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<p align="justify">Poly Real Estate (PRE) is the subsidiary of the China Poly Group (CPC) a state-owned holding company. PRE was established in 1992 and is a listed company; it was later renamed Poly Development: Poly Developments and Holdings Group Co. (Poly, 2021). It operates in the real estate development sector; it is engaged in the design, construction, and development of both residential and commercial properties. The company has its brand system and benchmarking products in hotels, malls, industrial parks, and convention centers. It has started in China and afterward expanded globally through the subsidiary Poly Global. The company has effectively integrated the supply chain of the real estate industry; through its subsidiaries those control construction, property, assets management, and other businesses. It has created a unique mix of services in the industry and helped form an entire ecosystem. Porter’s five forces model is an appropriate analytical tool to evaluate the threats a company faces and the opportunities it can potentially explore.</p>
<h2 align="justify">Competitive Rivalry in the Market</h2>
<p align="justify">Poly development operates in the highly competitive sector, and the company is part of one of the massive state-owned groups of companies. It has vast experience in the real estate industry with a unique portfolio. As the company operates globally, it is exposed to global competition but its significant business is in China. The company’s major competitors are Swire Properties Limited (SPL) and China Gezhouba Group Company Limited (CGGC). CGGC is one of the largest contractors in the world, and it was among the ENR Top 250 International Contractor in 2015 (ENR, 2015). CGGC made $ 17.11 billion in revenue in 2020 with a net income of $650.61 million (DNB, 2021). In the financial year 2020, SPL posted revenue of $ 1.72 billion and a net income of $ 528.10 million (Nikkei Asian Review, 2021). In the same financial year, Poly development posted $ 35.53 billion in revenues (Nikkei Asian Review, 2021). The competition remains high due to the presence of well-established private and mega state-owned organizations.</p>
<h2 align="justify">Threat of Substitutes</h2>
<p align="justify">In the real estate industry threat of the substitute remains low, due to the stiff nature of the industry. The parts of the industry can be improved with the help of technology and the use of advanced robotics, but on the whole, it is difficult to overhaul a massive industry with magnanimous value. The global real estate industry will be worth $ 2.7 trillion by 2021 (PR Newsire, 2021). Real estate development companies have started to offer bundled services and improved the consumer-facing side of the business. In China, people are still more inclined to lease property in the urban centers, where there are more employment and educational resources. Its principal benefit is that responsibility falls on the property management company. Shortly, this trend is likely to follow, so the threat of better alternative products remains low.</p>
<h2 align="justify">Threat of New Entrants</h2>
<p align="justify">The threat of new entrants remains low in large-scale real estate development due to the usual barriers of entry associated with the industry. Despite the high return on offer, the real estate sector is capital intensive and requires a significant capital investment upfront, this acts as a deterrent for potential new businesses. This remains true for the global real estate development landscape, other barriers such as capital acquisition and further acquisition of technology and skills are necessary. As analyzed by Valence, in the competitive market intensity of the competition, access to capital, the market power of incumbents, and cost of investment of entry are such barriers for new entrants that here intensity remains high (Valence, 2012). Therefore, the threat of new entrants remains low.</p>
<h2 align="justify">Bargaining Power of Buyers</h2>
<p align="justify">It depends on various factors, but buyers usually have moderate bargaining power in the real estate industry. The primary buyers are the individuals or, if any, property management firms. The other factors that can influence the price from the consumer&#8217;s perspective are the experience of the consumer, availability of the information, and the ability to use that information to negotiate a better price (Wilhelmsson, 2008). High consumer bargaining power can negatively impact the company’s margins. In China, in the urban centers, buyers are well informed and they have high bargaining power because of knowledge of the market and availability of other reasonable accommodation due to the high competition in the industry. Considering the above-mentioned facts buyers can exercise moderate to high bargaining power.</p>
<h2 align="justify">Bargaining Power of Supplier</h2>
<p align="justify">The bargaining power of suppliers depends upon various underlying factors related to the industry and its supply chain. Usually, suppliers have moderate to high bargaining power in the industry. The supply chain of the property development industry consists of two main sources of supply, the first being the raw material and the other one is then skilled labor. Large scale companies usually have vertically integrated supply chains and if they need material outside of their integrated structure they can avail bulk purchase discounts to lower their cost. On the other hand, labor, specifically skilled manpower, has higher bargaining power, because they are in short supply at any particular time. Labour unproductivity can cause delays and increase cost, and the main reason for that is the poor labor surveillance and the unskilled craftsmen (Ameh &; Osegbo, 2011). Cumulatively, suppliers in the real estate development industry can exert moderate to high bargaining power</p>
<h2 align="justify">References</h2>
<p>Ameh, O.J., &; Osegbo, E.E. (2011). Study of relationship between time overrun and productivity on construction sites. International Journal of Construction Supply Chain Management 1 (1). 56-67. DOI 10.14424/ijcscm101011-56-67<br />
DNB. (2021). China Gezhouba Group Company Limited. Company profile. Available at: https://www.dnb.com/business-directory/company-profiles.china_gezhouba_group_company_limited.8c182fc902b4f5f2130005ab7fd9015b.html#:~:text=China%20Gezhouba%20Group%20Company%20Limited%20has%2039463%20total%20employees%20across,billion%20in%20sales%20(USD).<br />
ENR. (2015). The 2015 Top 250 Global Contractors. Available at: https://www.enr.com/toplists/2015_Top_150_Global_Contractors1<br />
Nikkei Asian Review. (2021). Poly Developments &; Holdings Group Co., Ltd.. Available at: https://asia.nikkei.com/Companies/Poly-Developments-Holdings-Group-Co.-Ltd<br />
Nikkei Asian Review. (2021). Swire Properties Ltd. Available at: https://asia.nikkei.com/Companies/Swire-Properties-Ltd<br />
Poly (2021). Business. Real Estate Development. Poly Development. Available at: https://www.poly.com.cn/english/1919.html<br />
PR Newsire. (2021). Global Real Estate Market Report 2021: Market is Expected to Grow from $2687.35 Billion in 2020 to $3717.03 Billion in 2025 &#8211; Forecast to 2030. Available at: https://www.prnewswire.com/news-releases/global-real-estate-market-report-2021-market-is-expected-to-grow-from-2687-35-billion-in-2020-to-3717-03-billion-in-2025&#8212;forecast-to-2030&#8211;301250151.html#:~:text=The%20global%20real%20estate%20market,2%25.<br />
Valence, Gerard. (2012). The Significance of Barriers to Entry in the Construction Industry. Australasian Journal of Construction Economics and Building. 7. 29. 10.5130/ajceb.v7i1.2975.<br />
Wilhelmsson, Mats. (2008). The Evidence of Buyer Bargaining Power in The Stockholm Residential Real Estate Market. Journal of Real Estate Research. 30. 475-500.</p>
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