Pulte Homes: Business Profile Pulte

Pulte Homes: Business Profile

Pulte Homes is one of the strongest contemporary examples of corporate America. As a corporation, Pulte Homes has some impressive statistics to boast about. In 2003, the average price of a home that it sold was $241,000. The average time to build a new home hovered around 120 days, the company installed 60,000 bathtubs in 2002, and was capable of completing one new home every 3.3 hours every day of the year (Lee 130). In short, Pulte Homes is an exceptionally strong Fortune 500 company with a proven track record that stretches back more than fifty years. The purpose of this profile is to provide information regarding some of the more salient characteristics of the company. These characteristics will include background information on the company, its corporate mission, some data on how the company is organized, the way that Pulte Homes has positioned itself in the industry, and some of the primary operating strategies of the company. In all, this information is meant to provide a glimpse into the workings of Pulte Homes as a model for a successful corporate endeavor.

Pulte Homes is a home construction corporation that has been in operation for more than fifty years. Currently, the company operates in more than forty markets throughout the United States (Leger par. 2). The company's founder, William Pulte, now 73, is still the active chairman of the corporate board. He has established that the primary mission of the company should be that Pulte Homes will always know it buyers and create housing products that meet specific needs. Pulte was quoted as saying, "It you keep an eye on who the customer is and what they want, it is not hard to see your company grow" (Lee 130). While this mission may seem relatively simplistic, it is nonetheless a solid purpose statement on which to see a corporation grow. Pulte has made a career and built a powerful industry leader by paying close attention to the needs of his customers. In fact, this can also be considered one of the primary operating strategies of the company.

In addition to conservative financial policies ("Fitch Rates" par. 6), Pulte Homes has a number of specific operating strategies that have been instrumental in its industry success. The first is creating a business built on the idea that it is crucial that the corporation decipher consumer psychology. It is not enough to simply build new homes, according to this business philosophy; rather, Pulte Homes has taken the consumer research to new, obsessive levels. For example, most other homebuilders in the industry rely on four primary home categories for marketing purposes -- first time buyers, first move ups, second move ups, and retirees. Contrary to this, Pulte Homes has developed eleven different consumer categories that allow the company to better predict what consumers will want and cater to those needs specifically in the types of new homes that are offered (Lee 130). Pulte Homes relies on this extensive consumer research when it finds markets in which demand exceeds supply.

For example, the company recently identified growing demand in suburban San Francisco. Demand for housing was coming from young professionals who were first time buyers specifically looking for stylish, maintenance-free homes. Recognizing this market need, Pulte Homes purchased a former fruit processing plant and began the process of converting it into 159 new row homes and lofts. Of the forty-one original units that came available for sale in June 2003, thirty were purchased by November of that same year (Lee 130). This is a significant number in such a short span of time and speaks to the great effect of Pulte Homes' market research. In addition to consumer research, though, Pulte Homes is also driven by the operating strategy that calls for a reduction in production time. It seems that producing 3.3 homes per hour, every hour of the year, isn't fast enough for the company. Accordingly, Pulte Homes is always developing new means to shorten home production time. These methods include some prefabrication work at company-built factories. For regional construction, these factories provide many prefab items, including precast concrete for foundations, prefab interior and exterior walls, and prefab interior fixtures like cabinetry (Lee 130). The result of this kind of production is that Pulte Homes is able to greatly reduce cost and time in the manufacture of new homes.

But becoming an industry leader isn't all about consumer research and decreasing production lead-time (though both of those factors help). Positioning within the market is also key in order to overcome competition from other home construction firms. In that regard, Pulte Homes has benefited not only from strong economic conditions -- low mortgage rates that have spurred on new home construction, for instance -- but also from its broadened product offerings ("Fitch Rates" par. 3). This might seem like an odd statement to make. After all, in the home construction industry, how many new products can one company develop? In the end, construction is always of homes. Nevertheless, Pulte Homes has managed to create new product offerings, particularly by creating new types of homes that will appeal to different market segments.

For example, Pulte Homes recently acquired Del Webb in an effort to reposition itself within the industry by diversifying its profile and expanding its product offerings to the active adult segment ("Fitch Rates" par. 5). Del Webb had previously been one of the leading manufacturers of homes for seniors in the nation. When Pulte Homes acquired the Del Webb name, it bought a foothold into an incredibly large and lucrative market segment. Of course, this acquisition did not come cheap. Major industry growth, however, permitted Pulte Homes to acquire Del Webb for $1.7 billion in July 2001. With that acquisition, Pulte Homes became one of the ten largest home manufacturers in the country who collectively control 20% of the market. This strong position is excellent for Pulte Homes, as analysts have predicted that those top ten manufacturers will account for 40% of the market by 2010 (Lee 130).

Much of the external success of Pulte Homes can be attributed to its internal organization. Pulte Homes currently employs about 13,000 employees in twenty-six U.S. states. Internally, the company is organized in an entrepreneurial fashion at the division level, with greater autonomy being afforded the lower levels of the organization (Leger par. 3, 5). In addition, Pulte Homes has internal leadership programs that are designed to help encourage internal advancement. The whole of the corporate culture is one constructed around the value of teamwork. However, that teamwork is weighed against the "bottom line" in order to only continue organizational practices that effectively promote the company (Leger par. 13-14). Pulte Homes continuously analyses its internal structure and organization so it can be fine-tuned to respond and adapt to prevailing market and industry trends. This adaptability and introspective nature has had a profoundly positive effect on the attitudes of employees as well as the effectiveness of the organization.