Title:                          ROCKY COAST BUILDING Case Study

Subject Area:          Positioning strategy, competitive strategy

Region:                      MA, United States

Industry:                  Construction Industry

Company:                 Rocky Coast Building, a home building company

Challenge:           Needham native Rob Craft founded the Rocky Coast Building (RCB) construction company in 1993 with the mission to provide members of his community with a transparent process for creating their dream home through maintaining relationships with suppliers built on trust and delivering high-quality finished products. With the number of competitors in the market increasing while margins remained stagnant, Rob looked to his childhood friend, Jon Smith, for help in 2016. Jon discovered that although RCB was constructing approximately ten speculative (spec) homes a year, the company could generate a higher net income by making five to six custom homes a year. With this in mind, Rob and Jon have a dilemma challenge in which they must decide whether to continue with their current strategy of focusing on spec homebuilding or to alter their strategy to focus on custom homebuilding.

Elucidating the Team’s Professional Core

Our team consists of individuals who have contributed their expertise to this project, specializing in various facets of business and political science.

Social Capital: Embedding in Industry

Data Collection Methods and Scope of Data Collected

• One in-person interview with the CFO in Needham, MA
• Balance sheets and income statements provided by RCB
• Secondary data sources from news sources and government sites

Professional Capital: Analyzing and Solving the Challenge

Analysis:

• Conducted a comparative SWOT analysis for spec homes and custom homes using frameworks, including PESTEL and Porter’s Five Forces
• Detailed the matches between the strengths/opportunities as well as the weaknesses/threats
• Created pros and cons lists to summarize the findings from the SWOT analysis charts
• Compared spec and custom homes across four metrics with a radar chart

Findings:

Company

• RCB has a strong history of building homes in the Needham area since 1993
• They specialize and have expertise in both custom and spec home building

Industry

• Rivalry: RCB faces less rivalry with custom homes and more rivalry with spec homes
• Power of Buyers: Buyers have less bargaining power for custom homes and higher bargaining power for spec homes
• Threat of Substitutes: Few substitutes for custom homes but many substitutes for spec homes

Market

• Economic: The Needham market is affluent and buyers can afford high-end homes
• Socio-cultural: Buyers want to have a unique home that stands out from the others in the area

Solutions:

Recommendations:

• RCB should shift its focus to building custom homes (specifically custom modular homes)
• RCB should position itself as the most transparent and trustworthy builder in the market by driving goodwill with inspectors, suppliers, and customers
• RCB should expand into other wealthy Boston suburbs outside of Needham

Implementation:

• Enhance culture by adopting the values of accountability, safety, and quality
• Understand the modular home supply chain, create space within it as an intermediary
• Expand their supplier network, add modular home building factories within the area
• Execute modern modes of online marketing to communicate RCB’s new services