Kb Home Business Level Strategy

KB Home

Business level Strategy

The company is a builder of houses and selling them to people. This is a company which functions in United States and France. They are now of the largest builders of homes in United States. The company was earlier called Kaufman and Broad Home. The houses built by them are for individuals buying houses for the first time or families which are now looking for a bigger house. They are building houses in 392 communities in Arizona, California, North and South Carolina, Colorado, Florida, Georgia, Illinois, Nevada, New Mexico and Texas. The houses that it builds are in size from 1,200 square feet to 3,900 square feet and the average price for which they sell are $206,500. (KB Home (NYSE: KBH): (www.hoovers.com)

They have some subsidiaries and the majority owned subsidiary of Kaufman and Broad SA builds single family homes, condominiums, and commercial buildings in France. The company also owns KB Home Mortgage which provides the customers with mortgage assistance, financing and home insurance. The company sold a total of 31,646 homes during 2004. (KB Home (NYSE: KBH): (www.hoovers.com) The company has grown through getting more companies. According to Forbes, this is a "Homebuilder with domestic operations in the following regions: West Coast, Southwest, Central and Southeast. Also provides mortgage banking services to the majority of its domestic homebuyers through its wholly-owned subsidiary, KB Home Mortgage Company." (KB Home (NYSE: KBH): (www.forbes.com)

2. The company has a specific area of operations which is limited and this can be found to be similar to all other such housing companies. Naturally all their other activities are also found to be limited to those areas that it operates/functions in. The market segment which they are found to be operating in is also being clearly defined by the amount of the sizes of the houses that they sell. Regarding the aspect of marketing, the question is that of local activities and also getting a good reputation for the same. However it should be noted that they do not seem to have succeeded much in that aspect. (Arlington residents sue KB Home); (KB Home to Pay $2 Million Penalty for Alleged Violations of FTC Order) This company's prime area of market is the new home buyer and that too among the professionals and workers having their families, who are situated in medium-sized developments and which are considered to be close to major metropolitan areas. (KB Home Customers Find FTC Penalties Inadequate)

The financial strategy is to be the same as that of all other housing companies and they also have a separate company for the purpose of mortgage banking services for its customers as has been already mentioned. The operations in terms of elements like supply chain, outsourcing and location of operations are clearly based/focused on areas wherein they have built up their strengths over a considerable period of time. The company began as Kaufman & Broad in 1957. (KB Home Customers Find FTC Penalties Inadequate) However over the last five years, the Earnings per share of the company had grown by 22.29%, it has had dividend growths at the rate of 26.41%. Thus it is considered as a company with have a built in speculative element of streak. This is also being shown by the price of the share which is $75.91, whereas the book value is only $24.66. (KB Home (NYSE: KBH): (www.forbes.com) After all, one should understand that the real estate prices do not shoot up and high prices may exist due to some speculative influences which are trying to take over the company and this is being done without evaluating the consequences. There are several angry homeowners who have used the Web for the sake of protest, and use sites having names like KB Homes Suck and KB Home Stink in order to tell their stories.

3. The answer for all home builders is the same and the definition has been given here for this organization as "It engages in the acquisition and development of land primarily for residential purposes." (Profile: KB Home) Thus the main objective here in terms of collecting titles to land that would be suitable for development. This company also takes up land which is unsuitable and thus gets sued by one of the colonies it built in, like that of Arlington with 64 owners taking up the entire action and demanding an amount of $65 million as being reported on 9 November in the year 2001. (Arlington residents sue KB Home) This was bomb contaminated land and sold to the buyers without information.