Q.1 What strategies does CRH pursue? Describe the main elements of the successful strategic approach employed by CRH in a difficult industry environment. As the products of this industry are standardized, stable and similar across the markets, the mode of production is also standard within the industry and involves unsophisticated processes. This provides little ground for the implementation of product differentiation strategy for the firms in this industry. With low chances of differentiation and intense competition due to low barriers of entry, the most suitable strategy for CRH is to diversify through market penetration. CRH initiated the competitive strategy of vertical integration in the domestic market and acquisition-led diversification overseas. This made it possible for CRH to diversify its risks and gain more opportunities. In addition, CRH has grown in the market through pursuing relentless market penetration through acquisition-led strategy. They have the best track record of its peer group of growing returns through acquisitions and the Group’s acquisition performance was well known widely. Finally, rigorous, comprehensive and inclusive, CRH’s acquisition strategy was singular in conception and execution and had proven very difficult to duplicate.
Q.2 Outline the nature of parenting advantage provided by the centre in CRH and the extent of value created. Most of CRH's acquisitions continue to operate under their former names and management, while taking advantage of their parent company's strong market position and international infrastructure. CRH have provided their subsidiaries control, direction and assistance through its many years experience. Overtime, pool of managers had increased, as a result of continuing growth and relentless acquisitions. Managers were drawn from internally developed operating managers, experienced finance and development professionals, and owner-entrepreneurs from acquired company, providing a healthy mix and dept...
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