MN6003: Individual Strategic Analysis of CRH Plc Case Study

This assignment presents a strategic analysis of CRH Plc, a company in the construction materials industry. The analysis begins with an application of Porter's Generic Strategies and Bowman's Strategy Clock to understand CRH Plc's past success, focusing on cost leadership, differentiation, and focus str...Read More

Individual Strategic
Analysis and Decision-
making Assignment

Table of Contents
INTRODUCTION......................................................................................................................3
CASE STUDY ANALYSIS......................................................................................................3
Apply Porter’s Generic Strategies model and Bowman’s Strategy Clock to the case, and
use these to discuss why CRH Plc has been successful so far...............................................3
Is CRH Plc new strategy sustainable, discuss strategy direction and choices?.....................5
Would you recommend any changes to CRH Plc approach? Justify your recommendations
................................................................................................................................................7
CONCLUSION..........................................................................................................................9
REFERENCES.........................................................................................................................10

INTRODUCTION
Different organisations are operating different aspect and challenging business nature
in the industry. The future is very uncertain in the industry so it is become important to
organisations for develop an understanding related to strategic environment in order to know
more about the competitive advantage of the company (Black, 2019). In this assignment a
case study is analysis on CRH Plc. This company was founded in 1970 and it’s headquarter
in Dublin, Ireland. Mainly three things are consider in this assignment which is porter’s
generic strategic and Bowmen’s strategic model to evaluate the successful nature of chosen
organisation. Furthermore, new strategy sustainable approaches and some recommendation
which must be adopted by CRH Plc.
CASE STUDY ANALYSIS
Porter’s Generic Strategies model and Bowman’s Strategy Clock to the case, and use these to
discuss why CRH Plc has been successful so far
Porter’s Generic Strategies Model
Porter’s generic models is the management tool which is analysis the industry and
understand different concepts which is depend on profitability of industry (Collins and
Frydenlund, 2018). The main step of these porter’s generic model is cost leadership,
differentiation, and focus which are discussed in the company along with their advantages
and risk analysis factors. Competitive advantage means how a company create their values in
market
Figure 1Modern Roots of Strategic Management: Cement Road stone Holding (CRH), 2021

 Cost leadership strategy: This involve the lowest cost strategies, as in CRH Plc.,
they try to make cost effective company by using large number of supplier in the
market and which are helpful for them to make the raw material cheap in the
organisation. Suppliers in the dominant position can decrease the profit of CRH Plc
that are helpful to earn the market. CRH Plc can easily tackle this situation as they are
efficient in supply chain with having large multiple supplier in the company. They
further use different product design suing different materials so that the price of one
raw material can easily able to shift to another raw material suppliers.
 Differentiation strategy: This strategy bring some uniqueness along with different
major directions valued by a customer to allow a company a premium price. Most of
the manufacturing company use this strategy in order to complete the demand of the
customer. In CRH Plc., thye use customer relationship strategy, product and price
attributes and compliment which are helpful in using differentiation strategies. Buyer
of the company mostly demanding a lot, they want to buy the best offering available
by paying the minimum price. This would pressure on CRH Plc profitability in the
long run profits. The smaller base of customer base will be higher the bargaining
power of customer.
 Focus strategy: This strategy is based on competitive scope, Means Company try to
target a small sector area where their products are useful and complete the demand of
customer. New entrants in construction industry, new ways of doing things and all
these things put pressure on CRH Plc. by completing lower pricing strategies,
reducing cost and further them providing new value proposition to the customers
(Gati, Levin and Landman-Tal, 2019). They further believe in building economies of
scale in order to fix the operating costs. It improve reduce the extraordinary profits for
entering new organisation in industry. Mainly there are two type of focus strategy one
is cost focus and another one is differentiation focus.
Bowman’s clock strategy model
It is the model which is used to explore the options for more strategic positions, which
means this model help the company to identify about how the product should be used in
market so that they can use most competitive position in market. CRH follow a plan strategy
which are helpful for them to provide a clear and long term view to stay in industry. CRH
corporate’ management team in Dublin are always try to plan their explicit, enduring
reinforced strategies to gain competitive advantage. Mainly there are four factors which are

used by the company; differentiation strategy, low-price strategy, Hybrid strategy and Non-
competitive strategy.
Figure 2Modern Roots of Strategic Management: Cement Roadstone Holding (CRH), (2021)
Initially CRH .try to focus on cost leadership strategy which have main focus on
industry structure and increase competitive advantage. Further they are focusing on low price
and high quality where they can make strong competitive base (Modern Roots of Strategic
Management: Cement Road stone Holding (CRH), 2021). Sometimes they try for hybrid
situation also where the price of their products are low and quality is differentiate from
others. With the help of these strategy CRH are trying to jumping in the international markets
are operating their services in the country like India, china and many more.
Is CRH Plc new strategy sustainable, discuss strategy direction and choices?
Yes, CRH new strategies are related to sustainable approaches, as they are created
long term values which are using by all areas of business strategy across there global
footprints of more than 3100 locations. According to their sustainability report of 2019, they
are expanding their business footprints on majorly focus on non-financial metrics and
performance indicators in different areas like workplace well-being, climate modification and
workplace inclusivity (Overview of sustananbility, 2021).
After becoming the leader in Ireland they try to expand their business and its
performance. As per this CRH strategy direction is grow into new markets through some
existing products which is related to the diversification process in ansoff’s matrix. The
ansoff’s matrix is strategically tool which is developed by companies to facilitate and provide
a direction to the business to make growth in the market and in their performance (Mitchell

and et.al., 2016). CRH follow the ansoff’s matrix strategy in order to develop the direction
and their choices. CRH choose the any of the four stages which affect their internal and
external factors of company. External factors may include political, technological, economic
and environmental factors and in internal factors talent management and capability of
managing resources in the organisation (How businesses use the strategic growth matrix to
inform growth strategies, 2021).
 Market penetrations: This is considered as the lowest risk options as because the
company can use industry expertise and effective competencies strategy. CRH use
acquisition and marketing within the existing companies, merging with similar
company and creation of strategic alliance in industry. But this will not reduce the risk
of CRH so this strategy is not suitable for the company.
 Market development: Here, the company can see higher risk as new location and
where company have to the gain the market share. The main risk is market
environment and competencies disadvantage. CRH can go new geographical locations
and enter into new market share. CRH can use this strategy which are required and
helpful for them to build up a strong image and enter into the new market they can
start producing DIY, security fencing and different type of clay products and glass
fabrication which currently operated in only USA (Price and Shanks, 2016). CRH can
easily expand that products in another new geographical areas. First they should test
the market and try to gain the brand image of the company which is suitable for the
company in order it achieve the desired targets of company.

Figure 3how businesses use the strategic growth matrix to inform growth strategies, (2021)
 Product development: This is one of the attractive tool and strategy only if the
company have a strong relationship with their customer they can look forward to gain
additional revenue from their already established market value and existing customer
base. CRH have a good track record in expanding their products, so they could
consider different products to improve their balance sheet and increase brand
awareness in market.
 Diversification: This is one of the highest risk in ansoff’s matrix model, as this is
related to both product and market development, the company may not have the
opportunity to pre-requisite competencies for entering into new markets. There are
two type of diversification are there which are related and unrelated diversification.
As for CRH, one of the appealing opportunity is transport as this will help in
producing support to centralise production facilities and further they can reduce the
cost of loner period. Unrelated diversification related to prove themselves as highly
financial position and with high reputation image.
Would you recommend any changes to CRH Plc approach? Justify your recommendations
CRH must go in the direction to low cost and try to differentiate their products for the
growth of the business and opportunities. When CRH consider different options then they
have the options to be offensive in market, defend and try to strengthen position and in last
they should use competitive strategy. CRH use defending and strengthening the positions as

the most important approach. With the help of porter’s generic and ansoff’s matrix it is
identified that the expansion of the company could provide a strain on the parent company
and some this will lead to reduce the procedure of company. The main key to success of
company is tighten the financial control, strong review and an impressive human resource
management process.
Further they can continue to penetrate their existing markets which help them to
improve the strong brand and reputation which are already established in Europe and North
America. They can further use Acquisition and merger techniques in order to improve their
position without leaving their parent country (Rahnev and Denison, 2018). They should
continue the investment in acquisitions to create the additional market share which increase
the company’s efficiencies. Further they should always continue their external factors which
include economic and political environment and they should make their strategies flexible
enough to alter the strategy according to the change and need of the company.
With the strong competitive energy and framework in the industry, CRH should be
able to work in new geographical locations, with having experienced managers to work more
smoothly transition. Merger and acquisition is used to identify potential business irrespective
of location and culture of market. Further they can use alliance, which will be helpful for the
company to maintain a balanced portfolio for the long term perspective. They should
complete a detailed research on market, people and location which are suitable for company.
CRH should create a new SBU and must be transfer some of the employee there to work in
the continuity and success of new SBU. The choice can be decided through choice matrix
which are helpful for the company in order to make a right choice. This matrix will be helpful
for the company as it will provide large verities of scope to work in new market.
Further they can develop new products, which are helpful for making strong
competencies and customer base to development of new products. They can use SFA’s
matrix which is developed by Gerry Johnson and Kevan Scholes to analysis the best strategic
possibilities. Suitability; this show that which opportunity is better for the company like in
CRH the diversification is the best opportunity to develop their products and growth.
Feasibility; means the option which is opted are feasible or not in the real market and
acceptability; which means the nature of accepting the product in the market by their
customer.

All these strategies and recommendation are helpful for CRH Plc., in order to
maximise their growth and profit (Price and Shanks, 2016). Furthermore they can develop
new and innovative sustainable opportunities to expand the growth of business in different
international market with the help of Merger, acquiring and alliance.
CONCLUSION
From the above assignment it is concluded that strategic and management decision is
very important for the company’s growth. Different type of theories and options are made to
create a successful in the market and finically steady and growing professional which help in
maximising opportunity with the support of strong policies and processes. Furthermore
development and retention programme of human resource management is useful in
identifying to manage profitability products, markets and different geographical locations. All
these factors are go through with the recognising and managing the impact of importance of
customer needs. These factors provide a long term future outlook for the growth of company
and evident a strong relation through creation of a stable collection and long term
sustainability in the market even the economic environment goes down as because companies
make all their plan robust and flexible nature which will help in growth of company.

REFERENCES
Books and Journals
Black, K., 2019. Business statistics: for contemporary decision making. John Wiley & Sons.
Collins, A.J. and Frydenlund, E., 2018. Strategic group formation in agent-based
simulation. Simulation, 94(3), pp.179-193.
Gati, I., Levin, N. and Landman-Tal, S., 2019. Decision-making models and career guidance.
In International handbook of career guidance (pp. 115-145). Springer, Cham.
Mitchell, R.K. and et.al., 2016. Stakeholder agency and social welfare: Pluralism and
decision making in the multi-objective corporation. Academy of Management
Review, 41(2), pp.252-275.
Price, R. and Shanks, G., 2016. A semiotic information quality framework: development and
comparative analysis. In Enacting Research Methods in Information Systems (pp.
219-250). Palgrave Macmillan, Cham.
Rahnev, D. and Denison, R.N., 2018. Suboptimality in perceptual decision
making. Behavioral and Brain Sciences, 41.
Online
How businesses use the strategic growth matrix to inform growth strategies, 2021. [Online].
Avalaible through:< https://doortodoormarketing.in/how-businesses-use-the-
strategic-growth-matrix-to-inform-growth-strategies/>.
Modern Roots of Strategic Management: Cement Road stone Holding (CRH), 2021. [Online].
Available through:< https://ukdiss.com/examples/modern-roots-of-strategic-
management.php>.
Overview of sustananbility, 2021. [Online]. Available through:<
https://www.crh.com/sustainability>.