Profit Pools in the Green Thesis

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It isn't one size fits all anymore, either, thanks to modern computer-design methods that let architects vary the prefab houses the way Lego blocks can be moved around. More than that, though, architects think the new avant-garde looks can win over upscale buyers craving a touch of high design for their abodes" (Jeffrey & Keats 2004). Modular homes are both unique and inexpensive -- a perfect option for new home buyers wishing to keep costs down in an uncertain market yet to amp up the beauty of their structures. They are also good options for seniors, with downsized 'empty nest' dreams who want less home to support, but do not wish to go into a senior community.

Profit pools exist at every juncture of the home industry, from green and customized construction, to improvements and modifications, even to demolitions -- the debris from gutted structures can be recycled to create new ones. The concept behind profit pooling is not to miss an opportunity and to target specific demographics at different value change junctures.

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"Segment profitability may, for example, vary widely by customer group, product category, geographic market, and distribution channel. Moreover, the pattern of profit concentration in an industry will often be very different from the pattern of revenue concentration" (Gadiesh & Gilbert 1998). Some areas may be more interested in new green homes, others in modifications if the market is saturated. Some areas like the desert may wish to use 'gray water' to minimize water use, others can benefit from solar heat, while still others from insulation to reduce heating costs. Knowing the market and knowing the value chain are essential to unlocking the key to this challenging, buyer-driven home market.

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