Internal Strength 1- Digital Transformation in Construction 2- Successful track record of TWOS Analysis launching new products 3- Strong track record of project Internal Weaknesses 1- High dependence on existing supply chain 2- Aligning sales with marketing 3- Employees’ less understanding of CRH strategy management in the 4- Low market penetration in new markets Construction - Raw Materials 5- Need for greater diversity industry 6- No frontier risks strategy 4- Effective Research and Development (R&D) 7- Slow to strategic competitive environment developments 5- Diverse revenue streams 8- Workers concerns about automation 6- Cross disciplinary teams 9- High dependence on CRH ‘s star 7- Superior customer experience products 8- Ability to recruit top talent 9- High switching costs 10- Operational resilience 11- High brand equity External Opportunities 1- 1- Identify volunteer opportunities 2- 2- Building a culture of innovation 3- 3- Redefining models of collaboration and team work 4- 4- Better consumer reach 5- 5- Remote work and new talent hiring opportunities 6- 6- Buying journey improvements 7- 7- Learning at scale 8- 8- Reforming the budgeting process 9- 9- Low interest rates SO Strategy WO strategy 10-Manufacturing automation 11-Harnessing reconfiguration of the global supply chains 12-Use of Bitcoin and other crypto currencies for transactions External Threats 1- Shortening product life cycle 2- Barriers of entry lowering 3- Increasing wage structure of CRH 4- Capital market disruption 5- Increasing international competition and downward pressure on margins 6- Technology acceleration in Forth Industrial Revolution 7- Regulatory challenges 8- Consumer confidence and its impact on CRH demand 9- New competition 10- Instability in the European markets 11- Stagnating economy with rate increase 12- Learning curve for new practices ST strategy WT strategy Strengths of CRH | Internal Strategic Factors What are Strengths in SWOT Analysis Ability to lead change in Construction - Raw Materials – CRH is one of the leading players in the Construction - Raw Materials industry in United Kingdom. Over the years it has not only transformed the business landscape in the Construction - Raw Materials industry in United Kingdom but also across the existing markets. The ability to lead change has enabled CRH in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets. Digital Transformation in Construction - Raw Materials industry - Digital transformation varies from industry to industry. For CRH digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. CRH has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities. Successful track record of launching new products – CRH has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. CRH has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network. Strong track record of project management in the Construction - Raw Materials industry – CRH is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects. Effective Research and Development (R&D) – CRH has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – CRH staying ahead in the Construction - Raw Materials industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders. Diverse revenue streams – CRH is present in almost all the verticals within the Construction - Raw Materials industry. This has provided CRH a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021. Cross disciplinary teams – Horizontal connected teams at the CRH are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace. Superior customer experience – The customer experience strategy of CRH in Construction - Raw Materials industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement. Ability to recruit top talent – CRH is one of the leading players in the Construction - Raw Materials industry in United Kingdom. It is in a position to attract the best talent available in United Kingdom. The firm has a robust talent identification program that helps in identifying the brightest. High switching costs – The high switching costs that CRH has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers. Operational resilience – The operational resilience strategy of CRH comprises – understanding the underlying the factors in the Construction - Raw Materials industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive. High brand equity – CRH has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled CRH to keep acquiring new customers and building profitable relationship with both the new and loyal customers. Weaknesses of CRH | Internal Strategic Factors What are Weaknesses in SWOT Analysis The weaknesses of CRH are Ability to respond to the competition – As the decision making is very deliberative at CRH, in the dynamic environment of Construction - Raw Materials industry it has struggled to respond to the nimble upstart competition. CRH has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business. High dependence on existing supply chain – The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of CRH supply chain. Even after few cautionary changes, CRH is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left CRH vulnerable to further global disruptions in South East Asia. Aligning sales with marketing – From the outside it seems that CRH needs to have more collaboration between its sales team and marketing team. Sales professionals in the Construction - Raw Materials industry have deep experience in developing customer relationships. Marketing department at CRH can leverage the sales team experience to cultivate customer relationships as CRH is planning to shift buying processes online. Employees’ less understanding of CRH strategy – From the outside it seems that the employees of CRH don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy. Low market penetration in new markets – Outside its home market of United Kingdom, CRH needs to spend more promotional, marketing, and advertising efforts to penetrate international markets. Need for greater diversity – CRH has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background. No frontier risks strategy – From the 10K / annual statement of CRH, it seems that company is thinking out the frontier risks that can impact Construction - Raw Materials industry. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc. Slow to strategic competitive environment developments – As CRH is one of the leading players in the Construction - Raw Materials industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Construction - Raw Materials industry in last five years. Workers concerns about automation – As automation is fast increasing in the Construction - Raw Materials industry, CRH needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization. High dependence on CRH ‘s star products – The top 2 products and services of CRH still accounts for major business revenue. This dependence on star products in Construction - Raw Materials industry has resulted into insufficient focus on developing new products, even though CRH has relatively successful track record of launching new products. Skills based hiring in Construction - Raw Materials industry – The stress on hiring functional specialists at CRH has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach. CRH Opportunities | External Strategic Factors What are Opportunities in the SWOT Analysis The opportunities of CRH are Changes in consumer behavior post Covid-19 – consumer behavior has changed in the Construction - Raw Materials industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. CRH can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. CRH can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times. Identify volunteer opportunities – Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. CRH can explore opportunities that can attract volunteers and are consistent with its mission and vision. Building a culture of innovation – managers at CRH can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Construction - Raw Materials industry. Redefining models of collaboration and team work – As explained in the weaknesses section, CRH is facing challenges because of the dominance of functional experts in the organization. CRH can utilize new technology in the field of Construction - Raw Materials industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc. Better consumer reach – The expansion of the 5G network will help CRH to increase its market reach. CRH will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey. Remote work and new talent hiring opportunities – The widespread usage of remote working technologies during Covid-19 has opened opportunities for CRH to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for CRH to hire the very best people irrespective of their geographical location. Buying journey improvements – CRH can improve the customer journey of consumers in the Construction - Raw Materials industry by using analytics and artificial intelligence. It can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses. Learning at scale – Online learning technologies has now opened space for CRH to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards. Reforming the budgeting process - By establishing new metrics that will be used to evaluate both existing and potential projects CRH can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization. Low interest rates – Even though inflation is raising its head in most developed economies, CRH can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business. Manufacturing automation – CRH can use the latest technology developments to improve its manufacturing and designing process in Construction - Raw Materials sector. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping. Harnessing reconfiguration of the global supply chains – As the trade war between US and China heats up in the coming years, CRH can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help CRH to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets. Use of Bitcoin and other crypto currencies for transactions in Construction - Raw Materials industry – The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for CRH in the Construction - Raw Materials industry. Now CRH can target international markets with far fewer capital restrictions requirements than the existing system. Threats CRH External Strategic Factors What are Threats in the SWOT Analysis The threats of CRH are Shortening product life cycle – it is one of the major threat that CRH is facing in Construction - Raw Materials sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc. Barriers of entry lowering – As technology is more democratized, the barriers to entry to Construction - Raw Materials industry are lowering. It can presents CRH with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Construction - Raw Materials sector. Increasing wage structure of CRH – Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of CRH. Capital market disruption – During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of CRH. Increasing international competition and downward pressure on margins – Apart from technology driven competitive advantage dilution, CRH can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate CRH prominent markets. Technology acceleration in Forth Industrial Revolution – CRH has witnessed rapid integration of technology during Covid-19 in the Construction - Raw Materials industry. As one of the leading players in the industry, CRH needs to keep up with the evolution of technology in the Construction - Raw Materials sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019. Regulatory challenges – CRH needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Construction - Raw Materials industry regulations. Consumer confidence and its impact on CRH demand – There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in Construction - Raw Materials industry and other sectors. New competition – After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for CRH in the Construction Raw Materials sector and impact the bottomline of the organization. Instability in the European markets – European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. CRH will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe. Stagnating economy with rate increase – CRH can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the Construction - Raw Materials industry. Learning curve for new practices – As the technology based on artificial intelligence and machine learning platform is getting complex, CRH may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Construction - Raw Materials sector. High level of anxiety and lack of motivation – the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. CRH needs to understand the core reasons impacting the Construction - Raw Materials industry. This will help it in building a better workplace.
