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Log home company segmentation

Monday, August 25th, 2008

Log home manufacturers aren’t only competing against each other, but also against other home manufacturers, which use different materials and building technologies. It is surprising to see huge differences in strategies that various log home manufacturers are using. Here’s a short example from Finland.

MARKET SHARE OF LOG HOME COMPANIES
Of all the single houses that are built in Finland slightly less than 8% are log homes. To many this is surprisingly large share of newly-built single homes, but Finland does have long log building tradition and like elsewhere log homes are experiencing some kind of a renaissance.

It’s interesting to observe how companies are focusing on different niches, trying to carve big enough market share for themselves. Some log home companies focus on cabin production and don’t manufacture log homes. Some do everything, but in long term that doesn’t seem to bring good results. Some focus on exports while some remain domestic.

VACATION HOME MARKET SHARE
Honka is extremely strong in all kinds of vacation homes and cabins, as well as on several international markets. However, there are companies that sell more log homes in Finland’s domestic market. We can say that Honka is especially strong in vacation homes.

SINGLE HOME MARKET SHARE
Mammuttihirsi is a log home manufacturer that has grabbed sizeable piece of total market in Finland, but it is not as strong on the vacation home market. Actually it is almost off the radar when we look at cabin side of the market.

EXPORT MARKETS OF FINNISH LOG HOMES
As mentioned above, Honka is the king of vacation log homes and it is that on domestic and export markets. There are markets (eg. Slovenia), which Honka dominates with over 50% market share and that translates into fact of Honka being the biggest log home company in the world.

Right after Honka comes Kontio, which has grown steadily on all markets. Kontio has fared well in all product categories and markets. New contender behind these two giants is company called Finnlamelli, which supplies only glue-laminated logs and custom log homes. Finnlamelli’s strategy has paid off, because of their narrow focus, their quality is high and prices affordable - expect to see this company to close the market share gap to two biggest competitors.

PRODUCT SLATE
Some companies provide anything you can think of. Very tiring strategy and only feasible for marketing companies that don’t actually manufacture everything they sell. Some companies only deliver round logs and some only glue-laminated straight-planed logs. It is evident that wider selection increases costs, because of more complicated production process. This is something that log home companies can’t afford in general, because log buildings are already considerably more expensive than e.g. element or stick-built buildings.

MY CHOICE OF FINNISH LOG HOME COMPANY
First I would check what companies deliver to my area and then I’d choose a company that can provide assembly and installation services. Only after these issues are settled, I would go into style and material. Fact remains that most log home manufacturers consider themselves as custom home makers so projects rarely stall because lack of manufacturing capabilities. No easy answers here, you see, companies are good in different things.

7 reasons why log homes won’t be swept away by finance crisis

Sunday, July 20th, 2008

As any homeowner, log homeowners are deeply concerned about effects of current financial crisis on their homes. Foreclosures are happening left and right, maybe our friends are affected or maybe a family member. I’m here to tell you that you don’t have to worry about your log home’s or log cabin’s value and I’m going to give you a list of seven good reasons to stop worrying. For other valuable log home tips, subscribe my feed.

woodland cabin

1. Log home is a dream
Some call it longing for times long gone or sentimentality, some call it the ultimate way of life, but they all have one thing in common - log home is a matter of heart and soul. Dreams are difficult to value in money, but we all know that they are worth a LOT. This means that log home dreams are highly valued by the people who live in them and therefore log homes and log cabins prices remain high.

Living in a dream home makes people cling to it. If everything is perfect, why change anything? However, if you are not yet living in your dream home, it just might be that during rough times, flipping down would be easier. No flipping down in log homes, we love and live them.

2. Log home stands among beauty
Lakeside, mountain top, prairie, riverside, woods, slope, resorts and some other beautiful locations are places where you find most of log homes. Suburban log home… nah, not really and this shows in the price of log homes and log cabins. Many log home lots cost more than our everyday single home in the midst of other similar houses.

mountaintop cabin

Mark Twain said along the lines that land is always a good investment because nobody’s making more of it. Make sure your log home stands in a special environment and value appreciation is guaranteed.

3. Log home residents are older

How many young families that you know live in log home? Not many, because log homes tend to be luxuriously designed by using unused space (now that’s a funny term), those cathedral ceilings or large foyers and what about those outrageously large fire places… Yes, log home is not a place for young family, which is fighting with the bills and commuting between school, daycare, work, hobbies etc. When would you have time to enjoy your home?

Log homes are for people who have time to enjoy environment, staying home and doing little chores, all part of the lifestyle, which comes along with a log home. There’s a big chance that these people have already stepped into retirement, there are no sudden changes in every day life (4th baby! We need a bigger home and we need it now!) and years of work life have brought enough to get by without working. So, as a result, these log home enthusiasts stay in their log home and have a ball while doing it. Not many log homes are coming to markets to be sold and market prices of log houses stay high.

4. Log home stores value
Log home is very special in the way it’s built. Builders have to solve many structural challenges while creating someone’s dream. Robust structure and thick walls set the log home for decades and while lesser homes get torn down, log homes get renovated and remodeled to suit the likings of different generations. When log homes age, they age like fine wines, bringing more meaning to the story of the house and to the people who live in it.

5. Log home is made of quality materials
It ain’t no way to dream without silk and satin sheets. Log homes are all about wood, stone and steel. No one is going to water down their dreams with vinyl, plastics or polyester. Another angle with materials is down right cold cash. Poor materials devalue home and increase upkeep costs over time, because cheap must be fixed more often. Also people who value quality know that there is price tag included, moreover they look what they get with their money not how much it costs.

6. Log home is unique
Just about every log home is built according somebody’s special plan. The plan might have been brooding up for years. Before building project starts, the planning book can contain clippings from magazines, textile samples, photos of real life log homes around the country, news stories, wood material samples, floorplan sketches, coffee stains… Log home is a labor of love.

People recognize love and dedication to unique details and in turn fall in love with the place. Sometimes it might be bit of a wait, but the right person is bound to find the right home and match is made to last. These perfect matches create so much value to the owners of log home that benefits easily outweigh monthly payments.

7. Log home builder loans are a pain to get

Because large part of log home crowds love to have the deluxe log home experience, they end up building the home from ground up. Unfortunately banks are not too trusting towards the combination of owner/builder and log home therefore loans are hard to come by. Luckily, today this means that log home owners are less likely to fall into the turmoil of financial crisis. Also it means that many log homes have been built with lot of elbow grease, which has helped to keep the building costs at check. Living in a home that was relatively cheap to build and sports high market value is a perfect combination.

Do you have a good point that wasn’t mentioned, please, help me and post a comment.

  • Log home photos

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