STRATEGY CONCEPTS AND APPLICATIONS

ASSIGNMENT

Submitted by- MODINA MONIR SAFA

Submitted to- JIM MILLIGAN

Submission date-21-01-2011

WORD COUNT: 2560 (Exclusion of cover page, table of contents,

refference, appendix )
 TABLE OF CONTENTS

PAGE NUMBER

EXECUTIVE SUMMARY…………………..

INTRODUCTION……………………………… 1

OBJECTIVE ………………………………… 1

CORPORATE MANAGEMENT ……………. 1

MAJOR COMPETITORS OF CRH………… 1

ANALYSIS ………………………………….. 2

SWOT …………………………………………. 2
PEST …………………………………………… 3
FIVE FORCES INDUSTRY …………………. 4
BCG …………………………………………… 4

UPWARD SPIRAL OF CREATIVE BUSINESS ……….5

FACTORS BRINGING CHANGE

TO CRH’S INDUSTRY …………………… 6

CONCLUSION ………………………… 6

RECOMMENDATION ……………………. 7

REFFERENCES …………………………… 8

APPENDIX ……………………………. 9
Executive summary:
In strategy concepts and applications module assignment I have critically evaluated the
competitive position of CRH through the use of positioning tools such as PEST, SWOT,
BCG, Five forces industry analysis .i have also identified the driving factors which bring
change in the industry. after evaluating all the analysis and factors I have recommended
some future strategic options on the basis of relevant theories and frame work for CRH to
remain competitive .i have put emphasis on it’s business portfolio composition and
product market relationship. through this whole report the current competitive position of
CRH and future options are highlighted. The strengths , weaknesses, threats,
opportunities, political, economic ,socio cultural factors ,industry analysis through all
these the analysis has been done.
 Introduction:

CRH plc was formed through a merger in 1970 of two

leading Irish public companies, Cement Limited (established
in 1936) and Roadstone Limited (1949). The newly formed
group was the sole producer of cement and the principal
producer of aggregates, concrete products and asphalt in
Ireland. In 1970 CRH had sales of c. €26m, 95% in Ireland.
CRH is an Ireland-based global holding company that
manufactures and distributes building materials in the United
States and throughout Europe. The head quarter of CRH is in
Dublin, employed 80000 people in over 1000 subsidiaries in
more than 3000 locations in 26 countries .The firm operates
three segments: materials, products, and distribution. The
materials segment produces cement, aggregates, and asphalt.
The products segment makes a variety of materials such as
concrete and architectural glass. The distribution segment
supplies roofing and interior construction products. CRH was
awarded for financial reporting , investor relations, and
excellence innovation in environmental and safety practices.

Objective: the objective of CRH is to maintain and develop

a balanced portfolio across regions, products and construction
sectors.
CRH’s strategic vision is to be a responsible international
leader in building materials delivering superior performance
and growth. The group’s strategy is to seek new geographic
platforms in it’s core businesses and to achieve strategic
balance .

CORPORATE MANAGEMENT:

The corporate management of CRH was strong and under

control. integration management of CRH was decentralized,
coordinated and standard.

Major competitors of CRH:

1. LAFARGE COPPEE S A:

1
 The company is one of the world's top makers of cement,
aggregates, concrete, and gypsum (alongside such
heavyweights as Holcim and CEMEX). Cement accounts for
about 60% of the building materials supplier's sales. Lafarge
gypsum products (about 10% of sales) include wallboard,
plasters, and insulation. The company has more than 2,000
plants operating around the world. Lafarge's growth strategy
is to shift focus from Western Europe and North America to
emerging markets such as Africa, the Middle East, Asia,
Central Europe, and Latin America, which now account for
more than half of sales.

2. CEMEX SAB DE CV:-3rd

The building materials company is one of the top cement

makers in the world (along with Lafarge and Holcim). The
majority of its sales come from cement; the company has
more than 60 cement plants and an annual production
capacity of more than 95 million tons. It also produces,
markets and distributes ready-mix concrete, aggregates, and
clinker (an intermediate product used to make Portland
cement). CEMEX operates in North America (through
CEMEX Inc.), as well as in Africa, Asia, Europe, the Middle
East, and South America. The US, Mexico, and Europe
account for about 80% of revenues.

3. HOLCIM LTD Profile

Holcim is one of the world's largest cement makers (along
with CEMEX and Lafarge) with an annual production
capacity of approximately 200 million tons. The company
operates in some 70 countries around the world; its
international subsidiaries include Holcim (US),St. Lawrence
Cement in Canada, Aggregate Industries in the UK, Holcim
(Australia), and Holcim Apasco in Mexico. Although
geographically diverse, Holcim sticks to the basics when it
comes to products: cement, clinker, concrete, aggregates, and
lime. The company also offers research, import/export
trading, consulting, and management services for the
construction industry.

Analysis:
In the combination of Pest and Swot analysis which reveals
driver of change in an industry. Five forces analysis can
reveal insights about potential future attractiveness of

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 industry. through this whole report after analyzing Swot ,pest
BCG and five forces analysis some driving factors are
identified which bring changes in it’s industry .and also some
strategic options are offered to remain competitive and to
continue it’s unrivalled growth.

SWOT:
Some major strength are mentioned here-
STRENGTH:

• The major strength of CRH enjoying

36 years of unrivalled growth and
performance should be continued in the long
run to hold it’s position in building material
industry.

• two characteristics of CRH

product/service portfolio is leadership and
deliberate geographic balance of product and
segments which smoothen the effects of
varying economic conditions and provided
greater opportunities for growth.
• CRH’s approach of project evaluation,
approval and review should be more focused.
• For achieving continuous success. an
other most important strength of CRH is that
cash earnings were two third higher than
reported EPS. This is a major factor which
enabled CRH to achieve it’s strategy
acquisition led expansion overseas.

Weakness:

• the finance functions of CRH was conservative. So,

CRH should change it as evolutionary change.
• Technology is non proprietary as due to high
transportation cost, economies of scale became
outweighed .so, to have larger economies of scale it’s
technology should be protected by patent, copyright.

Opportunities;

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 • To remain competitive in building material industry
CRH should adopt the opportunity of development of
new plants, capacity extension and major upgrades.
To expand it’s business into different regions it
should keep the balance between different geographic
segments.

Threats;
• CRH’s expectation of earning 15% return on assets is
a threat for CRH as they were not able to achieve their
target. So, CRH should have correct estimation of
RONA to sustain development.

Pest analysis:

• Economic factors
-due to being in mature stage CRH enjoyed stable
economy.
-balance in segmentation of different geographic areas.
-high value ratio results high transportation cost which affect
it’s economy .

• Political factors:

1.irish operation under the CRH portfolio had a low rate

of manufacturing corporation tax(12.5)%

2.due to often change in position of managers corruption

became low, as job description were flexible.
Which affects it’s political environment.

• Technological factors:
-standard product and market affect it’s technology.
-utilization of communication technology
-use of technical advisors at divisional level. these factors
affected CRH’s competitive position.

• Socio cultural factors:

-harmonization of customer needs.
-acquiring professionals from different regions.
These factors are affecting CRH’s culture.

5 forces industry analysis:

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 1.Threat of established rivals:
After analyzing I came to know the threat of rivals are low
for CRH. So, it is a big competitive advantage for CRH.

2.Threat of new entrants:

CRH has high threat of new entrants. So ,it should focus on
the common forms of new entrants to reduce all these factors.

3.Threat of substitutes:

As the threat of substitutes for CRH is high it should produce

differentiated product to reduce this threat.

4.Bargaining power of customers:

CRH has low bargaining power of buyers which a
competitive advantage for CRH.

5. Bargaining power of suppliers:

It is also a competitive advantage for CRH as
bargaining power of suppliers are also low.

BCG:
After analyzing BCG of CRH i came to know which products
and materials are profitable for CRH and would help CRH to
maintain it’s competitive position.
STARS:
U.S asphalt ,US concrete products US architechtural glass
fabrication etc which are stars means they have high growth
and high market share. So, CRH should invest more in these
products and materials as they are enjoying a number 1
.position in an industry

QUESTION MARK:
US aggregates, US interior product distribution are question
marks which market growth rate is high and market share is
low. . They are enjoying number 3 or 4 position in an
industry.

CASH COW:
ready mix concrete (America) are cash cow enjoying number
.6 position in an industry

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 UPWARD SPIRAL OF CREATIVE BUSINESS:

I have related the concept of the fim matters with CRH.

‘upward spiral of creative business’
1.internal change and growth in profits-
Inspite of small size and limited scope ,headquarters drove
the development and integration of CRH through formal and
informal mechanisms.
FORMAL MECHANISM:
Strategy was reinforced by rigorous measurement, evaluation
and control processes. CRH also adopted management
development system to develop the critical experience base
of managers. The adopted programs are –the management
seminar, the development forum, a leadership development
programme (LDP1), the business leadership programme
(BLP)

INFORMAL MECHANISM:
CRH continually reinforced it’s core values in formal
statements of strategy , in external and internal
communications and through corporate folklore.

2.merger and internal growth:

CRH was formed in 1970 following the merger of Irish
cement and Roadstone , an Irish building material company
through three major phases of development.
-organic market penetration in Ireland.
-acquisition led overseas expansion.
-product focus, larger acquisition.

3.More change:
CRH’s geographic , product and segment balance which
smoothed the economic conditions and provided greater
opportunities for growth.
The continous improvements was relentless.

4.greater profitability:
CRh had a strong and consistent track record of financial
performance. CRH enjoyed a premium of 2 % in the bell
weather return on capital employed ratio.
Cash earnings were two thirds higher than reported EPS
which is the major factor enabling CRH to fund it’s
acquisition led expansion overseas.

5. number one position:

6
 From 1978 to 2006 CRH completed around 620 deals,
spending over €13.5 bn over 90%in the period since 1995.
CRH has the best track record of it’s peer group….of
growing returns through acquisitions. it was estimated that
acquisition accounted for 70%of CRH’s profit growth .
As a result, with the passage of time it will be in number 1
position .as it is already in position of top five building
material companies.

The factors bringing change to crh’s industry:

Below some internal and external factors are mentioned

which bring changes in CRH’s industry. It can also named as
drivers of industry development.
Internal factors:

• . close operational control

• ability to react to change.
• instead of small size and limited scope ,head quarters
drove the development and integration of CRH
through a variety of formal and informal mechanisms
such as reinforced strategy by rigorous
measurement ,evaluation and control, flexibility of
hierarchy and job description which is internal driving
factor
• small team of experts at local, regional and
international levels facilitated by technical advisors
which resulted in highly innovative ideas exchanges
of products.
External driving factors:
• .local contacts
• personal service.
• acquisition lead expansion of medium sized firms.
• focsed on overseas expansion.
• focused on from product and from medium to larger
acquisitions.
• after the formation of CRH in 1970 the three major
economic drivers are –organic market penetration,
acquisition led overseas expansion and focus on
product and laregr acquisition which is economic
driver.
• CRH’s deliberate geographic ,product and segment
balance which smoothed the effects of varying
economic conditions and provided greater
opportunities for growth.

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 • . from 1978 to 2006 CRH has the best track record of
it’s peer group….of growing returns through
acquisitions.
• . a major factor which enabled to acquire it’s strategy
acquisition led expansion overseas.

Conclusion:
if I relate CRH’s current competitive position with the stages
of lifecycle of a company ,it is clear that CRH is now in
mature stage. As it’s high growth rate , unrivalled growth,
stable market, customers’ homogenizing needs, market
capitalization, experienced managers all of these factors are
the indicator of it’s industry evolution stage. as we know
there are 4 stages of life cycles-introduction, growth, maturity
and decline. So, being in the 3rd stage to remain competitive
in the building material industry and to achieve it’s objective
CRH ‘s competitive positioning is very much important. for
this some positioning tools are used in this report. -SWOT,
PEST, BCG, FIVE FORCES ANALYSIS. On the basis of
these tools some future strategic options are recommended to
hold it’s position in the long run.

Recommendation:

After analyzing all the forces above I would like to

recommend some strategic options for CRH regarding it’s
business portfolio composition and the product market
relationship to remain competitive.
Firstly I will explain business portfolio composition. Which
means in which area CRH should continue it’s businesses. in
CRH’s business portfolio two market stood out which were
main driver of growth since early 1990s US market operation
and Irish market. CRH should invest more in this two
markets because according to analysts estimation 40%return
on assets for the group’s Irish operations reflected CRH’s 60
% share of the cement market on total island of Ireland.
moreover. in Irish construction, a low rate of manufacturing
corporation tax. CRH’s federal structure comprising a small
central headquarter and four regionally focused product

8
 divisions should be continued to capitalize on local market
knowledge and a high degree of individual responsibility to
operational managers. The repair maintenance and
improvements (RMI) sector is basically greater than the half
of the total output. it has the ability to recover quickly .so,
CRH should increase investment in this sector.

Next I will focus on product market relationship. Here

market segmentation and market concentration will be
described. Through market segmentation CRH can address
the need for a product or service that is not being provided by
any other production.
In market concentration there are manufacture and
distribution of primary materials, heavy side building
products and materials and light side building products and
materials.
In CRH primary sector was more concentrated and products
and distribution were less contributed.
Some more future strategic options are given below to remain
competitive:
• in 2007 though the housing was slow in USA and
IRELAND it should invest more in this sector as it’s
overall impact on CRH was around 10%of sales, and
was offset by growth in other sectors of activity.
• Cash earnings were consistently around two-thirds
higher than reported EPS a major factor enabling
CRH to fund its acquisition led expansion overseas.
So, to achieve it’s strategy of acquisition CRH should
maintain this earning.
• Hierarchy and job descriptions were highly flexible
but not in POLAND .so, it should implement this in
POLAND.
• Continouos improvement factors should be continued
for further future success. such as- market driven
policy, remuneration policy, the restless culture of
performance and achievement,
• Buying industry has high profitability than supplier
industry .so, to overcome the threat as a supplier
company CRH should try to focus more on supplying
industry.

• as US operation in CRH portfolio resulted average

returns and remarkable low volatility .so, it should
invest or expand more in US .

9
 • The major strength of CRH enjoying 36 years of
unrivalled growth and performance should be
continued in the long run to hold it’s position in
building material industry. due to low competition in
this industry there is also existence of low barrier
entry.
• CRH’s approach of project evaluation, approval and
review should be more focused. CRH should also be
remain same in structuring the management team as
before. it should also maintain external and internal
relations
• CRH should have a framework for forecasting
evolution. It should adopt evolutionary change. Like
through acquisition long run changes in growth,
accumulation of experienced professionals , product
innovation etc.
• CRH should use communication technology as
opportunity to achieve operational best practice.

References:

http://biz.yahoo.com/ic/91/91789.html
http://www.dailyfinance.com/company/lafarge-coppee-s-
a/lfrgy/nao
http://www.linkedin.com/companies/cemex
http://www.cemex.com/

http://www.crh.ie/en/our-divisions.aspx

Appendix:

5 forces industry analysis:

1.Threat of established rivals:

10
 The degree of rivalry determines the industry attractiveness
.the attractiveness is most likely to be high in those industries
where the threat of substitutes are present as crh has
fragmented market , there are large number of buyers and
suppliers. So , they compete mainly on the basis of price
.moreover , building materials and products are largely
commodities with little differences between suppliers.

Building materials and products are of similar standards and

largely stable. so, the threat of rivals are not high in this
industry.

CRH celebrated 36 years of unrivalled growth and

performance since the formation of group in 1970.

After the interruption of EU , there were new rules and

regulations, customers base was starting uniting and
customers need were also homogenizing but still in this
industry market fragmentation was present. So , CRH did not
face so much threat of rivals.

2.Threat of new entrants:

Both potential; and existing competitors influence average
industry profitability. the threat of new entrants is usually
based on market entry barriers .they can take diverse form
and prevent an influx of firms into an industry. when entry
barrier exists it is difficult for an outsider to replicate the
competitor’s position.

Economies of scale:
In this industry production is often linked to the location of
reserves. in CRH due to the high transportation cost it will
charge high price as a result economies of scale is
outweighted. Which determines the radius of economic
activity become half.

Cost of entry:
Cost of entry is determined by how much an organization is
paying to enter in an industry.as in building material industry
the market is fragmented and because of undifferentiated
product the competitive rivalry is low. Most importantly, here
technology is not protected by any kind of trade mark,
patent.so, the cost of entry is low as aresult any firm can enter
in to this building material industry.

11
 Cost advantages:
Is not related to the size of firm but on the context of it’s
industry.so, in building material industry any other firm can
enter. CRH should lower the threat of entrants by reducing
price, achieving cheaper inputs ,use of efficient process,
better technology and experienced professionals. most
importantly CRH can reduce cost advantages through
acquisition.

Differentiation;
:
When there is a differentiation in a market an organization is
dealing with certain brand which can’t be adopted by
competitors. as CRH’s products standard are most similar
and not differentiated so the threat of new entrants are
high.CRH should focus on differentiation to lower the threat
of entrants and remain competitive.

Government regulations.
If there are so many restrictions rules and regulation imposed
by government then it will weaken CRH’s competitive
position.

3.Threat of substitutes:

CRH products are commodities and are

undifferentiated. Switching cost is low so customers
can easily shift towards the substitute product.
All competitors are offering homogeneous
products; products are similar across the market. So
that’s why threat of substitute products and services
for CRH is high.

Factors influencing threat of substitute product:

Substitutes are a greater threat when:

Your product doesn’t provide any real benefit
compared to others product.
It is easy for customers to switch

12
 Customer is little loyal. When price is
customer's primary motivator , the threat of
substitutes is greater.
Threat of substitute for CRH is high as all
these factors are according to CRH situation.

4.Bargaining power of customers:

Bargaining power are relatively high when there are few but
larger player in market and when the cost of switching
between suppliers are low .as I have stated above CRH has
fragmented market so there are no dominant buyer and
suppliers and substitutes are available, customers are
fragmanted.as a result, bargaining power of buyers are low.

5.Bargaining power of suppliers:

It is a mirror image of buying power. Analysis of supplier

power is focus on relative size and concentration of supplier
relative to industry participants and on the degree of
differentiation in inputs and supply. Supplier of inputs may
be able to charge prices that extract profit from their
customers
ý CRH market is fragmented there are large
number of suppliers rather than a dominant one. All
the firms are offering homogeneous products as
products are available to a large number of suppliers
so bargaining power of supplier is low.
As there is large number of suppliers and if one supplier is
charging high then firm can move to other suppliers and can
negotiate for a favorable business deal. So supplier power is
low.

Swot analysis:

Strength;
:STRENGTH

• CRH plc enjoyed 36 years of

unrivalled growth and performance which is
its major strength.
• During the period of 1970 to 2006,
CRH had metamorphosed from a local player

13
 to one of the top five building material
companies in the world with global operation
and market capitalization of 16.6bn at the end
of 2006.
• Another strength of CRH is that even
in notoriously hostile industry environment it
achieved a great success.

• Production of CRH is linked to

location of reserves of varying value which
lead to a proliferation of facilities and lower
barrier to entry.
• CRH received awards over the years
due to good financial reporting, investor's
relations and excellence in environment and
safety practices which is also one of its
strength.
• two characteristics of CRH
product/service portfolio is leadership and
deliberate geographic balance of product and
segments which smoothen the effects of
varying economic conditions and provided
greater opportunities for growth.
• US operations which stood out in CRH
portfolio resulted above than average returns
and remarkable low volatility.
• CRH adopted a rigorous approach to
project evaluation, approval and review.
• CRH established a stretched target for
operational and financial output measure.
• CRH used to measure performance
formerly and on time which allowed early
critical review of underperformance to identify
reasons and made corrective measures and
enable senior management to draw broader
lessons.
• Another strength is that it continuously
work on improvement and reengineering its
products and services to get a high returns or
profit through greater efficiencies.
• As a result of continuous growth and
relentless stream of acquisition, pools of
managers had increased to 350.
• CRH used to hire operating managers,
experienced finance and development
professionals, owner entrepreneurs from

14
 acquired companies to develop a healthy mix
and depth of skills.
• The most strengthen characteristics of
CRH management is experience, stability and
continuity.
• CRH adopted market driven;
performance related remuneration policy
aimed at creating shareholder values, formal
and informal mechanisms which resulted
continuous success, low turnovers/rotations
and promotion of employees.
• CRH had a strong and consistent track
record of financial performance.
• 2006 represented the 23rd consecutive
year of increase in dividend, CRH had
experienced only two relatively short periods
of declining earning per share.
• CRH's level and consistency of
performance was also superior to its peers
internationally.
• The characteristics of CRH finance
function is extensive business knowledge and
operational contribution, diligence
conservatism and prudence. Due to these CRH
achieves prominence in financial markets.
• Cash earning were two-thirds higher
than reported EPS, this is a major factor which
enabled CRH to fund its acquisition-led
expansion overseas without compromising its
financial principles.
• CRH strategy was reinforced by
rigorous measurement, evaluation and control
processes and by value added business
contribution and advice of finance function; it
ensured early intervention and appropriate
corrective actions.
• CRH operated a group wide
management development system to develop
the critical experience base of managers, when
they are 20s and 30s.
• CRH achieved excellence in external
and internal relations.
• The culture of CRH is its key strength.
• CRH continuously reinforced its core
values in formal statements of strategy not
only internal but external communication and
through corporate folklore.

15
 • CRH acquisitions were add on in
nature.
• CRH strategy of acquisition was
singular in conception and execution and had
proven very difficult to replicate.
• CRH adopted a post acquisition
approach resulted high returns.
• CRH’s strategic position was clear,
durable and long lasting.
• CRH had internal audit to assure that it
add value to improve an organization’s
operations.

Weakness:
• Cross subsidization of CRH was not tackled more
attentively.

• CRH did expansion but only on selected areas i-e

which they were already manufacturing.
• finace function of CRH was conservative.

• Technology is non proprietory ,it is not protected by

copyrights ,patents trade mark.
• High transportation cost results outwieghted
economies of scale.

Threats:
• CRH’s view was that all kinds of operations were
required to earn 15%return on net assest. although
operation were not able to achieve that 15% target
and if they will not achieve then the company will
face losses.

Opportunities:
• CRH can invest or having an opportunity of
ongoing development corportaed new plants,
capacity extensions and major upgrades.
• balance between different geographic segments
provides an opportunity of emerging into different
regions.

Pest analysis:
Economic factors
1.one of the characteristics of building material industry is
construction is a mature sector in the western world which

16
 reflects stable economic activity and populations. average
growth is less than half of the rate of economic growth.

2 .the segment balance of CRH different geographic had

smoothen the effects of varying economic conditions and
provided greater opportunities for growth.

3. during 1976-2006, CRH has metamorphosed from a local

player supplying the small peripheral Irish construction
market to one of the top 5 building material company in the
world with global operation and market. of 16.6 bn.

4. buliding material industry have high weight to value the

ratio which resulted high transportation cost.

5. since 1990’s a number of international building material

indusries emerge so local differences between geographic
markets were eroding. driven by institutional factors a
harmonizations of building regulations. product standards,
tendering procedures occurred.

6.CRH business cycle are larger in duration and larger in

amplitude than economic cycles.

Political factors:
1.irish operation under the CRH portfolio had a low rate of
manufacturing corporation tax(12.5)%

2.due to often change in position of managers corruption

became low, as job description were flexible.

Technological factors:
1.CRH’s bulding materials and products are standard ,similar
and stab le overtime. production processes are also standard
through the use of technology.

2.CRH was utilizing communication technologies e.g- the use

of e-mail, bulletin boards, internal news magazine etc.
3.at division level, technical advisors used to facilitate betz
practice activities by small teams of experts at local, regional
and international levels.

Socio cultural factors:

1.since the mid 1990’s the indusry’s customer base was
consolidating , customer’s needs were homogenizing and
they were becoming more demanding.

17
 2.CRH received awards over the years for innovation in
environmental practices.

3.CRH used to acquire different professionals from different

regions.

4. due to use of technical advisors CRH starts reducing costs

and offered better quality and services to their
customer.There is also possibility of supplier integration in
order to obtain higher prices and margins as it has done
through acquisition.
BOSTON CONSULTING GROUP (BCG) is developed by
BRUCE HENDERSON of the Boston consulting group in th
.early 1970's
According to this technique, businesses or products are
classified as low or high performers depending upon their
.market growth rate and relative market share
It is a portfolio planning model which is based on observation
or assumption that company's business units can be classified
:into four categories
(Star (high growth, high market share
(Question mark (high growth, low market share
(Cash cow (low growth, high market share
Dog (low
growth, low market share

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 STARS QUESTION MARKS

U.S asphalt
U.S Concrete products
Construction
(accessories(Europe
(Fencing and security(Europe U.S aggregates
(Clay products(Europe U.S Interior products distribution
U.S Architectural glass
fabrication
U.S Precast concrete products
(Cement(Europe
Agricultural & chemical
(lime(Europe

CASH COWS DOGS

America ready mix concrete

HIGH

19
 Relative market growth

LOW

RELATIVE MARKET SHARE

HIGH LOW
:CONCLUSION
Though BCG matrix has its limitations it is one of the
most famous and simple portfolio planning matrixes used
by large organizations having multi products. It helps to
screen the available opportunities and helps company to
think how it can make most of them. It is also used to
identify that corporate cash cow can be best used to
.maximize the company's future growth and profitability
STAR: U.S asphalts, construction accessories in Europe,
fencing & security in Europe, U.S concrete, clay product, U.S
glass architectural fabrication, U.S precast concrete product,
cement in Europe, agriculture & chemical lime in Europe are
star having a high relative market share or relative market
.growth and enjoying a number 1 position in an industry
QUESTION MARK: U.S aggregates and U.S interior
products distribution are question mark having a low relative
market share and high relative market growth. They are
enjoying number 3 or 4 position in an industry. In order to
convert question mark into star, there is a need to change the
:variable of marketing mix

• The product attributes should be

change to provide more value to the customers
(by improving product quality).

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 • Price should be decrease which would
increase the sales revenue.
• Add new distribution channels and
increase the intensity of distribution in each
channel.
• Increase advertising expenditure would
increase market share unless competitor
respond with similar increases.

This would increase its relative market share and convert

them into star.

CASH COW: ready mix concrete (America) are cash cow

having a high relative market share and low relative market
growth. It is enjoying number 6 position in an industry. To
convert cash cow into star there is a need to reduce the price
so that customers can buy more and by providing them a
special offers and sending them monthly newsletter and
telemarketing them and let them know that they got a gift
waiting for them when they call back. This would increase
.market growth and ultimately convert product into star

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