author of this essay and no longer wish to have it published on the SpeedyPaper website, please click below to request its removal: