If you want to know what an industry will look like in the future one of the best models you can use is: Porter’s 5 forces
Published by Michael E. Porter of Harvard University in 1979, these 5 forces have proven to be a great way to analyse the attractiveness of an industry.
So, what are these ‘forces’? And what does it mean for the decorating industry?
The five forces:
- Competition in the Industry.
- Potential of New Entrants into the Industry.
- Power of Suppliers.
- Power of Customers.
- Threat of Substitute Products.
Let’s break down each force.
Competition in the industry
There are two main competitors for decorators. Other decorators and DIYers.
Dulux Academy recently found that the average age of a decorator in the UK is 50, and that 66% of UK decorators will retire in the next 10 years.
In terms of the DIY market, we live in an ageing society. More and more people are physically incapable of doing their own decorating. And the younger generations are proving to be less willing to even try.
This means the market is growing and the competition is shrinking. A great start!
Potential of New Entrants into the Industry
What are the barriers to entry for becoming a painter and decorator in the UK? Some would say not much. You can pick up some brushes from a local shop and start advertising your services on social media for virtually nothing.
However, there is a new breed of decorator emerging.
Decorators who spray and use dustless sanders.
These decorators have £thousands worth of kit. So, whilst the barrier to entry of the decorating market might be quite low, you can separate yourself from new companies by investing in your skills and equipment.
Power of suppliers
If there were only a few places to buy paint and sundries, then those suppliers could easily increase their prices and reduce the profit margins available to decorators.
Fortunately, we are in a market full of suppliers. This means prices stay competitive and quality remains high.
Power of customers
As I’ve already mentioned, the number of decorators in the UK is decreasing and the market size is growing. This means your average customer won’t have the power they once did.
Although there are no real barriers for someone to switch from one decorator to another, there is a shortage of supply.
More power to the decorators!
Threat of substitute products
This final force doesn’t have much of an impact on the decorating industry either. There are currently no real substitutes to decorating your home.
Ok, if you only offer painting services and wallpaper becomes wildly popular you might see a dip in demand.
But in general, there are no substitute products/services when it comes to decorating a home.
Maybe one day we’ll all have digital walls that you can change the colour of with the touch of a button?
But until then, I think the industry is pretty safe from substitutes.
In my opinion the decorating industry is far from doomed.
In fact, I think it is one of the best industries anyone could be in right now. Especially young people.
If you invest in your skills and equipment (spraying / dustless sanding / marketing etc) I firmly believe that in 10 years’ time decorators could be earning so much money they won’t know what to do with themselves.
PS: If you’re in the 66% of decorators due to retire in the next 10 years then don’t feel down. This could be the perfect opportunity for you to come off the tools and manage a team of younger decorators. The buoyancy of the market will make this easier than ever. It could well be the perfect pension plan for you.
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