Case Study based on key reading.Strategic Management Essay

Case Study based on key reading.Strategic Management - Essay Example Application of the model in CRH Plc will enable the company identify the external forces that affects the external activities of the company. This enables the formulation of improvement strategies that enhances performance in the changing marketing environment. The model generalises the strategies required in gaining competitive advantage in the industry for easy application (Onsman, 2004). However, application of the model may be misleading because it assumes a classic perfect market although it is clear that the construction and building industry is faced with numerous challenges. The SWOT analysis is crucial because it summarises the both the internal and external environment of a company i.e. strengths and weaknesses coupled with the opportunities and threats. The knowledge of both the internal and external environment will enable the company adopt measures appropriate for addressing both the internal and external challenges. However, analysis of the strategic management status o f the company by use of the SWOT framework requires considerable time and energy when being applied in large corporations. The PESTEL framework assists in the identification of the macroeconomic factors that affects the whole industry, certain markets or the company. This is because many factors in the macroeconomic environment have significant impact on the overall managerial behaviour. According to the Global Industry Analysts (2011), the tool is crucial in understanding the factors that can influence the industry growth and decline. PESTEL analysis can also guide the company on the direction that they should take in avoiding failure or losses. However, undertaking the PESTEL is tedious and may be ineffective to large organisations. The framework is also limiting because it only focuses on the external environment of the company. Critical Analysis Porter’s Five Forces Analysis Rivalry among the Existing Firms The company has numerous competitors in the industry, especially the well established multinational companies such as Lafarge S.A. and Holcim Ltd. In 1990, the market was dominated by large companies that capitalised on the strength in their local markets to expand internationally. According to Davenport (2002), the competing companies increased their supply rate when the market for construction industry was booming locally; leading to increased competition for the local markets. This made CRH to venture into acquisition of smaller companies in both local and international hemispheres such as 26% shares of a North-eastern Chinese plant and a 50% stake of an Indian company in order to increase dominance both local and international markets (Batchelor, 2001). Bargaining Power of Customers The construction industry is extremely fragmented with the production rate varying depending on the location as well as other factors such as values and cultures. The application of the building regulations regarding the location of the