International Strategy of Kingspan Group

This report analyses the external environment of Kingspan Group, a construction industry company, using different models such as Hambrick and Fredrickson's five major elements of strategy content, Osterwalder's Business Model Canvas, PESTEL framework, Porter's Five Forces Framework, and VRIO analysis of resources and capabilities. The report concludes that Kingspan has the ability to mitigate its threats in an effective manner.

Running head: INTERNATIONAL STRATEGY OF KINGSPAN GROUP
INTERNATIONAL STRATEGY OF KINGSPAN GROUP
Name of the Student
Name of the University
Author Note

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INTERNATIONAL STRATEGY OF KINGSPAN GROUP
Executive Summary
The report is based on the analysis of the external environment of an organization named
Kingspan Group which operates in the construction industry. The strategy that has been
applied by the company has been analysed in the report with the help five elements of
strategy content. The business model canvas of the company is also analysed in the report.
The external environment and industry of the organization has been analysed with the help of
PESTLE framework and the Porter’s five forces analysis. The strategy of the business and its
value proposition has also been analysed in the report and it is concluded by stating Kingspan
has the ability to mitigate its threats in an effective manner.

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INTERNATIONAL STRATEGY OF KINGSPAN GROUP
Table of Contents
Introduction....................................................................................................................3
Step 1..............................................................................................................................3
1. Hambrick and Fredrickson’s five major elements of strategy content..................3
2. Osterwalder’s Business Model Canvas..................................................................4
3. Macro-environmental analysis (PESTEL).............................................................5
4. Porter’s Five Forces Framework............................................................................7
5. VRIO analysis of resources and capabilities..........................................................9
Step 2..............................................................................................................................9
1. Level of coherence of company strategy...............................................................9
2. Competitiveness of value proposition..................................................................10
3. Support provided to the value proposition...........................................................10
4. Opportunities and threats faced by Kingspan Group...........................................11
5. Position of the company to face the threats.........................................................11
6. Recommendations provided to improve the performance...................................12
Conclusion....................................................................................................................12

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INTERNATIONAL STRATEGY OF KINGSPAN GROUP
Introduction
Kingspan Group is an organization that operates in the industry of building materials
and has its base in Ireland. The company was established in the year 1960 by Eugene
Murtagh and has entered the Irish Stock market in the year 1989. The organization further
expanded its operations into many other businesses which include, the manufacture of
insulated panels, rigid insulation board with the help of different greenfield plants and
acquisitions of some organizations (Kingspan | Group. 2018). The growth in sales of the
company was first experienced in the year 2012, when the organization had announced
acquisition of an organization named Rigidal Industries. The different operating units of the
company include, facades and insulated panels, insulation, environmental, renewables and
solar, building services, petrochemical and insulation based systems and products (Kingspan |
Group. 2018).
The report will be mainly based on the study of strategies that have been applied by
the organization. The external and internal environment of the company will be analysed with
the help of appropriate models and suitable recommendations will be provided based on the
findings.
Step 1
1. Hambrick and Fredrickson’s five major elements of strategy content
The strategic decisions that are made by organizations play a significant role in the
ways by which they are able to operate. The organizations thereby need to include all types of
relevant information in the process of decision making in order to operate in a sustainable
manner in the industry. Hambrick and Fredrickson have suggested five elements which are
based on strategy content of the organizations. These elements can thereby discussed as
follows,

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INTERNATIONAL STRATEGY OF KINGSPAN GROUP
Arenas – The arenas that have been chosen by Kingspan to operate in a profitable
manner is an important factor that has been able to affect the operations. The organization has
chosen to sell its products to customers with the help of retail channels in a direct manner.
Differentiators – Kingspan has been able to differentiate its products and services
from the other organizations in the market with the help of the cost leadership method
(Barros, Hernangómez and Martin-Cruz 2016).
Vehicles – The process that is used by the company to develop its products and
services plays a significant role in the efficiency of its operations in the retail market. The
speed with which organizations are able to grow is able to decide its pace which can help the
goods to reach the markets.
Staging and Pacing – Kingspan has developed a unique strategy which has been
helpful for the processes of the company in the market. Innovation has played the most
significant role in the development of appropriate position of Kingspan in the industry. The
company will be able to develop its position and retain it with the help of appropriate
strategies (Daspit et al. 2017).
Economic logic – The last part of this model is based on the process that is used by
the organization to increase its profitability in an effective manner. The services and products
offered to customers will be an important part of the strategy formulation.
2. Osterwalder’s Business Model Canvas
Key Partners
 Suppliers
of parts and
the
automotive
companies.
 Developers
of the
Key Activities
 Storage of
energy in an
efficient
manner.
 Low
consumption
of energy in
Value Proposition
 Providing
energy
efficient
services for
the buildings.
 Providing
services by
Customer
Relationships
 Creation of
supportive
suppliers of
the
company.
 Generation
Customer
Segments
 Different
domestic
and
commercial
buildings.

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INTERNATIONAL STRATEGY OF KINGSPAN GROUP
equipments
that are
used for
constructio
n.
different
production
processes.
 Understandin
g the needs
of the
customers.
keeping fire
safety in the
highest
position.
of sales
with the
help of
word of
mouth.
 Customers
who want
to increase
the levels of
energy
efficiency
of the
buildings.
Key Resources

Channels
 Suppliers
of the
company.
 The
different
sales areas
of the
company
(Demir,
Wennberg
and
McKelvie
2017).
Cost Structure
 The products are provided with respect to the
prices that are set in the market.
Revenue Streams
 Sales of the building fittings which are
safe in nature.
 Generation of power.
3. Macro-environmental analysis (PESTEL)
Political factors – The political situation of a country plays an significant role in the
ways by which establishments are able to operate. Kingspan Group operates in the industry of
Construction and Materials in greater than a dozen countries in the world. The organization
will be able to develop appropriate strategies in stable political environments. The levels of
interference that is made by the governments of different countries are able to affect the
operations of Kingspan Group.
Economic factors – The different macro-economic factors of the industry which
include, the inflation rates, interest rates, economic cycle and savings rate are able to affect
the demands of products that are offered by Kingspan Group in the market. The different
economic factors are considered by the organization in order to provide the best level of

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INTERNATIONAL STRATEGY OF KINGSPAN GROUP
services to the customers in an effective manner. The Construction and Materials industry is
affected highly by the external economic forces (Durand, Grant and Madsen 2017).
Social factors – The culture which is followed by the society is also able to affect the
organization and the products that are offered. The culture of the countries is able to affect
the ways by which services and products are developed by Kingspan Group. The
entrepreneurial spirit of the society is a major factor that affects that profitability of the
company. The attitude that is depicted by the customers towards the products of Kingspan
Group helps in determining the demands. The population levels of the country in which the
company operates affects the levels of demands of different products and services that are
offered to the consumers (Dyer et al. 2015).
Technological factors – Technology is highly disrupting in the construction industry
and the changes have taken place quite fast in the last few years. Technological analysis plays
an important part on the successful operations of the company in different areas of the world.
Recent developments which have taken place in an environment is able to bring changes in
the types of products and technological levels. Technology has a huge impact on the products
that are offered by the organization. The speed of technological disruption is an important
factor that is related to the creation of effective products in the organization with a short
period of time (Engert, Rauter and Baumgartner 2016).
Legal factors – The countries and the legal frameworks can have immense effects on
the ways by which the company develops the policies that are implemented in organizational
processes. The leadership of Kingspan Group needs to consider before entering a new market
area. The ecommerce based areas can be explored by the company with the help of legal
framework.

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INTERNATIONAL STRATEGY OF KINGSPAN GROUP
Environmental factors – The different norms and environmental standards that are
followed in different countries impact profitability of the Kingspan Group in an effective
manner. The company thereby needs to follow different environmental norms in order to
operate in an effective manner in the external environment. The changes which take place in
external climate is also able to affect the operations of Kingspan Group (Ethiraj, Gambardella
and Helfat 2018).
4. Porter’s Five Forces Framework
Threats of the new entrants – The nee organizations which enter the Construction
and Materials industry are able to bring high levels of innovation in the industry. The
companies put pressure on the Kingspan Group with the help of lower pricing based
strategies. The new organizations are able to provide new value propositions with the help of
reduced prices. Kingspan Group thereby needs to manage the challenges and thereby try to
build effective types of barriers in order to safeguard its position. The innovation of new
products and the services also plays an significant role in the ways by which Kingspan Group
is able to compete against new entries in the industry (Dobbs 2014).
Bargaining power of the suppliers – The products that are provided by the Kingspan
Group are manufactured with the help of raw materials that are supplied by different
suppliers. The suppliers who are in a dominant position are thereby able to affect the prices
which are decided by the organization. The higher power of the suppliers is thereby able to
lower the profitability of the Kingspan Group. The company thereby needs to create an
efficient supply chain with the help of multiple suppliers. The experimentation can also be
done by the organization with products that are offered to customers (Frynas and Mellahi
2015).

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INTERNATIONAL STRATEGY OF KINGSPAN GROUP
Bargaining power of the buyers – Buyers in the industry are extremely challenging
in nature and are able to affect the prices of the Kingspan Group. The profitability of the
organization is also reduced due to high demands of the customers. The organization thereby
needs to build a large customer base in order to stay profitable in the industry for a longer
period of time. Innovation of new products is also an important part of successful operations
of Kingspan Group. The buyers or customers play the important role in successful operations
of the company. Kingspan Group thereby needs to build a loyal customer base in order to
operate in a successful manner. The larger customer base is further able to lower their
bargaining power in the industry (Hill, Jones and Schilling 2014).
Threats from the substitute products – Kingspan Group needs to face huge threats
from the products that are offered by different organizations. The company thereby needs to
create differentiation in the industry with the help of its unique product offerings. This force
is able to affect the profitability levels of the organization to high levels. The revenues of
Kingspan Group are also under huge threat due to the issues that are caused by the substitute
products. The company can also provide higher levels of services to the customers in order to
create a loyal customer base in the industry in an effective manner. The core needs of
customers can also be fulfilled with the help proper understanding of their needs (Hitt and
Duane Ireland 2017).
Rivalry among the existing players – The levels of rivalry among companies in the
industry plays a significant part in the ways by which the organization is able to provide
appropriate services. The levels of rivalry are able to drive down the prices of different
products and services that are offered by the company to its loyal consumers. The price wars
can further affect the overall profitability of the company in the industry. The Construction
and Materials industry is highly competitive in nature and this has further taken a toll on the
revenues that are earned by the company in the competitive industry (Hubbard, Rice and

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INTERNATIONAL STRATEGY OF KINGSPAN GROUP
Galvin 2014). Kingspan Group can thereby face the competition in the market with the help
of proper differentiation of the products and services. The development of differentiation in
the market is an significant factor that helps in the ways by which organizations are able to
operate in the industry. The company needs to build a scale which can help Kingspan Group
to compete in a better way in the industry (Karadag 2015).
5. VRIO analysis of resources and capabilities
Value – The products and services that are provided by Kingspan Group in the
industry hold high value in the industry and are not easily provided by other organizations.
The high value based services and products of the company are able to create its different
place in the industry.
Rareness – The products that are offered by Kingspan Group are not quite rare as the
company has huge competition in the market. The level of rarity of the products of the
company is not high (Kasemsap 2014).
Imitability – The competitor organizations of Kingspan Group are thereby able to
affect the operations of the company. The products are imitable by the company and this is an
important part of the operations of Kingspan Group.
Organization – The various resources that are owned by Kingspan Group in the
industry are an important part of the operations of the organization. The resources are
evaluated in order to develop the services and products that are offered by the company to the
large group of customers in the industry. The resources which have been gained by the
company are an important part of the successful operations of Kingspan Group (Meyer, Neck
and Meeks 2017).

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INTERNATIONAL STRATEGY OF KINGSPAN GROUP
Step 2
1. Level of coherence of company strategy
The major strategy that has been implemented by the Kingspan Group is based on
becoming a global leader in the industry of building the envelope solutions and insulation of
high performance. The improvement of the performance of different buildings, methods
related to construction and the lives of people is also an significant part of the strategy that
has been developed by Kingspan Group. This strategy is able to drive the teams that are
operating in different areas of the world. Kingspan Group has more than 100 manufacturing
based facilities, more than 13,000 employees are a part of global operations of Kingspan
Group. Kingspan Group has remained coherent to the strategy that has been developed in the
industry. This has been helpful in the creation of proper and profitable operations of the
company (Michael, Storey and Thomas 2017).
2. Competitiveness of value proposition
The products and services of Kingspan Group have been developed with the help of
different external factors which have influenced the company. The organization has aimed at
providing products that are safe and follow different fire safety based instructions that have
been provided by the governments. Kingspan has developed the products in order to provide
the best levels of services with the help of simple solutions. The solutions which have been
provided by the Kingspan Group are able to affect the buildings in different sectors
(Morschett, Schramm-Klein and Zentes 2015). The insulated buildings are further able to
generate power and further protect people as well. The value proposition that has been
developed by the organization in the industry is highly competitive in nature and has helped
the firm to create its position in the industry in an effective manner. The different standards
and certificates that have been received by the services of Kingspan Group are a part of the
value proposition (Sakas, Vlachos and Nasiopoulos 2014).

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INTERNATIONAL STRATEGY OF KINGSPAN GROUP
3. Support provided to the value proposition
The value proposition which has been created by the Kingspan Group is able to affect
the ways by which the organization operates and designs its products as well. The company
has been successful in providing support to the value proposition with the help of its products
which are capable of fulfilling the needs and demands in an effective manner (Simon,
Fischbach and Schoder 2014).
4. Opportunities and threats faced by Kingspan Group
Opportunities – The lower rates of inflation in the industry are able to affect the
operations of Kingston Group as the market is expected to become much more stable in
nature. New trends that have been experienced in the behaviour of consumers is also an
important part of the ways by which it operates and provides the products. Implementation of
new technologies is an important part of operations of Kingspan Group in the industry which
has provided huge opportunities for growth. Development of the market is thereby possible
by diluting the levels of competition in the industry in an effective manner (Steinbach et al.
2017).
Threats – The organization needs to effectively analyse the variations that have taken
place in the behaviour of consumers. The company is thereby able to operate in an effective
manner with the help of appropriate services and products that are offered to the customers.
The rise which has been experienced in the prices of raw materials is an significant factor that
affects the profitability of an organization. Kingspan Group has its operations in different
countries and its profitability is thereby affected in an adverse manner by the fluctuations that
take place in the value of currency. The shortage which has been experienced in the skills of
the workforce is also an important factor which is capable of affecting the operations of the
organization in the industry (Trigeorgis and Reuer 2017).

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INTERNATIONAL STRATEGY OF KINGSPAN GROUP
5. Position of the company to face the threats
The innovation based capabilities that have been built by the Kingspan Group have
been able to provide huge opportunities to the organization in the industry. The cash flow
levels of the organizations are high enough to provide proper support to Kingspan Group in
order to achieve the targets. The employee base or workforce of the company is highly
efficient in nature and has been able to provide a huge opportunity to Kingspan Group so that
it is able to operate in the industry. This can act as important factor which can help in the
formation of competitive advantage in the industry. The community of dealers of the
company which has been created by Kingspan Group over the years will prove to be a major
asset in the effective mitigation of various risks facing the company (Wheelen et al. 2017).
6. Recommendations provided to improve the performance
The major recommendations that can be provided to the company are based on the
ways by which it can use its strengths in an effective manner for the purpose of creating an
effective position in the industry. The financial and human resources which have been
possessed by the company will thereby play the most important role in proper improvement
of its operations in the industry. The company will be able to operate in a gainful manner
with the help of different operations which can be performed with the help of its resources in
the industry.
Conclusion
The report can be concluded by stating that the Kingspan Group will be able to
operate in a profitable manner in the industry. The analysis of external environment of the
organization has stated that the organization has the ability to use the strengths in order to
mitigate the threats that are posed towards its operations. Kingspan Group thereby needs to
focus on improving its product offerings and further try to create position in the industry in an

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INTERNATIONAL STRATEGY OF KINGSPAN GROUP
effective manner. The competitive industry of construction requires high levels of innovation
from the organization which can be helpful in facing the competition which exists. Kingspan
Group is thereby capable of increasing its revenues in the industry within a short period of
time.

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INTERNATIONAL STRATEGY OF KINGSPAN GROUP
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