Strategic Analysis Of Crh Plc

0 Comment

It now utilises a unique strategy for corporate management, strategy and competitive drives. The report will first identify the strategy that CRH pursues. This will involve the critical analysis of the strategic approach used by the company to attain success over its history. The second section of the essay will examine the nature of parenting advantages that CRH has attained. It will examine the extent to which CRH has created value over the years by vertical integration and entrance into other markets. The third segment of the paper will critique the corporate-level management of the company and how this has been used to attain optimal results. This strategic analysis will involve the critique of secondary sources to ascertain important ideas and concepts. This will be applied in the analysis and eventually culminate in the final portion which will involve the development of a programme for future action by the corporate management team of CRH. Strategy of CRH Strategy is defined as the way a company creates value through the configuration and coordination of its multimarketing activities (Furrer, 2011 p2). This means strategy is about the ways a means a company makes the best of its activities to provide optimum results from its affairs. Johnson and Scholes state that strategy has three main features: 1. It is a long-term plan 2. It affects the entire organisation and 3. It involves top level management Strategy is therefore the plan and pattern of an organisation which is used to streamline its affairs in order to deal with competition and thrive in an industry (Langeer and Hapiewocki, 2011). It is formulated by careful examination of the business environment and the formulation of an appropriate strategy (LaForge et al, 2010). The strategy of CRH plc revolves around three things, vertical integration/internationalisation, product development and niche-market leadership. This enables CRH to maintain a robust and strong system of managing across a wide frame of activities and products to retain competitive advantage and maintain leverage. Vertical Integration amp. Internationalisation Vertical integration is the combination in one firm of two or more stages of production normally operated by separate firms (Johnson and Scholes, 2012). This means a firm acquires another entity that operates within its industry and merges the different businesses to operate and attain results. Since the 1970s, CRH has sought to expand and acquire new entities around the world in order to expand into different markets. They used the expertise of the local markets and this allowed them to control different markets and gain advantage in those foreign markets. Through this, CRH, an Irish entity has 50% of its revenue from North America and 35% from Europe and is growing in the emerging markets with 15% of its revenue from this part of the world. Clearly, the process of vertical integration is helping them to control strategic outlets. Product Development The consequence of globalisation and internationalisation has caused CRH to adapt to the local environments within which they operate. To this end, CRH has become a major entity in product development to fit the exact needs of various global segments they operate within. CRH produces various products and services that are in demand in a given environment and they learn about it through their federal system of management which allows various units to remain autonomous. This enables the various regional leaders to come up with strategies and develop products that are relevant to their unique markets and their unique needs and expectations in the region. Product development is aided by a proactive system where the market research is conducted and revenue generation is examined to attain a