Globalization of Cemex

Case Analysis: Globalization of CEMEX      

   Questions:

1. What benefits have CEMEX and the other global competitors in cement derived from globalization?

First, globalization expand their business and increase their size of their business. Some newly developing countries have great demand potential in cement area. And successful globalization will bring huge market revenue and profit to CEMEX and the other competitors. Second, firms can make profit in price and cost difference among their expanded countries. They can produce cement in low cost countries and import them to the high price market countries. And the successful globalization also bring high profitability rate for the big 6 leader cement firms comparing to the follower firms.

1. How specifically has CEMEX managed to outperform its leading global competitors in the cement industry?

CEMEX has advantage in their PMI process. CEMEX can move much more quickly than their main globalization competitor. They have a complete PMI process and emphasis on it. Because they think the PMI is one of the most important thing to increase their profit and lower the cost. And CEMEX also have good organization arrangements. The country-level managers could report directly to the regional director. And they have more frequent meeting to discuss the strategy together. Finally, CEMEX have advantage in the information technology area. CEMEX invest more in the information technology part for their business than their main competitors. That makes them respond more in the current society.

1. What are the logics/reasons CEMEX probably relied on when entering these foreign markets? How do the markets it has entered recently compare with the markets that it entered early on?

There are several factors. First, whether the foreign country have great population and high population growth rate or not? Second, the consumption level must be low. And Whether CEMEX have the chance to be the market leader or not-at least over 25%. CEMEX will also consider the market’s culture and political background as the reason for their entering. The newly entered market, mostly are the developing countries, such as Filipino. CEMEX follow the high population and low consumption method. And they can also be the leading company. For the early one, such as Spanish and US. They are not follow the strategy and just aim on the big size market.