Canada’s Construction Industry - Porter’s Five Forces Strategy Analysis
The Canadian construction sector is one of Canada’s largest and most valuable sectors. It includes the design of buildings and infrastructure (engineering and architectural services), the manufacture of buildings products and of machinery and equipment for construction, operation and maintenance, and disposal of facilities.
The construction industry is a major driver of activity in the Canadian 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 Canada is primarily focused on the domestic market and is extremely fragmented.
Aruvian Research analyzes the Construction Industry in Canada 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.