competitive analyses of Clayton Homes Inc., Skyline Champion, and Cavco industries
In-depth competitive analyses of Clayton Homes Inc., Skyline Champion, and Cavco industries are provided below including the research strategy deployed. The above mentioned three companies are the top companies in the PreFabricated/Modular Housing market with over 77% of the market share in this industry.
RESEARCH METHODOLOGY
Since the previous request identified the three top providers of homes in the Prefabricated/Modular Housing as Clayton Homes inc., Skyline Champion, and Cavco industries, we proceeded to analyze each company by focusing on its core products and services, average sales price per unit, target market, and competitive advantage. Most of this information came from the respective companies’ annual reports and investor presentation reports. Third party sources were also utilized, in particular, business reports such as Business Wire and Reuters, and academic databases such as Fern Fort University to provide additional information. Overall, the respective websites also featured useful data regarding the products and services offered by each company.
- CLAYTON HOMES INC.
Target Market
A report published by Reuters indicated that Clayton Homes Inc. is targeting homebuilders who want land and with a budget of $200,000. Moreover, this maker of manufactured homes is primarily pitching energy efficient and affordable manufactured homes to the millennials. This demographic is targeted because, by 2015, they comprised over 25% of the U.S. population. Moreover, at 87 million, they are the largest generation in history according to the Harvard Joint Center for Housing Studies (HJCHS).
Products and Services and Pricing
Clayton Homes Inc. offers a broad portfolio of products and services in home building and ownership. These products and services include traditional site-built homes, modular homes, manufactured homes, tiny homes, college dormitories, military barracks, apartments, home previewer (an app that augments home viewership for prospects), robot-guided home tours, and Clayton Built®. According to the company’s latest annual report, the average sale price of a new manufactured home is $64,826.
Competitive Advantage
Clayton Homes Inc. features several attributes that enhance its competitive edge. The company provides durable and smart homes at affordable rates and uses quality innovation in the homebuilding manufacturing process to manufacture 45,000 factory-built homes every year. In 2017, Clayton Homes Inc. held 47.74% of the total manufactured housing industry market share. During the same year, it launched a variety of innovative home designs that match customer preferences regarding luxurious aesthetics and durable features.
Clayton has over 13,400 team members nationwide supporting families to find their dream homes. The company is also ISO certified for green building standards, has won several MHI home design awards, and has been the MHI Retailer of the Year” for 11 of the past 12 years. Over the years, the company has made some acquisitions and partnerships to strengthen and support its position as an industry leader. Notably, since October 2015, the company has acquired homebuilders at a rate of 2,500 to 3,000 per year in Atlanta, Nashville, Tennessee, Kansas City, Denver, Birmingham, and Alabama.
- SKYLINE CHAMPION
Target Market
Formerly Champion Home Builders and Skyline, the two companies merged operations in June 2018 to create Skyline Champion Corporation, the biggest independent publicly traded factory-built Housing Company in the U.S. with combined revenue of over $1.3 billion. Skyline Champion primarily targets the millennials and Baby Boomers, according to their February 2019 Investor Presentation. The company specifically focuses on these demographics since they make up 75% of manufactured home sales.
Products and Services and Pricing
Manufactured homes, modular homes, park models, commercial modular construction, logistics, and retail are the top products and services offered by Skyline Champions. The company is well positioned and equipped to compete with industry giants such as Clayton Homes in different ways. The average retail price for Skyline Champion manufactured homes varies depending on size, but the average of a newly manufactured home currently retails at approximately $150,000, since in 2017, approximately 80% of new homes sold under $150,000 were manufactured homes.
Competitive Advantage
First, the company has a massive geographic footprint across North America. It has 12 manufacturing facilities in the nation’s top 10 states coupled with nine manufacturing facilities in the top 10 fastest growing states for manufactured home shipments. Altogether, the company has 36 operating manufacturing facilities, 21 retail locations in seven states, and ten logistics terminal. Second, Skyline Champions holds 17% of the market share making it the first runners up behind Clayton Homes. In 2018, the company had total revenue of $1.298 billion. Next, the merger offers an enhanced platform with improved capabilities and a comprehensive portfolio of product and service offerings with leading brands.
Fourth, Skyline Champions boasts a reputation highlighted by over 65 years of experience in building quality manufactured homes, modular homes, and mobile homes that are affordable to a wide audience.
Overall, the company has enough workforce and financial support to drive its business growth and expansion. According to the latest figures, Skyline Champion has over 6,800 dedicated employees that serve customers globally, and since its inception, the Champion family of builders has provided over 1.7 million factory-built manufactured homes, modular homes, and mobile homes.
3 .CAVCO INDUSTRIES, INC.
Target Market
Cavco Industries, just like its competitors targets the millennials and aging baby boomers. According to the company, their energy efficient and affordable homes are attractive to entry-level customers, first move-up customers and aging baby boomers seeking lifestyle change, immigrants, and second home and seasonal living. The millennials are poised to be the biggest home buyers demographic in the next decade; hence, more marketing options specifically designed for the millennials.
Products and Services and Pricing
According to the company’s 2018 Investor Presentation, the average retail sales price for their manufactured home is approximately $70,000. Cavco offers several products and services including commercial financing, manufactured homes, modular homes, park model RV’s (recreational vehicles) & cabins, commercial structures, mortgage lending, and insurance.
Competitive Advantage
Cavco Industries competitive advantage stems from several factors including its leading position in the manufactured homes industry exemplified by 39 retail stores and 20 manufacturing facilities. It also has a strong dealer community with expansive distribution networks. Next, the company’s automation process has helped it scale up and scale down to match the prevailing market conditions of demand.
Third, Cavco deploys highly successful “Go to market strategies” for its product lines and services. Fourth, the company has superb performance in entering new markets and a successful track record of acquisitions and mergers to develop a reliable supply chain. Overall, Cavco has a reputation of offering high-level customer satisfaction and experiences, good return on investments and profit margin, and a strong base of reliable suppliers of raw materials.