Ryland 1998 Annual Report

Ryland builds homes priced from $80,000 to more than $400,000. Each reflects
the needs and lifestyles of local homebuyers. The Southhill model (above) in Columbia,
Maryland, is priced from $299,990.

ACHIEVING MARKET DOMINANCE

While volume growth has not been our main focus in recent years, as we have instead concentrated on improving margins, it now is the leading component of our strategy for the future. Our overall strategic objective is to become a dominant high-volume production homebuilder in each of our geographically diverse markets.

High volume is a key requirement for achieving market dominance, and the related benefits it affords us as a production builder are tremendous. These advantages include access to the best land sites, better pricing on quality labor and materials, and increased overhead leverage - all of which translate into improved cycle times, better return on inventory, and higher profits from our operations.

For purposes of achieving this goal, we define market dominance as being among the top five homebuilders in any given market. It is at this point that we believe the benefits associated with high-volume production can be fully realized.

To help sell more homes, we use a variety of marketing techniques, including advertising, public relations, e-commerce, and database marketing. New tactical direct-marketing programs are focusing on better data collection, database management, and customer follow-up. In 1998, these efforts contributed directly to increased traffic to communities, provided invaluable feedback on consumer preferences, and led to increased conversion rates, incremental sales, and additional closings.

Over the past year, we have strengthened our position in our markets by increasing volume and enhancing market share through an improved product line and land position, and better marketing. Because of the vast improvements in our product and land position, we now are ranked among the top five builders in a majority of our divisions; and we are well on our way to attaining a dominant position in our remaining markets.