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<p align="justify">Saint-Gobain is a multinational corporation based in La Défense on the outskirts of Paris, France. It was founded in 1665 as mirror manufacturing, and now the company produces a variety of high-performance, construction, and other materials. The primary industry it operates in is construction materials. The company has a presence in 70 countries, with more than 167,000 employees (Saint-Gobain, 2021). Saint-Gobain&#8217;s leading business sales are in the construction market, with our 75% business coming from the construction sector. It&#8217;s mainly for new residential construction and renovation of the industrial market. The other section where the company has expertise includes diverse automotive, aeronautical, health, security, and beverages (Saint-Gobain, 2021). The company has a comprehensive sustainability policy. The company is committed to Net Zero Carbon; the company has long rooted it in its long history to reduce carbon footprint; the company provides its customers with options to rescue their carbon footprint and impact the environment. Porter&#8217;s five forces model is a valuable tool for assessing the threat and opportunities Saint-Gobain faces and adapting to the dynamic market changes proactively.</p>
<h2 align="justify">Competitive Rivalry in the Market</h2>
<p align="justify">The building material industry is perceived to be in moderate to high competition. Companies are competing for the market share in the specific domain related to their expertise. Overall, there is moderate to intense competitive rivalry in the industry. The global construction materials market is expected to reach $1.5 trillion by 2027 (Global News Wire, 2020). The major players in the industry are Saint-Gobain, Armstrong World Industries (AWI), LafargeHolcim, and Cemex. Saint-Gobain is the largest construction materials manufacturer globally based on sales (Raynor de Best, 2021). In 2020, Saint-Gobain recorded a revenue of $47.6 billion and a profit of $1.5 billion (Fortune, 2021). AWI has reported gross revenue of $0.93 billion and a gross profit of $333.1 million in 2020 (Armstrong World Industries, 2021). In the same financial year, LafargeHolcim reported revenue of $24.7 billion (Forbes, 2021), and Cemex reported gross revenue of $12.9 billion (Forbes, 2021). Therefore, the industry is highly competitive.</p>
<h2 align="justify">Threat of Substitutes</h2>
<p align="justify">The threat is perceived to be high when there are more options for the consumer to choose from, and the alternative is better in quality and offers better price and services. The risk of substitutes in the construction material industry is considered to be low. The basic building materials see a limited chance of being replaced by other products or technologies. The companies are incorporating green construction and sustainability in their products to meet that aspect of the industry. However, the finished goods sector sees a lot of innovation, and companies operating in that sphere keep pace with the evolution. The incentives by the government may prove the catalyst for the adaption of &#8216;green&#8217; construction and will push the industry towards a sustainable product mix. Government regulatory and incentive programs may drive positive change effectively and efficiently to increase sustainable construction and resultantly reduce carbon emission (Yin et al., 2018). However, traditionally evolution process in this industry takes time. Considering the above, the threat remains low.</p>
<h2 align="justify">The Threat of New Entrants</h2>
<p align="justify">The threat of new entrant is perceived to be high when there are supportive regulatory environment, more competition and access to financing. Other inherent barriers are associated with new entrants in the construction materials production industry, such as regulations, high capital requirement, assets outlay, and acquisition of technology. Regulations vary from country to country; however, usually, there is moderate regulatory compliance required in the industry. The major hurdle is the nature of industry regarding financing; it is capital intensive, and a significant amount is needed to start operations. Essential capital requirement is an effective deterrent for the newcomers (Rasheed, 2004). Another barrier is the acquisition of technology and expertise; to operate at the scale industry is operating this act as a hurdle. Therefore, the threat of new entrants remains low.</p>
<h2 align="justify">Bargaining Power of Buyers</h2>
<p align="justify">The consumers&#8217; power depends upon the underlying factors, including consumers&#8217; concentration, the importance for the business, and competition in the market. There are plenty of options available for consumers in the market to purchase the products from. Other factors play a critical role in consumer decision-making; one of them is the availability of financing. The high rate of return (interest rate) is indirectly proportional to the growth of the mortgage portfolio (Njongoro, 2013) and thus further impacts the construction materials industry. Therefore, consumers&#8217; ability to purchase will result in industry growth. Consumers are not concentrated and accordingly cannot negotiate prices; however, large-scale developers can seek bulk discounts. Overall, consumers have moderate bargaining power.</p>
<h2 align="justify">Bargaining Power of Suppliers</h2>
<p align="justify">Suppliers&#8217; power depends upon certain underlying factors, including the importance of suppliers&#8217; goods, suppliers&#8217; concentration, and the nature of suppliers&#8217; products, and the risk of forwarding integration. The large corporations in the industry already have vertically integrated operations; they control the supply chain to avoid material disruptions. Other materials that are not covered in their supply chain they procure from multiple vendors. Thus, dual-sourcing reduces the risk of supply chain disruption (Tomlin, 2009). Other significant inflows are from equipment providers and specialist artisans working on the products. The equipment providers are usually industry independent thus, hold moderate bargaining power. At the same time, skilled craftsmen have a high bargaining power that is directly proportional to their importance. Therefore, buyers&#8217; have moderate to high bargaining power.</p>
<h2 align="justify">References</h2>
<p style="text-align: left;" align="justify">Saint-Gobain. (2021). Group. Available at: https://www.saint-gobain.com/en/group<br />
Saint-Gobain. (2021). Our Solutions. Available at: https://www.saint-gobain.com/en/our-solutions<br />
Global News Wire. (2020). Global Construction Materials Industry. Available at: https://www.globenewswire.com/news-release/2020/07/15/2062838/0/en/Global-Construction-Materials-Industry.html<br />
Raynor de Best. (2021). Leading manufacturers of construction materials worldwide in 2019, based on sales. Available at: https://www.statista.com/statistics/314988/leading-buildinc-material-manufacturers-worldwide/<br />
Armstrong World Industries. (2021). Investors. Annual reports. Available at: https://armstrongceilings.gcs-web.com/static-files/baa42fcc-416e-4ca2-aa5d-98b3caf90d80<br />
Yin, B. C. L., Laing, R., Leon, M., &; Mabon, L. (2018). An evaluation of sustainable construction perceptions and practices in Singapore. Sustainable cities and society, 39, 613-620.<br />
Rasheed, H. S. (2004). Capital access barriers to public procurement performance: The moderating effects of ethnicity, gender and education. Journal of Developmental Entrepreneurship, 9(2), 22-43.<br />
Njongoro, J. N. (2013). The effect of mortgage interest rate on the growth of mortgage financing in Kenya (Doctoral dissertation, University of Nairobi).<br />
Tomlin, B. (2009). Impact of supply learning when suppliers are unreliable. Manufacturing &; Service Operations Management, 11(2), 192– 209.<br />
Fortune. (2021). Saint-Gobain. Available at: https://fortune.com/company/saint-gobain/global500/<br />
Forbes. (2021). LafargeHolcim. Available at: https://www.forbes.com/companies/holcim/?sh=5bd8547812fb<br />
Forbes. (2021). cemex. Available at: https://www.forbes.com/companies/cemex/?sh=308ed9635121</p>
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