Product Life Cycle of the Manufactured Home Industry

Abstract

Residential construction consumes an estimated 26 percent of the total U.S. wood harvest and thus plays an important role in the forest products value chain. While being a relatively small part of the U.S. residential construction market, the factory-built residential housing industry, originating from manufactured homes (e.g. mobile homes), is embracing emerging industry segments such as modular or panelized homes. Since indications exist that factory-built home production is slated to gain a more prominent role in the U.S. construction markets at the cost of traditional stick-built production, the factory-built home industry sub-segment is of considerable importance to the forest products industry. This research looks at manufactured home producers as a benchmark for analyzing the current economic state of the industry and discusses competitive strategies. The analysis concludes, through macroeconomic modeling, that manufactured homes are in the declining stage of their product life cycle due to changes to the U.S. residential construction sector and the factory-built home industry and by advancements of rival industry-segments. As market share continues to decline, firms operating in this industry-segment seek to either hedge their losses through product diversification strategies or remain focused on strategically repositioning the manufactured home segment.