Construction Industry in Australia – Porter’s Five Forces Strategy Analysis

The construction industry is a major driver of activity in the Australian economy. It is made up of residential buildings, non-residential buildings, and engineering construction. It includes architectural and engineering services and construction trades such as bricklaying, plumbing, electrical, etc. Construction in Australia is primarily focused on the domestic market and is extremely fragmented with around 200,000 businesses, which represents 20% of the total number of companies in Australia.

Aruvian's R'search analyzes The Construction Industry in Australia in Michael Porter’s Five Forces Analysis. It uses concepts developed in Industrial Organization (IO) economics to derive five forces that determine the competitive intensity and therefore attractiveness of a market. Porter referred to these forces as the microenvironment, to contrast it with the more general term macro-environment. They consist of those forces close to a company that affect its ability to serve its customers and make a profit. A change in any of the forces normally requires a company to re-assess the marketplace.