An Executive Digest of the Industry: Pain in the Contruction Industy

The Construction and Development Blog

Pain in the Contruction Industy

Anyone that has been making their living in or around the construction industry in the past 2 years knows the pain the industry is experiencing. Lost jobs, lower revenue, companies closing, are all effects of this economy that have been "in your face" for some time. So how do we compete. Whether it is to get the next project or get a job. The answer has always been the same and is basic economics 101. What is it that I can do that is better, faster, lower cost, or more valuable than my competition. The technical term is "marginal utility". If your offering in the marketplace, whether it is the services of your company or yourself, needs to be more valuable to the consumer of that offering than your competitors. If it isn't, then the winner is always the lowest bidder.

Here is an example of what I mean. If everyone in the marketplace is selling loaves of white bread, then the market mechanisms at work will allow you to only compete on price, and lowest price will win the sale. If, however, I add raisins to my bread, then I have offered something that will be more valuable and I can charge more (until everybody starts putting raisins in their bread). The raisins are my "marginal utility" and the value that I can then add is my "marginal value".

So Mr. Construction Company or Ms. Construction worker, what are your raisins and how do you let your market know that you are the only one with those raisins. You do that, and you will not have to compete on price alone, until your competition figures out what you are doing and copies it.

So figure out what your raisin are, tell your market you've got them, and then start thinking about what you will do when your competition adds raisins too. Maybe, you add cinnamon to your raisin bread.

Value is always at the "margin" of your offers in the marketplace.

Dick

Project Technology Solutions

Posted by ProTech at 1/21/2010 4:53 PM