Construction Value Chain

Goals

To develop an outline of the value chain of residential construction, determine the stakeholders at each stage of the value chain, and then determine the typical ROI/IRR/Margin for each part of the chain.

Early Findings

The Value Chain

  • On reviewing literature relating to the construction industry, one can find several definitions of the construction value chain.
  • A typical definition of the value chain defines it as "a process that transforms raw construction materials into manufactured materials that are made into a final product."
  • There are other definitions of the value chain as well that define the value chain for each project differently.
  • A typical value chain in the construction industry is made up of regulators, services, and inputs. It is divided into three distinct stages including "design, production and conversion of raw materials into manufactured products, and on-site construction." These stages are further broken down into internal phases, processes, and stakeholders.

The Stakeholders

  • The stakeholders at different stages in the value chain include financiers, developers, owners, users, architects & engineers, contractors, and materials & equipment suppliers.

Companies

  • Some of the largest companies in design and architecture include "Gensler, AECOM, AEDAS, IBI Group Inc. and HDR Architects."
  • A list of building material companies in the US with their revenues can be found here. The companies include Whirlpool, Mohawk Industries, Masco, Owens Coming, Fortune Brands, Jeld Wen Holdings, Leggett & Platt, USG Corp, Installed Building Products, and Caesarastone Sdot-Yam.
  • The largest construction companies include ACS (Actividades de Construcción y Servicios), Vinci, PowerChina, Bouygues, Larsen and Toubro, China Communications Construction Company, STRABAG, Bechtel, TechnipFMC, and Skanska.

Proposed next steps:

You need to be the project owner to select a next step.