MN6003 - CRH Plc: Strategic Analysis, Sustainability, Recommendations

This analytical paper examines CRH Plc's strategic success through the application of Porter’s Generic Strategies and Bowman’s Strategy Clock, identifying differentiation and hybrid strategies as key contributors. It evaluates the sustainability of CRH Plc's market penetration strategy, highlighting its role in value creation and competitive advantage. The paper recommends a shift towards a merger strategy to expand market share and organizational reach, justifying this change with SAFe criteria (Suitability, Acceptability, Feasibility). The analysis concludes that strategic management is crucial for aligning organizational goals and that a merger strategy could further enhance CRH Plc's competitive position and financial performance.

Business Management

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1. Application of Porter’s Generic Strategies along with Bowman’s Strategy Clock to the case
and using them for discussion of why CRH Plc has been successful so far................................1
2. Is CRH Plc new strategy sustainable, discussion of strategy direction and choices................4
3. Recommendation of any changes to CRH Plc approach with justification.............................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Business management refers to a discipline that includes coordination of all stages of
venture operation with the help of planning. Moreover, strategy plays key role in management of
business as strategic choices provide overall direction through establishing policies together with
plans to attain goals and further allocating resources in order to execute plans (Ansah,
Gardebroek and Ihle, 2021). CRH Plc has headquarters at Dublin, Ireland and it is leading
international diversified building materials group by employing around 85000 people, at more
than 3600 operating locations in 32 nations. It was established in 1970 with vision of becoming
leading building material business across the world.
The analytical paper includes application of Bowman’s Strategy Clock addition to
Porter’s Generic Strategies to discuss reason for success of the company so far. Further, it
includes explanation of sustainability of organisational new strategy and recommendation about
any changes in organisational approach.
MAIN BODY
1. Application of Porter’s Generic Strategies along with Bowman’s Strategy Clock to the case
and using them for discussion of why CRH Plc has been successful so far
CRH Plc is sole producer of cement along with principle producer of aggregates, concrete
commodities and asphalt in Dublin, Ireland. Its prominence is attached through formal
recognition along with awards for corporate governance. In order to analyse successful of entity,
application of some framework that are Porter’s Generic Strategies model as well as Bowman’s
Strategy Clock in context to CRH Plc are below’
Porter’s Generic model: The model was defined by Michael Porter as management tool
which provides clear choices when used effectively. It can be used with the purpose of
determining organisational course and maintaining long term benefits over rivals (Tsarouva,
2017). In context to CRH Plc, application of Porter’s Generic Model offers insights into
mechanisms which creates and dictate use of successful business model. Mentioned are some
strategic choices for CRH Plc;
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Figure 1:Porter’s Generic Competitive Strategies. 2021
(Source: Porter’s Generic Competitive Strategies. 2021)
Cost leadership Strategy: It is a kind of strategy wherein an organisation sustain success
by offering products that are high in demand at lowest possible prices. In relevance to CRH Plc,
cost leadership can be effective in success so far as being cost producer assist in finding and
exploiting all types of sources of cost advantage.
Differentiation Strategy: In this, organisational manager looks toward developing
uniqueness and attractiveness in offering for the purpose of engaging customers (Friis and
Nielsen, 2017). Business concerns which differentiate achieves success be meeting unique
demands of target segments and achieve rewards with premium prices. In context to CRH Plc,
application of differentiation strategy helps in achieving success by incorporating unique
attributes to attain an image that are more valued by customers.
Focus Strategy: It is associated to creating niche markets along with products which will
exist in such markets. In CRH Plc, application of focus strategy can lead to offering products at
lowest possible price and having unique attributes in niche market.
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From mentioned strategies of Porter’s Generic Model, it is analysed that using
differentiation strategy CRH Plc has been successful so far as it manufactures and distribute
wider range of building materials that are unique and different from rivals in the industry. Its
offering includes fundamentals of heavy materials as well as elements for constructing frame via
value added products which complete building envelope, distribute channels that serve
construction fit out addition to renewal for maintaining competitive success.
Bowman’s Strategy Clock model: It is developed by David Faulkner addition to Cliff
Bowman so to provide ways in which brand have multiple ways to position its offering on the
basis of price addition to perceived values (Kumar, 2021). With application of Bowman’s
Strategy clock model, managers of CRH Plc analyse their position in industry against
competitors. Description of strategies of the model is below:
Figure 2: Bowman’s strategy Clock Model. 2021
(Source: Bowman’s strategy Clock Model. 2021)
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Low price as well as low value added: The strategy includes selling products at possible
lowest prices.
Low price: It is about keeping lowest price option of organisational products in the
marketplace.
Hybrid: Herein, organisations combine product differentiation addition to competitive low
pricing so that consumer perceive added value.
Differentiation: It equates high perceived value and permits entities to compete in highly
dynamic market.
Focused differentiation: It is used by brands that emphasis on luxury along with exclusive
products which are high on quality and sold at higher rates (Wang, 2020).
Risky high margins: Organisation using the strategy looks to charge high prices for
offering which are perceived as mediocre in customer values.
Monopoly pricing: In this, business concern positions themselves as monopoly leader
because they are sole manufacturers and distributors of specific product type.
Loss of market share: It entails products with low perceived values than high prices.
As per description of Bowman’s Clock Model, it is seen that use of hybrid strategy at
CRH Plc resulted in offering at relatively low cost with higher perceived values in competitive
marketplace to achieve success so far. With this strategy, company keeps its values as well as
quality good and assures consumers at reasonable prices that build customer loyalty leading to
being success so far in the industry.
2. Is CRH Plc new strategy sustainable, discussion of strategy direction and choices
Strategic choices and direction are said to concentration strategies that can be applied for
growth addition to expansion in current industry. Key focus of strategic choices in an
organisation is to enhance growth through concentrating on core practices as well as staying in
same sector. Moreover, it helps in building existing competences for attaining desired
competitive edge (Wehr, 2021). In context to CRH Plc, there are various strategic direction and
choices available to an establishment in form of Ansoff Matrix which is popular strategic
planning tool that assist strategists for devising strategies in context to future growth. Discussion
of four directions or fields of the matrix as well as understanding growth opportunities that it
offers to CRH Plc are below:
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Figure 3: Strategic Growth with Ansoff Matrix. 2021
(Source: Strategic Growth with Ansoff Matrix. 2021)
Market penetration: The strategy is about winning new shares of market with current
offerings. When market penetration strategy is used in CRH Plc then it can help in making
attempts to sell more in market to potentials, prospects along with customer competitors. It helps
in enhancing market share and relative growth opportunities.
Market development: The strategy aims to develop new market by offering current
products. It usually entails minor changes in products for adapting new markets (Hickman and
Silva, 2018). In CRH Plc, use of market development strategy can result in expansion into new
market with minimal product development that can be accomplished through distinct customer
segments, new areas of country and international markets.
Product development: The strategy takes place at the time when managers plan to
launch new product with existing customer in current market. Within CRH Plc. Product
development strategy can be used for replacing existing offering as well as expanding product
range.
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Diversification: The strategy for offering completely new products and services in new
market. When professionals of CRH plc uses diversification strategy then tends to face greatest
failure risks but the strategy offers greatest potentials for aspects of growth.
It has been analysed that market penetration is the current growth strategy of CRH Plc
through which managers continuous improve and value realisation in its offering for current, new
and customer competitors in Ireland and other nations. The strategy helps in creating values and
delivering superiors returns to stakeholders so to attain and maintain sustainable success. It can
be said that the strategy of CRH Plc is sustainable in nature as it discourages competitors to
come in path of making market share and leads to direct greater sales for generating profits to the
company. With this, marketers evaluate need of target segments quickly and have knowledge
about pros and cons of rival’s offering. Market penetration strategy guides in direct brand
awareness that create customer referrals resulting to sustainable awareness about the company
among its current market (Board and National Academies of Sciences, Engineering, and
Medicine, 2019). This enables the entity to attain strategic balance as well as establishing diverse
number of platforms to deliver superior and sustained performances within the dynamic industry.
3. Recommendation of any changes to CRH Plc approach with justification
CRH Plc is a popular diversified building material group that operates at more than 3600
locations within 32 countries worldwide. It is an individual producer of cement along with
principal manufacturer of concrete commodities, asphalts and aggregates. It has almost 50 years
of operation in the market and have attained major growth with the help of multiple development
phases in organic market penetration approach, larger acquisition approach and developing better
valuable growth platforms.
To managers of CRH Plc, it is recommended to change its individual working approach
to merger in which the company will form agreement with other company to expand into new
segments, organisational reach and gaining larger market share. CRH Plc can form a merger
agreement with popular company in the industry at different location so to increase market
shares in UK. SAFe criteria are fairer way to weigh up strategic option that are available to an
organisation. SAFe criteria for merger approach to CRH Plc is as follows:
Suitability: It defines whether or not the change in approach or recommended strategy
will do what the entity wants it to do (Coutinho, 2018). In context to merger, it will help CRH
Plc to gain access to larger market as well as customer base in order to reduce competition and
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attaining economies of scale. With this, strengths of the company will be used effectively and
lead to overcome complexities which are faced in managing operations.
Acceptability: The criteria looks after measuring return, stakeholder reactions and risk
that result from change in current approach. For merger strategy, returns are measured by CRH
Plc on the basis of benefits that stakeholder expect from it in financial and non-financial manner.
All stakeholders including customers, employees, managers and many more will be benefitted
from the merger approach as it has possibilities to give higher returns for their efforts. Merger
will enable all stakeholders to be more profitable and attain greater success.
Feasibility: The portion of feasibility looks whether an organisation have required
resources, aptitudes and potentials for actually executing the strategy (Katzenstein, 2019). In
context to merger approach for CRH Plc, the strategy will work in practice as it will benefit the
organisation to gain wider market share together with remaining ahead of competition.
Moreover, it helps the venture in avoiding duplication of working leading to reducing
unnecessary expenses and making more revenues. People of the company have skills to carry out
the strategy effectively. The strategy can be financed easily as merging with other company
needs investment that managers of CRH Plc can obtain from multiple sources and finance it with
required amount. All the required resources including human resources, physical resources and
others can be obtained and integrated between organisation to achieve desired objectives from it.
CONCLUSION
From the presented analytical paper, it is concluded that strategy prevents human resources
to lose sight of their personal objectives and organisational aims. Business management is related
to income and profitability. Porter’s Generic strategy model elaborates ways in which a company
pursue competitive advantage within selected market scope. Bowman’s Clock model provides
various options for positioning a company within a market based with price and perceived value.
Ansoff matrix is a tool that is opted for analysing and planning strategies and tactics to attain
growth. Merger is the recommended strategy as it has possibilities to help the company in
achieving its objectives with required resources.
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REFERENCES
Books and Journals:
Ansah, I. G. K., Gardebroek, C. and Ihle, R., 2021. Shock interactions, coping strategy choices
and household food security. Climate and Development, 13(5), pp.414-426.
Board, S. S. and National Academies of Sciences, Engineering, and Medicine, 2019. Thriving on
our changing planet: A decadal strategy for Earth observation from space. National
Academies Press.
Coutinho, S. W., 2018. Breaking Rank: How to lead change when yesterday's stories limit
today's choices. Steven Coutinho.
Friis, C. and Nielsen, J.Ø., 2017. On the system. Boundary choices, implications, and solutions
in telecoupling land use change research. Sustainability, 9(6), p.974.
Hickman, C. R. and Silva, M. A., 2018. Creating excellence: Managing corporate culture,
strategy, and change in the new age. Routledge.
Katzenstein, P. J., 2019. Corporatism and change. Cornell University Press.
Wang, H., 2020. Timing of Industrialization, Domestic Politics and Strategic Choices: A
Theoretical Evaluation of American Grand Strategy in Managing the Rise of
China. Chinese Journal of International Review, 2(01), p.2050002.
Online:
Kumar. P. 2021. Bowman’s strategy Clock: would it be the right tool to accelerate your market
position. [Online]. Available through: < https://slidebazaar.com/blog/bowmans-
strategy-clock-would-it-be-the-right-tool-to-accelerate-your-market-position/>
Tsarouva. M. 2017. Porter’s Generic Competitive Strategies. [Online]. Available through:
https://www.itechart.com/blog/porters-generic-competitive-strategies-startups/
Wehr. A. 2021. Strategic Growth with Ansoff Matrix. [Online]. Available through: <
https://www.tractionwise.com/en/magazine/ansoff-matrix-growth/>
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