A Housing industry analisys using Porter's models

1. HOUSING CLUSTER IN THE
METROPOLITAN AREA OF
THE CITY OF PUEBLA
Berenice Dominguez
Berenice Meneses
Sara Nolasco
Miguel Angel Lezama
Arturo Vieyra
Jose Angel Raynal Gutiérrez

2. ABSTRACT
The Housing Industry in Puebla has not been an important actor
in the development of the Housing Industry in Mexico, in spite
of its market size, potential, geographical location, benevolent
weather and favorable resources. This essay pretends to
analyze the industry, its competitiveness, and the factors that
promote or stager its evolution, in order to identify the required
steps to form a housing cluster in Puebla and to transform the
local industry into a relevant competitor in Mexico.

3. HOUSING INDUSTRY IN LATIN AMERICA
• Housing deficit in the continent
is around 22.2 millions houses.
• Most countries have problems
with poor urban development.
• There is a big deficit (17.2%)
that is getting worst with
population growth (8.7%
projected from 2011 to 2020).
Projected Population Growth
Thousands of persons

4. HOUSING INDUSTRY IN LATIN AMERICA
Poverty vs Households deficit
% households deficit
% poor households

5. HOUSING INDUSTRY IN MEXICO
• Mexico has an estimated
deficit of 4.1 million homes
(17.3%).
• 3.4 million homes require
Government’s subsidies.
• National Housing Commission
(CONAVI) coordinates the
efforts between the various
financial institutions that
promote housing.
Not EAP
29
Total Households in millions
26.1
Potential
Bank
Borrower
17.3
8.1
4.1
3.4
2.9
8.8
9.2
4
0.7
Total Households
EAP
No
Housing
Fund
Housing
Fund
Not
Needs
Home
enough
Income Enough
Income
Has
Home
Needs
Gov. Help

6. HOUSING INDUSTRY IN MEXICO
• National Housing Organisms (ONAVIs)
INFONAVIT
CONAVI
SHF
ABM AHM
Sociedad
Hipotecaria
Federal
Asociación
Hipotecaria
Mexicana
Fondo de la
Vivienda de los
Trabajadores
Afiliados al ISSSTE
Asociación
de Bancos
de México
Instituto del Fondo de
la Vivienda para los
Trabajadores

7. HOUSING INDUSTRY IN MEXICO
• The Housing Industry is
consolidating, with 10 companies
owning 30.58% of the market in
2010 (compared with the 21.3%
market share from the 10 biggest
companies in the U.S. in 2010).
• Four of this 10 companies
compete in Puebla.
• Puebla’s housing companies do
not compete outside the state.

8. FIVE FORCES ANALYSIS - PUEBLA
Potential Entrants
1. Land acquisition and financing is a barrier.
2. Market is attractive for competitors from other
Rivalry
regions.
3. Low start up costs.
1. Low rivalry due to deficit.
2. Prices tend to increase over time.
3. Competition is for credits and
subsidies in low income houses.
Suppliers
1. Land owners enforce terms and
prices.
2. Construction suppliers have low
bargaining power.
Buyers
1. Sophistication is increasing.
2. Price sensible to credit capacity.
3. Low fidelity to marks.
4. Customization is valued.
Substitutes
1. Self-construction limited by credit options.
2. Mobile houses are not accepted.

9. VALUE CHAIN ANALYSIS
Marketing
Design and Projects
Licenses Procurement
Financial Planning, HR, other Adm.
Land Construction Sales Service
support
activities
primary activities

10. VALUE CHAIN FLOW CHART
Venture
Capitals
Land
Edification
and
Infrastructure
Sales
Service
Design Marketing
Licenses
Procurement
Specialized
credit
institutions
ONAVIs
Community
Administration

11. CLUSTER MAP
Housing Development Companies
70 in CANADEVI
4 Large Companies from other states
Land Construction Sales & Mkt
Government
Urban Planning
Departments
Infrastructure
Ministers
Enviromental
Ministers
Universities
BUAP
ITESM
UPAEP
UDLAP
IBERO
UVM
ANAHUAC
Related Clusters
Contractors
Cement &
Concrete
Producers
Steel
Distributors
Other
Materials
Distributors
Notaries
Valuation
Agents
Real State
Brokers
Quality
Control Labs
Quality
Supervisors
Design Firms
Advertising
Companies
Enviromental
Firms
Institutions for Collaboration
CANADEVI
Related Clusters
Assoc.
Equity Financing
Venture Capitals
Private Investors
Debt Financing
ONAVIs
“Bridge” Credits (SHF)

12. DIAMOND ANALYSIS

13. DIAMOND ANALYSIS – F.C.
• Fourth biggest Metropoli (2.5 million
people)
• Known as the “Gate to the
Southeast”
• State’s GNI is 3.6% of Mexico’s GNI
and ranks 7th among states, but GNI
per capita ranks 25th.
• 31.1% of the population is below 14
years old.
• Ranks among the worst in water and
sewage services.
• Has an ancient tradition of
construction workers and enough
university level professionals.

14. DIAMOND ANALYSIS – F.S.R.
• Puebla has its own chapter in the National
Chamber of Housing Developers
(CANADEVI) with 70 members.
• CANADEVI represents the industry with the
ONAVIs and the Goverment, most of its
agenda is about defending the industry
interests and promoting the sustainable
development of urban areas.
• Four of the Six biggest housing companies
have operations in Puebla (Geo, Ara,
Homex and Sadasi).

15. DIAMOND ANALYSIS – D.C.
• The demand in the area of Puebla is
estimated in 150,000 houses among
private workers (INFONAVIT), and
around 300,000 including bureaucrats
and independent workers.
• Less than 10% of this demand is
covered each year. INFONAVIT is the
main ONAVI financing house sales.
• This demand grows at a rate of 4.5%
each year.
30,000
25,000
20,000
15,000
10,000
5,000
0
Potential demand by income
> 2 vsm 2 a 2.6
vsm
(only Infonavit) 2011
2.6 a 4
vsm
4 a 7 vsm 7 a 11 vsm > 11 vsm
Puebla Cuautlancingo San Andrés Cholula
San Pedro Cholula Amozoc

16. DIAMOND ANALYSIS – D.C.
15,000
14,000
13,000
12,000
11,000
10,000
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Credits
Number of credits for New Houses in Puebla 1990-2011
INFONAVIT FOVISSSTE
SOFOLES BANCA
SHF SHF PROSAVI
CONAVI OTROS

17. DIAMOND ANALYSIS – D.C.
12
10
8
6
4
2
0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Number of credits for 1,000 inhabitants
Credits for New Houses per capita (only Infonavit) 1990-2011
BAJA CALIFORNIA CHIHUAHUA
PUEBLA QUERETARO
SINALOA TAMAULIPAS

18. DIAMOND ANALYSIS – R.S.I.
• Strong suppliers chain that compete
fiercely.
• Puebla has chapters in most
professionals associations.
• Lacks from an Institute for Urban
Development Planning (IMPLAN).

19. DIAMOND ANALYSIS – G
• The metropolitan area expands in 38
municipalities from Puebla and
Tlaxcala with no coordination among
them.
• Land development is sometimes
limited by water and sewage
infrastructure.
• Land property is fragmented, most
owners are “ejidatarios”, with lots
below 3 acres.

20. DIAMOND ANALYSIS – CH
• Safer city.
• The 2nd best public university and
seven well recognized private
universities.
• Has all the ammenities of a big city.
• Good weather, no heating or air
conditioning systems required.
• Growing investments in the
automotive industry.
Drug-related murders

21. REFERENCES
ORGANISMOS NACIONALES QUE DEFINEN LA INDUSTRIA DE LA VIVIENDA
Comisión Nacional de Vivienda www.conavi.gob.mx
Instituto del Fondo Nacional de la Vivienda de los Trabajadores www.infonavit.gob.mx
Fondo de Vivienda de los Trabajadores del ISSSTE www.fovissste.gob.mx
Fondo Nacional de Habitaciones Populares (Fonhapo) http://fonhapo.gob.mx/
BANCOS E HIPOTECARIAS
Sociedad Hipotecaria Nacional www.shf.gob.mx
Asociación de Hipotecarias de México www.ahm.org.mx
Asociación de Bancos de México www.abm.org.mx
CAMARAS
CANADEVI. www.canadevi.org, www.canadevipuebla.com.mx
DESARROLLADOR SOCIAL DE VIVIENDA
Hábitat para la Humanidad México, A.C., www.habitatmexico.org/
INSTITUCIONES PARA LA COLABORACIÓN - IFC´s
Consejo Nacional de Evaluación de la Política de Desarrollo Social
http://web.coneval.gob.mx/Paginas/principal.aspx#.UHcnecWR-So
Organismos en gobiernos estatales. http://solucionesdevivienda.conavi.gob.mx/guiageneral/orevis
Banco Mundial. www.obrasweb.mx/vivienda/2012/10/04/el-banco-mundial-respalda-viviendas-ecologicas-de-
urbi
Consejo Nacional de Organismos Estatales de Vivienda, A.C.,www.conorevi.org.mx/default.aspx
Fideicomiso privado constituido por empresarios mexicanos.www.provivah.org/
Fundación HOGARES, www.fundacionhogares.org/quienes_somos/misionvision/
Provive, www.provive.mx/index.html
Compartamos Banco, www.compartamos.com/wps/portal/Compartamos
CONAVI concentra información del sector vivienda en su página: http://sniiv1.conavi.gob.mx/sniiv/cgi-bin/
sniiv/sniiv2.html

22. GRACIAS…