Crh Plc. Strategic Analysis
Environmental analysis
First of all it is considered as crucial to find out in which environment the company CHR exists, therefore I decided to use Porter`s five forces model and Pest analysis. 1. 1 Porter`s five forces model
This model was articulated for the first time by Michael Porter in 1979 in his successful record-breaker book named “How competitive forces shape strategy” (Porter, p.78). Five forces are illustrated in following picture.
Source: Porter, p. 78
Before this analysis will begin, it is vital to stress that this model is well-known as an effective instrument. An advantage of this model is that it captures the immediate environment in which the company competes. It allows to clearly understand the forces which operate in the company`s environment and helps to identify those which affect the company in the nearest future. It is considered to be a powerful tool in determining the strategy. However everything has its deficiencies and this model is not the exception. In my point of view it is needed to combine this model with some of the others, because there are few issues which are not considered in it. To be specific, this model does not count with nonmarket changes such as interference of the government and political changes, fluctuation of the economy and the changes in behaviour of the competition. Porter´s model is criticized for the fact that it neglects analysis of regulations of the government and antitrust violations. Therefore, in this analysis it is needed to use PEST analysis to offer more accurate viewing to company`s environment to help to make and recommend better and more efficient strategy. (ref. č. 1)
The threat of new entrants
Construction or building industry includes standards and regulations, which are not homogeneous around the world. Therefore, in this field of business it might not be easily possible for new companies to settle down and succeed on the market. In fact, there are relatively high barriers for newly
First of all it is considered as crucial to find out in which environment the company CHR exists, therefore I decided to use Porter`s five forces model and Pest analysis. 1. 1 Porter`s five forces model
This model was articulated for the first time by Michael Porter in 1979 in his successful record-breaker book named “How competitive forces shape strategy” (Porter, p.78). Five forces are illustrated in following picture.
Source: Porter, p. 78
Before this analysis will begin, it is vital to stress that this model is well-known as an effective instrument. An advantage of this model is that it captures the immediate environment in which the company competes. It allows to clearly understand the forces which operate in the company`s environment and helps to identify those which affect the company in the nearest future. It is considered to be a powerful tool in determining the strategy. However everything has its deficiencies and this model is not the exception. In my point of view it is needed to combine this model with some of the others, because there are few issues which are not considered in it. To be specific, this model does not count with nonmarket changes such as interference of the government and political changes, fluctuation of the economy and the changes in behaviour of the competition. Porter´s model is criticized for the fact that it neglects analysis of regulations of the government and antitrust violations. Therefore, in this analysis it is needed to use PEST analysis to offer more accurate viewing to company`s environment to help to make and recommend better and more efficient strategy. (ref. č. 1)
The threat of new entrants
Construction or building industry includes standards and regulations, which are not homogeneous around the world. Therefore, in this field of business it might not be easily possible for new companies to settle down and succeed on the market. In fact, there are relatively high barriers for newly