Michael Porter’s Five Forces Model in Civil and Building Construction Industry

This presentation explores Michael Porter’s Five Forces Model and its application in the civil and building construction industry. It discusses the competitive rivalry, supplier power, threat of substitution, buyer power, and threat of new entry. The presentation also highlights the limitations of the model and its benefits in analyzing the industry's competitive landscape. It includes case studies and examples of how virtual reality technology is transforming the construction industry. The presentation concludes with a review of the Australian civil and building industry and the application of the Five Forces Model in this context.

MICHAEL PORTER’S
FIVE FORCES MODEL
IN CIVIL AND BUILDING
CONSTRUCTION
INDUSTRY

EXPLANATION OF FIVE
FORCES MODELS
 The five forces include
competitive rivalry, supplier
power, threat and
substitution, buyer power
and threat of new entry.
 Through the five forces
model, organizations keep a
close view on their
competitors as well as look
beyond their actions.
 They help the organizations
to examine factors than can
impact the environment of
business. limitations- thus
model assumes a market to
be classic perfect. Image 1: virtual reality in
construction industry
(Source: Hilfert and König
2016, p. 135)

LIMITATIONS OF FIVE
FORCES MODEL
 Assumes a relatively
static market structure.
 Does not take into
account strategic
alliances.
 This model helps the
construction industry to
detect the entry of
competitors.
 This helps organizations
to find ways to bargain
the powers of buyers
and suppliers. Image 2: virtual reality
in construction industry
(Source: Zhao and Lucas
2015, p. 15)

LITERATURE REVIEW
 According Safari, Farhang and
Rajabzadehyazdi (2016),
virtual reality can be used in
order to shift the idea of
construction using mobile
devices to drone technology.
 This technology in
construction industry solves
various problems that arose
previously.
 As per Hilfert and König
(2016), various problems that
can be solved include scale
up quickly, streamline
collaboration, improve
customer experiences and
many more.
Image 3: virtual reality in
construction industry
(Source: Safa, M., Shahi, A.,
Haas 2015, p. 154)

AUSTRALIAN CIVIL AND
BUILDING INDUSTRY
 Australian constriction and civil industry
has been changed since previous days
because they have used technologies
like virtual reality.
 Virtual reality has changed the way
construction is carried out through
various sensors, cameras and drones.
 Key players and forces within as well as
outside the sector include workers,
suppliers, customers and some more.

APPLICATION OF FIVE
FORCES MODEL
 Usage of virtual reality
can provide competitive
advantage in the field of
construction by reducing
the workforce required.
 Provides 3d modeling to
the industries that
provides a competitive
rivalry.
 The methods used for
construction are much
more advanced
compared to the
competitors Image 4: virtual reality in
construction industry
(Source: Safa, M., Shahi, A.,
Haas 2015, p. 159)

APPLICATION OF FIVE
FORCES MODEL
 The special power
provided by
artificial intelligence
include automation
of the supplier
power.
 The requirement of
resources are
detected by virtual
reality and orders
are placed
automatically. Image 5: virtual reality in
construction industry
(Source: Hilfert and König
2016, p. 136)

APPLICATION OF FIVE
FORCES MODEL
 The buyer power part
of the five forces
model is supported by
virtual reality by
updating customer
related to the services.
 The customers get
information regarding
how much have their
project proceeded.
 It detects an expected
deadline of the project. Image 6: traditional construction
vs. construction with virtual
reality
(Source: Safari, Farhang and
Rajabzadehyazdi 2016, p. 126)

APPLICATION OF FIVE
FORCES MODEL
 The five forces
model has helped
the industry to
prevent any threat
from their
competitors.
 Streamline
collaboration helps
the model to
provide an extra
advantage to the
industry.
Image 7: virtual reality
in construction industry
(Source: Zhao and
Lucas 2015, p. 163)

REFERENCES
 Hilfert, T. and König, M., 2016. Low-cost virtual reality
environment for engineering and construction. Visualization in
Engineering, 4(1), p.2.
 Safa, M., Shahi, A., Haas, C.T., Fiander-McCann, D., Safa, M.,
Hipel, K. and MacGillivray, S., 2015. Competitive intelligence
(CI) for evaluation of construction contractors. Automation in
Construction, 59, pp.149-157.
 Safari, N., Farhang, M. and Rajabzadehyazdi, E., 2016. The
study on the competitive status of construction companies
based on Michael Porter's five competitive forces (Case study:
Armeno Project Development and Management
Company). European Online Journal of Natural and Social
Sciences: Proceedings, 5(3 (s)), pp.pp-72.
 Zhao, D. and Lucas, J., 2015. Virtual reality simulation for
construction safety promotion. International journal of injury
control and safety promotion, 22(1), pp.57-67.