Porter’s Five Forces & competitive advantage. As a leading construction company in the UAE, Arabtec’s major commitment is to build on experience and to expand using our capabilities and expertise in building high rise development, hotels, residential developments, commercial development, industrial projects, airport developments, stadiums, villa communities, entertainment and mixed use developments in the MENA region, Russia and across the globe.

1. Low profitability of the industry, Arabtec is well positioned. The PMT decide to diversify the business with different products (oil and gas,
power, infrastructure, affordable housing) and different geographical areas (India, North Africa)
Alessandro Rinaldi
Porter’s Five Forces of Competitive Position
Arabtec Construction L.L.C.
Competitive Rivalry: Strong
 Excess capacity-- fall in demand
 Competitive tender to win a
contract
 Lowest fees to win the contract
 Similar construction products
 Overcrowded market
Bargaining Power of Supplier: Weak
 Backward integration into the business of
suppliers
 Construction materials available from many
suppliers
 Switching costs are low
Threat of Substitute Products or Services: Strong
 New methods and processes
 New methods cost less than traditional ones
 Low switching costs: new project= new consultants
Bargaining Power of Buyers: Strong
 Clients adopt a information
technology system for decision
making
 Clients can postpone projects
Threat of New Entrants: Weak
 No loyalty, the lowest bid wins
 Low switching costs: new project = new consultants and suppliers
 High Capital requirement
 High risk of fail the target (time, cost, scope)
 Difficulties to have skilled workers