Customers in the Houston area need beautiful office buildings, warehouses, and public works. The area is rapidly expanding and requires a company that can provide high-quality work and materials for these spaces.
Fosse Commercial Contractors (FCC) strives to offer the finest quality design, site preparation, cost estimates, construction, repair, and alteration for clients needing large-scale construction services. They specialize in office buildings, warehouses, large apartment complexes, and public works. Fosse maintains the highest standards of service in the commercial construction industry.
The Houston area is experiencing significant business growth and is expected to continue for the next four years. This makes it an attractive market for Fosse Commercial Contractors.
Focusing on clients desiring office building construction, which is the fastest growing segment, Fosse aims to serve the restaurant segment, special facilities segment, and all other potential commercial clients.
In the Houston area, TNT General Contractors, Texas Specialty Construction, and Polanski Construction are major competitors. However, the market is growing so fast that the demand currently exceeds supply, presenting an excellent opportunity for Fosse to gain market share and establish a defensible position.
Fosse has a unique advantage over its competitors through a supplier contract with McHoughton’s Lumber, owned by Charles Nunn. This allows Fosse to obtain materials at a significant discount, enabling them to underbid rivals and achieve a low-cost leadership role.
Fosse expects increased profits from their market shift efforts by the end of Year 2. However, they anticipate lower profits over the next three years as they enter a tough market. They aim to reduce marginal costs and increase overall profitability by Year 3 or 4 by taking advantage of economies of scale.
Fosse intends to significantly increase overall revenues to close to $900K from $572K in the previous year. They are prepared to inject new capital to support losses in the first year but expect to turn a profit in years 2 and 3.
Fosse Commercial Contractors LLC is a construction company formed from the merger of Fosse Painting & General Construction and West General Contractors. With the local business boom and the desire to improve profit margins, the company plans to shift its target market from residential to larger commercial customers.
In terms of market segmentation, Fosse will focus on customers desiring office building construction, the restaurant segment, special facilities segment (e.g., gas stations, theaters), and all other potential commercial clients.
Competing with TNT General Contractors, Texas Specialty Construction, and Polanski Construction, Fosse aims to gain market share and establish a defensible position. Strong seasonality is a limiting factor in the industry, with contracts and production dropping sharply during the winter months.
Fosse’s advantages lie in offering lower costs and better project management. Through their relationship with McHoughton’s Lumber, they obtain materials at a significant discount, allowing them to underbid competitors.
To achieve a defendable position in the booming local commercial construction market, Fosse must secure at least five large-scale commercial contracts over the next three years, expand its customer base by entering other geographic areas, and increase marketing expenditures by 15%.
Fosse plans to market itself through a referral system, radio spots, ads in commercial construction trade magazines, leveraging existing contacts with local real estate companies, and staying updated on new projects through the local construction association.
The bidding process is crucial for sales. Fosse will focus on detailed project planning, including supply agreements, labor needs, subcontractors, and presentation, to offer the best combination of design, services, material quality, project timeline estimates, and costs to win contracts. They will develop a standardized method for all contracts, emphasizing quality, timeliness, and low cost.
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