Lennar's Industry Value Chain

Lennar’s industry value chain, as a homebuilder, extends from land developers to the consumers purchasing houses. Land developers purchase undeveloped land from other land developers or the government and develop that land into parcels or lots that are ready to be sold to homebuilders. The value addition in this first stage mainly includes the costs and expenses of clearing vegetation and any other natural or manmade objects that would get in the way of a strong foundation on which to build a home. Once the parcels are purchased by home builders, construction, whether residential, commercial, or retail spaces, is ready to commence. Construction can be done in-house by the homebuilders, or homebuilders can outsource the construction to a construction
company. Construction is where the most value is added to the home as this is where all materials and labor of the home is performed, so this is the step where cost-driven or price-driven strategies are implemented. After the home is built, it is up to the agency, their marketing, and their past performance to incentivize customers to purchase the homes. The homebuilders are often agencies who contract to construction companies, and this category of homebuilders includes Lennar.