BUSI 336 Week 3 Industry Feasibility Analysis (Group) Example

Is the Home Modification Industry Worth Entering? An Industry Feasibility Analysis for SteadyHome

The Industry Defined

SteadyHome competes in the home modification industry, the segment of residential remodeling that adapts existing homes so people with physical limitations can live in them safely. Its products range from simple installations, such as grab bars and lighting, to larger projects such as ramps and walk-in showers. Firms in the industry include general contractors, handymen, specialized aging-in-place remodelers, medical equipment suppliers that install stair lifts, and home improvement retailers that offer installation.

Industry Attractiveness: The Five Forces

Demand alone does not make an industry profitable; Porter (2008) traced long-run returns to five forces that shape competition. Each is considered here from the viewpoint of a new entrant.

The threat of new entrants is high. Starting costs are modest, and although Virginia requires a contractor license from the Department of Professional and Occupational Regulation for projects above a set value, many small firms meet that requirement. This force works against SteadyHome.

Supplier power is low. Grab bars, railings, lighting and ramps are sold by many manufacturers and distributors, so no supplier can dictate prices. This force helps a new entrant.

Buyer power is moderate. Individual homeowners buy one project at a time and cannot dictate prices, but they can easily compare quotes. Referral sources such as therapists hold influence because families trust their recommendations.

The threat of substitutes is significant. Families can hire a general handyman, install items themselves or move a parent to assisted living. SteadyHome's assessment and follow-up are designed to make it more than a substitute for a handyman.

Rivalry is moderate. The industry is fragmented into many small firms, but few combine a clinical assessment with installation, which leaves room for a differentiated entrant.

Industry Trends

Three trends favor the industry. First, demand is rising with age: Census Bureau analysis of the 2020 count shows the 65-and-older group grew faster in the preceding decade than in any decade since the 1880s (Caplan, 2023). Second, the housing stock is poorly suited to that population. A study for the federal housing department, HUD, found that fewer than 5 percent of housing units had the basic features, such as a step-free entrance and a bedroom and bathroom on the entry level, needed by people with moderate mobility difficulties (Bo'sher et al., 2015). Third, payers are beginning to cover home safety. After federal rules allowed Medicare Advantage plans to offer a wider range of supplemental benefits in 2019, some plans began covering items such as bathroom safety devices, although early adoption was limited (Meyers et al., 2019). An aging population living in homes built for the young is the industry's demand, written into the housing stock itself.

Target Market

The target market is older homeowners in the Lynchburg, Virginia, metropolitan region who live independently and have fallen or are at risk of falling, together with their adult children. If the region's share of older residents matches the national figure of 16.8 percent, a metropolitan population of roughly 260,000 would include about 44,000 adults aged 65 and older. If one in four falls each year, as federal data suggest for older adults generally (Centers for Disease Control and Prevention, 2024), about 11,000 local residents fall annually. Even if only a small fraction of those households buy modifications, the market can support a new firm. The group will confirm these figures with local American Community Survey data in the financial analysis.

Summary of Findings

Biblical Worldview

The analysis found an attractive industry partly because many people face a real danger. That finding carries responsibility. Proverbs warns against those who make haste to be rich and commends the faithful worker (English Standard Version Bible, 2001/2016, Proverbs 28:20). SteadyHome will compete on trust and quality rather than on fear, and it will not exaggerate fall risks to win work in an industry where buyers are often anxious.

The analysis also points to the risks the business must manage. Because entry is easy, SteadyHome's advantage depends on reputation and referral relationships that competitors cannot copy quickly. Because substitutes are close, the assessment must produce visible value, such as a clear written report, that a handyman cannot offer.

Conclusion

The home modification industry is attractive for a differentiated entrant. Low barriers to entry and readily available substitutes are real threats, but supplier power is weak, rivalry is fragmented and demand is rising with the aging population. SteadyHome's clinical assessment gives it a basis for differentiation. The product feasibility analysis in Module/Week 4 must now test whether customers value that assessment enough to pay for it.

References

Bo'sher, L., Chan, S., Ellen, I. G., Karfunkel, B., & Liao, H.-L. (2015). Accessibility of America's housing stock: Analysis of the 2011 American Housing Survey (AHS). U.S. Department of Housing and Urban Development, Office of Policy Development and Research.

Caplan, Z. (2023, May 25). U.S. older population grew from 2010 to 2020 at fastest rate since 1880 to 1890. U.S. Census Bureau. https://www.census.gov/library/stories/2023/05/2020-census-united-states-older-population-grew.html

Centers for Disease Control and Prevention. (2024). Older adult fall prevention. U.S. Department of Health and Human Services. https://www.cdc.gov/falls/

English Standard Version Bible. (2016). Crossway. (Original work published 2001)

Meyers, D. J., Durfey, S. N. M., Gadbois, E. A., & Thomas, K. S. (2019). Early adoption of new supplemental benefits by Medicare Advantage plans. JAMA, 321(22), 2238-2240. https://doi.org/10.1001/jama.2019.4709

Porter, M. E. (2008). The five competitive forces that shape strategy. Harvard Business Review, 86(1), 78-93.