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					                                                Customer Analysis
   Segments

           Lubbock

                     84,034 Housing Units

                              Owner occupied 43,290

                              Rental Occupied 34,327

                              Average home sale price $69,500

           New Housing Movement

                     40% of all renovation in America included some green features, mostly windows and
                      heating/cooling systems

                     Green homes will account for 10% of all building starts in America by 2010

                     New green homes worth $20 billion in that year

           “Green” Houses

                     One of the greenest houses in America cost 23% more to build than traditional homes

                     But studies have shown that the cost of green homes is around 3-5% more than homes
                      that are not green

           Adobe homes

                     Adobe homes cost about $85/sq ft to build

                     Today's bricks are 14 inches long, 10 inches wide, and 4 inches high

                     The average cost of a brick is about 60 cents, wall only makes up about 5% of cost/ sq ft

                     Made with straw to make the dried mud more weather resistant, and also have a small
                      bit of asphalt mixed in to stabilize them

   Motivations

           90 percent of people surveyed by the American Institute of Architects in 2006 said they'd be
            willing to pay $5,000 more to build or buy a house that would use less energy or protect the

           Non-toxic: materials are completely natural and do not out-gas toxic chemicals

           Sound resistant: an important feature in high-density neighborhoods, and residential areas
            adjacent to construction zones
                    Fire resistant: earthen walls do not burn

                    Insect resistant: the walls are solid and very dense, discouraging insects

                    Mold resistant: there is no cellulose material such as in wood and drywall that can host mold

                    Save 70% - 90% of the energy required to heat and cool home

      Unmet Needs

                    In 2007, the average U.S. household will spend more than $2,000 on residential energy, a 35%
                     increase over 2001 expenditures, and a 51% jump since 1997.

                    Electricity: The average household's annual bill will be $1,210, which is a 39% jump since 1997.

                    Natural Gas: The average household that uses natural gas will spend $986, which is a 70% jump
                     since 1997.

                    Fuel Oil: The average home that uses fuel oil will spend $1,439, which is a 102% jump since 1997.

                    Propane gas: The average home that uses propane gas will spend $500, which is a 62% jump
                     since 1997.

                                                    Customer Analysis


   •   Retail

       There are about 657,000 retail buildings in the U.S. that altogether consume approximately $21 billion
       worth of energy annually.


                     1.   Average new building construction: $13-17 million

                     2.   Pledged to invest $500 million a year in new efficiency technologies and eliminate 30
                          percent of the energy used across all of its thousands of stores.

   •   Storage

           -Climate control in storage buildings is becoming an obsolete luxury

           -Speed, cost of construction, and climate stabilization -> would be an easy market to enter

      Greenhouse
           -3 world countries in need of inexpensive, reliable food supply
              - All farmers are constantly fighting the effects of weather on their crops

              - Climate controlled environment could yield important crops in places where they otherwise could
              not be grown


       Building and Energy Costs

              -Together, heating and cooling systems consume approximately 38 percent of the energy used in
              retail establishments

              - Wal-Mart Spokesperson Kory Lundberg said their goal was "to design and build a prototype store
              that was 25 percent to 30 percent more energy efficient than our stores had been up to that point.”

              -Present economy is pushing retailers and wholesale distributors to take much deeper consideration
              in future building and utility costs

              - Many corporations striving for that “Green Image”

    •   Eco-conservation

              -A severe cold wave damaged 50-70 percent of India’s keenu fruit crops

              -Between 1990 and 2000 the UN Food and Agriculture Organization reported a net loss of 94 million
              hectares worldwide.

Unmet Needs

    •   Retail

              -Energy costs continue to rise on a monthly basis

              -Cost/time of construction of new building rising

    •   Greenhouse

              -High maintenance costs of the plastic and glass greenhouses of today

              -Weather destroying crops around the world

              -Diminishing supply of lumber,
                             Competitor Analysis - Residential Housing

Earth Blocks

      Earth Block International Corporation
           o ¨Image
                    Provide low cost housing to every person
                    Save trees
                    Impact global warming
           o Cost
                    40’ x 25’ x 8’ shell
                    $1,802.84 (this includes any mortar that might be needed, the cost of labor,
                       delivery, sealant, and paint)
                    800 blocks per hour, 8 hours a day
           o Weaknesses
           o Every block is 12” x 8” x 4” and weighs 28 pounds
           o Blocks are not customizable

Light Gauge Steel Frame Housing

      MNL Financial Group
         o ¤
         o ¨Image
                  Desire to provide jobs
                  Environmentally safe
         o Cost
                  Prices remain stable (unlike price of wood)
                  Building kit:
                  Lowest: $45,000
                  Average: $85,000
         o Strengths
                  Does not require skilled labor
                  Easy to assemble
                  Provides jobs
                  Durable (wind and earthquake resistant)
                  Does not use trees
         o Weaknesses
                  Steel is expensive
                  Unskilled laborers must attend a “training school” before working

“Green” Housing

      NRDC and Enterprise Community Partners
              o   Strategic Group
                       The Green Communities Initiative
              o   Green” building includes:
                       Using energy efficient appliances and fixtures
                       Having skylights and high-performance windows
                       Using materials that that emit low levels of potentially harmful organic
                       Using recycled wood
                       Being located near public transportation
              o   Image
                       Provide affordable, environmentally healthy housing for low-income families
              o   Cost
                       $550 million will be used to build more than 8,500 environmentally friendly
                          homes across the country
                       About $64,706 per house (building cost)
              o   Strengths
                       Sleek and contemporary designs
                       Does not require a total rebuild of original structure
              o   Weaknesses
                       Expensive
                       Requires lifestyle changes

Cost Comparisons

   o   Wood Frame Housing
           o $60-$100 per square foot
   o   Earth Block Housing
           o $4.44 per square foot
   o   Light Gauge Steel Frame Housing
           o Most expensive materials
           o Estimate required for price information
   o   ¨“Green” Housing
           o Dependent on how extreme the environmentally beneficial additions are

                                               Competitor Analysis


   •   LP Building Products

              -Lumber Construction Supply Industry
              -Innovative and Green (As wood products, they’re resource-efficient, renewable and inherently
              -Provides aluminum sheeting, TechShield Radiant Barrier, to lower energy costs

              -Lumber does not last as long as earthen blocks and is flammable

    •   Nucor Building Systems

              -Steel Construction Supply Industry

              -A inexpensive source of reliable steel construction products.

              -80% of still used is recycled

              -Steel has a very low specific heat

       Masonry Industry

              -Masonry includes marble, concrete, limestone, granite, brick and other materials.
              -The industry is not significantly affected by the economic downturn due to developers’ preexistent

              –This is believed to continue for at least the next 3 years.

    •   TXI

              -Concrete Construction Supply Industry

              -A company centered around people and community with innovative products and environmentally
                friendly practices.

              -Wide Variety of Products

              -Equipment needed to provide service is energy inefficient.

                                                    Market Analysis

Market Size-Housing

    •   USA

              -Potentially all homes built in the United States could reap benefits from CEB building.

              -New Mexico, Arizona, California, Nevada, and Utah have a tradition of adobe/dirt use in their
              construction and would probably be a better target area

    •   Saudi Arabia

              -2004: Real estate contributed to 6.8% of Real GDP
               -Real estate interest in CEB/Adobe form of housing is growing

        Market Size Changes (USA)

               -Homes sold -> decreasing
               -Homes for sale -> Increasing
               -Supply of homes -> Increasing

Projected Growth

        Saudi Arabia

         -Raise from 6.8% to 7.2% of real GDP in 2009

         -Largest construction markets in the Middle East

         -Total investment in real estate (Saudi Arabia), estimated to be over US$300 Billion. Be

         over US$400 Billion by 2010.

         -Projected to grow by 5.8% annually until 2009 and then continue to increase, but at a lower growth rate.

    •    In General:

         -Construction companies will slowly increase their use of CEB for home design

         -Low income housing are expected to increase their use of CEB due to the cheap costs of

         construction and future energy savings


    •    Dirt is cheap and therefore make keep CEB costs low

         -Currently the pricing of other housing materials are low and therefore CEB are competing with timber,
         brick, steel, and insulated concrete forms

    •    EarthCo. large block compressor costs estimated $10,000 a day to rent and $500,000 to purchase

    •    Energy Pricing is higher for other types of home materials in comparison to CEB


    •    USA

         -California, Nevada, Florida, and Michigan have the largest amount of home owning foreclosures

         -Oil prices are currently low, but are expected to rise once again as we have seen in the past

         -Green Housing is increasing in popularity as global warming becomes a more prevalent issue

         -The housing market is in a recession

         -Fastest growing housing market is located in the South and Southwest United States

         -Housing Starts -> Decreasing
            -New Home pricing -> Increasing

            -Pricing vs. Number of Homes sold

    •       Predicted Trends

                •    USA

                               -Cheap mortgage rates

                               -30 year fixed rate mortgage will average 5.25% annually

                               -Down payments for housing will expectedly increase to 20%

                               -FHA Loans only require about 3% down payment (very opportune for first time

                               home buyers)

                               -Foreclosures will increase to about 1,000,000 homes in the year 2009

                               -More fraudulent activities for home loans are expected due to current

                               economic recession

Key Success Factors

    •       Flexibility, changing, and altering blocks for various uses with the shortest turnover time

    •       Cost effective now and in the future

    •       Energy efficient and will lower energy bills for homeowners

                                                                                                          Kyle Couture

                                                       Market Analysis

Market Size-Commercial

Earthen block construction can replace current building techniques, therefore the market size can be considered
the same as the current commercial building market. (Optimistically)

        •    United States                                   Key Industry Statistics

            Commercial Building Figures:                     2008

             Industry Revenue                                210 Billion

             Revenue Growth                                  3.7%

             Industry Gross Product                          63 Billion
          Number of Establishments                         21,000

          Number of Enterprises                            20,000

Projected Growth

Recently, this mature industry has struggled to achieve growth in today’s economy. There has been a slight
retraction in the market over the last year because of the current economic recession.

    •    Should be able to pick up speed with CEB once companies can realize how more affordable building
         becomes with economies of scale


The projected costs show that construction via earthen blocks is significantly less than other methods of building

    •    Cuts majority of labor

    •    Cuts transportation costs

    •    Cuts materials costs (Dirt is inexpensive and almost universally available)

    •    Decrease energy costs (Both with the number of workers/effort, as well as, transportation)

    •    EarthCo. large block compressor costs estimated $10,000 a day to rent and $500,000 to purchase


The most essential trend for the success of earthen building blocks is the general movement to eco-friendly
building and energy conservation. Earthen building blocks have both the properties of green construction and
energy conservation and efficiency. This in turn cuts overall costs.

    •    States have already started putting in policies to promote energy efficient building. (i.e. California)

Key Success Factors

    •    Successful integration into mainstream acceptance

    •    A very “green” appearance

    •    Ability to cut costs in all aspects of commercial building (i.e. building process, heating and cooling, and

Housing Technology and Government

The United States

        FEMA (Federal Emergency Management Agency) states that all homes in the US should be resistant to
         fire, floods, wind, and earthquakes.

        Building codes vary by county (for example, coastal areas mandate the building of elevated houses to
         protect homes from hurricanes) but most do not address Earthen building materials.

        Congress has the power to enact laws pertaining to patents, Article 1 Section 8.

        Patents in the U.S. are protected by law to promote the development of intellectual property.

        US Department of Energy is calling for homes to be constructed in an energy efficient manner. Passive
         solar designs would have standards pertaining to window location, glazing type, insulation, air sealing,
         and auxiliary heating and cooling if needed.
        New Mexico building codes allows for Rammed Earth Technology assuming:
                 “Rammed earth means qualified soil that is mechanically or manually consolidated to full
        And that walls 14-24 inches thick will be no more that 12 feet tall and compacted to 300 p.s.i.


        Europe consists of primarily democratic countries, most of which are involved in the EU.

        Most of the “least corrupt” countries are located in this region making it a safe place to do business.

        In Europe, intellectual property rights include process patents among others.

        Like in the US, European building codes are decided by national governments and local jurisdictions,
         making it difficult to decipher where an Earthen home could be built.


        China is a nation of loose communism.

        Until recently, housing has been seen as a welfare good in China. For the first time citizens in this
         developing nation have a choice in their housing.

        APEC (Asia Pacific Economic Cooperation) includes the US and many Asian nations. It was established to
         reduce tariffs among member nations. FTAAP (Free Trade Area of the Asia Pacific), if it were to be
         accomplished, would provide free trade among members of the APEC. The APEC has been criticized for
         accomplishing little in the direction of free trade.

        In China, houses must be able to weather severe earthquakes.


        Africa is a diverse, developing continent. For this reason, building codes and expectations will vary highly
         by region.
        African Regional Intellectual Property Organization grants patents and trademarks. Patents can cover
         industrial Design among other things. ARIPO has 16 member countries and 14 other observers.

        It is important to remember that many African nations are also considered among the “most corrupt” and
         may not be safe business partners.


        The North American Free Trade Agreement protects intellectual property rights in commerce between
         the US, Canada and Mexico. It is also set to eliminate all tariffs by this year.

        The Mexico Green Building Council has been established to help green efforts in Mexico and Latin


Business Technology

        The development of the Internet in Business provides a wealth of opportunities for marketing.

                                             e- commerce

                                             company websites


                                             blogs and wikis

        These technologies allow companies to access and interact with customers on a more frequent basis and
         at less cost than traditional methods, transforming possibilities within the marketing mix.

Construction Technology

        Concrete, cement, natural gas and petroleum have inflated rapidly but none as much as steel.

        Steel is now catching up with inflation, causing more stress for the construction industry.

        The real price of lumber, however, has crashed and is lower than ever.

        The cost of home building materials is a concern outside of the US also. Prices of sand, gravel, rods, and
         finishing materials are putting a strain on homebuilding in Africa.

Green Housing Technology
      MoistureShield, a company that has been one of the first to market green building technology in China,
       makes decks out of recycled plastics.

      Other plastic lumber.

       Natura Interior Paint.

      Autoclaved Aerated Concrete Blocks.

      Rammed Earth Houses.

      Adobe.

      Eco Timber products and wood from sustainable harvest practices.

      Many other green building products of great variety can be found online.

Commercial Technology and Government

      There are many competitors for example, other building block methods, steels, Adobe, Adobe tree
       homes, brick, wood, etc.

      Many ways to power their machine and the home they build such as hydro power, fuel cell, solar power,
       thermo and wind turbines.

      New government regulations and money with the new government and president there are many
       opportunities to get grant money. It could make it easier to pass codes for building block homes

      New codes for building greener homes

Domestic Economy

      GDP

           -    Largest drop since 1982 Q4 (4.8%)

           -    Drop in residential domestic investment

           -    Rise in nondefense government spending

      Unemployment

           -    Current: 7.2%
           -   Expected: 8%

Stimulus Opportunities

      $43B increase in transportation

      $20B increase for renewable energy development

      $31B for government building projects

International Economy

      Exchange rate

       -   Dollar down relative to all major currencies

       -   Leading to a small increase in foreign goods and services exports

      Foreign investment

       -   ~3 fold increase since 2004

Demographics- United States

      United States Projected Population for 2010

           -   Largest age group 45 to 49 (22,596,000 people)

           -   Second largest 20 to 24 (21,779,000 people)

           -   Numbers begin drop off significantly after age 55

      United States Homeowners (by proportion of age group)

           -   Under 35- 41.7%

           -   35 to 44- 67.8%

           -   45 to 54- 75.4%

           -   55 to 64- 80.6%

           -   Over 65- 80.4%
          Principal Type of Exterior Wall Material of New One-Family Houses Completed (2007)(Percent


           -    Brick- 23%

           -    Wood- 8%

           -    Stucco- 23%

           -    Vinyl Siding- 30%

           -    Aluminum siding- 0

           -    Other (cinder block, stone, fiber cement, and other types)- 16%

Demographics- International

          Total world population increasing at a rate of 1.17% (6,790,062,216- current world population)


          Society’s Perceptions on Earthen Block Homes

           - Appearance
           - Utility
           - Costs
           - Availability
           - Durability
          International movement towards becoming environmentally friendly , “Going Green”

                                              Performance Analysis


          An unknown set percentage of $3,500 per day from leasing

Relative Cost

          $350,000 cost to manufacture prototype
          Salary for the machine operator and backhoe operator
          Fuel costs
          Delivery costs to transport machine to and from construction site
          Depreciation expense
          Patent protection costs

Value Analysis
       Cutting energy costs
       Cutting construction costs
       Fastest construction process

Product Portfolio Analysis

       Sustainable
       Adaptable
       Closed loop material cycle
       Patent provides competitive analysis

Customer Satisfaction

       Successful existing market in New Mexico
       Depends on:
                -Cost efficiency
                -Functionality as a normal house/building

Employee Capability

       Two employees needed to operate the machine

                 -Machine Operator

                                Will require three days of training
                                Responsible for operating the patented machine

                 -Backhoe Operator

                                Will feed material into the machine and set the megablocks

Employee Productivity

                                Two employees needed to operate the machine, only one requiring training

New Products

                Multi-chamber machine in developmental stages

                                     Determinants of Strategic Options for
                                       Housing and Commercial Markets

Past/Current Strategies

    •   Company website

    •   Partnership with Texas Tech University Architecture and Marketing programs

Strategic Problems

    •   Website not kept current
    •   Not enough information posted on the website
    •   Video quality on the website
    •   No current advertising
    •   No current brochure/integrated marketing materials
    •   Total lack of community and public awareness

Organizational Capabilities

    •   Update & Stylize Website

    •   Develop Integrated Marketing Materials to pass out to potential clients

    •   Work with other Texas Tech classes and programs to develop product

    •   Partner with other building firms

    •   Obtain corporate backing

    •   Develop product then market to government as a subsidy program

    •   Press Notification of Girl Scout Camp building project

Organizational Constraints

    •   Only a 2-person management team

    •   General public misunderstanding of product concept

    •   Lack of concrete future plans

    •   Expenses of program

Financial Resources

    •   Personal Financial Backing of Founders

    •   Profits received from previous projects

    •   Overall, little to no financial resources to spend on marketing materials

Financial Constraints

    •   Many due to lack of staffing, need for product development, and expense of projects


    •   Energy saving ability

    •   Eco-friendly premise

    •   Cheap Building Costs
    •     Patents already obtained in several countries

    •     Enthusiastic employees

    •     Quality Product


    •     Lack of Current Advertising

    •     Lack of Current Marketing Brochures and Materials

    •     Faulty Website & Video Design

    •     Lack of future concrete direction and plans

    •     Lack of community and public awareness of technology


    •     Texas Tech University programs

    •     Suffering housing market

    •     Current decrease in natural resources

    •     Almost never-ending supply of earth


    •     Lack of Funding

    •     Fluctuating Housing Market
                                            Works Cited

Adobe Homes
Adobe Information

Babb, Danielle. “2009 Predictions for the Housing Market .” January 2009.

         < >

Barnes,T., “State getting Wal-Mart's help in cutting its energy costs” May 11, 2008

         < >

Brown, L.R., Eco-Economy: Building an Economy for the Earth (W.W. Norton & Co., NY: 2001)

          < >

Costs of Building Green

“Deforestation Stats” <>

Earthblock inc “Benefits of EarthBlock”

Energy Information Administration “Residential Energy Consumption Survey” 2005

Energy Star. 13. Facility Type: Retail


Filipek, Erica. “U.S. Department of Housing and Urban Development.” 29 January 2009.

         < >

Global Investment House. “Saudi Arabia Real Estate Market.” January 2009.

         < >

LP Construction Supplies, 2009.
“Lubbock Demographics and Household Information” 2007 National Relocation

“National Data.” September 2008. < >

Nucor Building Systems, 2009.

Schwarzenegger, A. “Green Building Initiative State of California Executive Order S-20-04.” December 2004.


TXI, 2009.

The Wall Street Journal <>

U.S. Bureau of Economic Analysis <>

U.S. Bureau of Labor Statistics <>

U.S. Census Bureau <>

U.S. Department of Commerce <>

U.S. Department of Energy. “Building Energy Data Book.” November 2008.

“U.S. Industry Report.” 24 December 2008. <>

Williamson, Larry. “EarthCo. Building System.” 2008. < >

X-Rates <>


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