Business enviornment: Cement Roadstone Holdings (Coursework Sample)

BUSINESS ENVIRONMENT
Executive summary
This report depicts the importance of Pestle analysis in an organisation. It shows the different aspects of pestle analysis and how it assists business professionals in formulating strategies and policies for maximising profits. The analysis is also used to fulfil the corporate objectives. The analysis importance of new business is entailed in this report. Pestle analysis of CRH Plc is done in detail explain different examples and developing the same. It is important for a business like CRH Plc, which has an international presence to implement pestle analysis before making any decision and strategy. Overall, this report gives a clear understanding of pestle analysis and its importance.
Table of Contents
TOC \h \u \z Introduction PAGEREF _Toc34665915 \h 4History of Cement Roadstone Holdings PAGEREF _Toc34665916 \h 4Overview history and structure on CRH PAGEREF _Toc34665917 \h 4Overview of the company PAGEREF _Toc34665918 \h 4Structure PAGEREF _Toc34665919 \h 5Corporate Governance PAGEREF _Toc34665920 \h 6Relationship between the Board of Directors and Stakeholders PAGEREF _Toc34665921 \h 6TASK 2 PAGEREF _Toc34665922 \h 7Importance of PESTEL analysis for a business organisation PAGEREF _Toc34665923 \h 7Task 3 PAGEREF _Toc34665924 \h 93.1 Explaining factors in the context of some examples PAGEREF _Toc34665925 \h 93.2 Impact of one example on the factors PAGEREF _Toc34665926 \h 12Conclusion PAGEREF _Toc34665927 \h 13References PAGEREF _Toc34665928 \h 14
Introduction
Businesses mainly use Pestle analysis for making strategic decisions and a tool for management. It allows experts to analyse each factor separately, which can impact business operations. The organisation selected is CRH Plc, and it operates in an environment which is highly dynamic and goes through continuous changes.
History of Cement Roadstone Holdings
Cement Roadstone Holdings is a well-known Irish company that started with the production of asphalt, cement, concrete products and aggregates. Since it was founded, CRH grew to be a large multinational company that supplies a wide range of building materials throughout the world.
Overview history and structure on CRH
The origins of Concrete Roadstone Holdings start in the early 1930s when Roche brothers, Tom and Donal started a small sand and gravel haulage business in west Dublin, called Roche Brothers.
CRH is now a leading global building material business founded by the merger of two leading Irish public companies in 1970, Cement Limited who was established in 1936, and Roadstone Limited who was established in 1949. They supply a wide range of superior building materials and products used for commercial projects, maintenance of infrastructure and housing.
In 1973, CRH entered the European Economic Community expanding onto mainland Europe and in 1978 CRH, crossed the Atlantic with the acquisition of Amcor.
Overview of the company
In 2015, CRH entered the top three in building materials globally by acquiring Lafarge- Holcim's global portfolio of assets for an enterprise value of 6.5 billion euro which doubled CRH'S cement volume and expanded the group's aggregates, ready mixed concrete and cement portfolio and by 2018, CRH was ranked 396 in Fortune 500.
CRH focuses on three core businesses are:
Primary materials such as:
* cement, aggregates and ready –mixed concrete
Building products such as:
* Architectural products including pavers, retaining walls and related patio products.
* Glass and Glazing Systems, including storefront and glazing systems and architectural glass.
* Infrastructure products including drainage structure and pipes and underground vaults
* Network Access Products including meter boxes, passive safety systems and composite access chambers.
Building materials distribution is through DIY stores, builders’ merchants and specialist distribution.
CRH objectives in 2018 were focused on growth by spending 3.6 billion on acquisitions, including the purchase on Ash Grove Cement making them leaders in the North America cement market and maximising value for shareholders by adding 45 bolt-on transactions. They also focused on developing leaders and continuous improvement by installing a production monitoring system at its plants by the Architectural Products Group, which provided accurate daily reports.
CRH was North America’s number one company in building materials in 2018 with sales of 13, 4 billion, a 9% growth since 2017 and in Europe CRH was placed on number one in Heavy side materials with sales of 13 billion and a growth of 4%.In Asia, they recorded a decline of 1%.
Structure
“Organisational structure is the framework of the relations on jobs, systems, operating process, people and groups making efforts to achieve the goals. The Organisational structure is a set of methods dividing the task to determined duties and coordinates them.” (Minterzberg, 1972)
The company is governed by a board of directors; therefore, it has a hierarchical structure.
A hierarchical structure is formed of three management layers:
* top management–The overall company performance reflects with their actions and decisions
* Middle Management –their responsibility is to communicate the top managements visions to lower management
* First level Management - They are the minds behind resource utilisation and implementation of technology, ideas, and plans.
Hierarchical structure creates communication barriers, a lot of bureaucracy that needs to be managed, and it can reduce internal innovation. The advantages are that it creates a defined communication structure, and it offers more levels of authority within the company.
CRH is managed internationally, employing 90.000 people across 3700 locations worldwide.
Corporate Governance
CRH is governed by a board of directors; therefore, it has a hierarchical structure.
"Corporate Governance is to conduct the business in accordance with owners or shareholders' desires while conforming to the basic rules of society embodied in law and local customs” (Friedman, 2001).
CRH's board of directors is formed of ten directors; two executive directors and eight non-executive directors.
Richie Boucher was appointed in March 2018 and became Chairman on 1st January 2020.
Appointed to the board on January 2009, Albert Manifold became the group's Chief Executive with effect from 1st January 2014.
Relationship between the Board of Directors and Stakeholders
* Employees–they have diverse leadership development programs such as coaching, global mobility assignments that are available on all levels of the organisation. They also offer a life insurance, medical insurance and have an employee assistance program.
* Shareholders–they are the largest heavy side material company in Europe and the largest building materials in North America with a long-term growth strategy. They are relentless in improving their business worldwide and offer a superior return to shareholders by being transparent all the way through.
* Customers –CRH offers a customer self-service portal that enables customers that provides a 24/7 up to date information about invoices, credit status, orders and more in a secured way. They help customers by creating a qualified list of potential suppliers, monitoring their activity, and they track their competitions exports and imports.
TASK 2
Importance of PESTEL analysis for a business organisation
The PEST analysis is a useful tool for understanding market growth or decline, and as such, the position, potential and direction for a business. (Gupta, 2013)
The importance of carrying out a PESTEL analysis for a business organisation can be for the following reasons:
* It outlines the opportunities and threats, raising awareness of existing and future competitors. For example, an opportunity is learning that a certain city will have a population growth of 15%between the ages of 55 and 65.
* Achieving a set of goals through strategic planning. PESTEL in strategic planning helps companies to enter new markets and expand nationally or internationally by understanding the economy and assessing the business environment, allowing them to make strategic decisions.
* The pestle analysis helps the startup or operating business in identifying the different impacts which business will face while operating in the industry. The analysis also makes it easy for the business to understand the complications and the legal requirements, which can probably affect the business process.
* Pestle analysis allows the expert to gather information for comparing them with other factors. This information ultimately helps experts in formulating effective strategies. It facilitates the process of analysing solutions and combating threats. It further enables the company to achieve predetermined goals. 
* Pestle analysis assists the expert in identifying significant changes in the social, economic, technological and political landscapes. The analysis allows the experts to breakdown the critical influences of each factor for better understanding. 
* Pestle analysis helps experts in making the business cost-effective (Boddy, 2016). The only effort that is required for boosting the business is the execution of pestle analysis in a proper way. There is a specific program which facilitates the ...