Publications
Publications
- July 1989 (Revised May 2004)
- HBS Case Collection
Colonial Homes
By: David E. Bell
Abstract
Colonial Homes supplies a complete raw materials package to build entire homes. The price of the package is guaranteed at the signing of the sales contract, while delivery (and payment) are not effected for up to six months. In an effort to reduce its exposure to fluctuating lumber prices, Colonial sources the package (mostly lumber) through the only lumber yard that also offers a six-month price guarantee. The lumber yard recently raised its prices, prompting Colonial to look elsewhere (with no or lesser fixed price guarantees).
Keywords
Customer Value and Value Chain; Contracts; Price; Price Bubble; Fluctuation; Monopoly; Problems and Challenges; Sales; Accommodations Industry; Real Estate Industry
Citation
Bell, David E. "Colonial Homes." Harvard Business School Case 190-008, July 1989. (Revised May 2004.)