Could some of the most in-demand housing markets be cooling off?
Morgan Follows 'Rayco Model' to Market Lead
Indianapolis Giant C.P. Morgan Communities is a testament to the fact that the 'Rayco model' still works.
Indianapolis Giant C.P. Morgan Communities is a testament to the fact that the "Rayco model" still works.
By following the management precepts that led Rayco to dominate San Antonio in the early 1990s with a market share consistently above 50%, Chuck Morgan's firm reached 18% market share in Indianapolis during 2002 with the eight best-selling communities in the market and 11 of the top 15, according to local research firm Permits Plus.
That allowed C.P. Morgan to jump from No. 83 last year to No. 58 in this year's Giants rankings on 2002 revenue of $281.7 million from 2,161 closings (in a market that dropped 13%). That's up from $200 million on 1,655 closings in 2001.
Under the tutelage of consultant and former Rayco vice president Jack Robinson, Morgan moved his firm from building 200 homes a year eight years ago to 2,200 this year by finally reaching the steady "drumbeat" of 10 a day in sales, construction starts, completions, closings - everything - that is the most famous element of the Rayco model.
The approach is profoundly more than the regularized production process that others often call "even flow," a term Robinson will not tolerate, because it shortchanges other aspects, such as meticulous consumer research and a broad array of customer choices selected from an elaborate, 12,000-square-foot new home showroom.
Morgan's houses range from $80,000 to $200,000 in price, focused on a value equation delineated by the marketing motto "More square feet. Less money."