What benefits have CEMEX and
other global competitors in cement derived from globalization? More broadly,
how can cross-border activities add value in an industry as apparently
localized as cement?
companies have reaped the benefits of globalization in may ways, one of which
includes making manufacturing and transportation more ‘local.’ Having a localized system of manufacturing
has made it so companies can avoid paying taxes (export taxes to be exact) when
the cement needs to be delivered. In
class we discussed the shipping methods of cement as it can be quite tricky
with how quickly it cures, and how expensive it can get. This expense can cost the company great deals
of money if transportation distances are great, but if they are more local, it
would take less time and money to get to the customer.
2. How specifically has CEMEX managed to outperform its leading
global competitors in the cement industry? Please focus on comparing it with
Holderbank, which is the other large competitor principally focused on cement.
What do this comparison and the other data in Exhibits 4-8 suggest about the
competitive game being played out among the major international competitors.
main difference when it comes to the success of CEMEX and Holderbank is that
they had differing definitions of innovation.
In class, it was stated that innovation is essentially brining new ideas
and modifications to the market, and not just a specific industry. Other companies only were able to offer new
things to certain people; some of their ideas may have already been present to
the rest of the world without their knowledge.
Previously, we learned about how being a first mover could benefit a company
because it allows them to have control over resources by moving before their
competition. The CEO was able to collaborate
with other companies that were able to develop CEMEX hardware and
software. Due to how well this agreement
went with bot of the companies, the technology portion was able to spin off and
offer its services to many other firms.
The initial buy-in that CEMEX had with this company was able to
efficiently have control over their operations.
What accounts for the sequence
in which CEMEX entered foreign markets? How do the markets it has entered
recently compare with the markets that it entered early on?
looks at how attractive a foreign market is, and how possible it is to buy or
sell within the market. Looking at
Exhibit 12, it seems that there is a pattern where the growth percentage is
significantly higher in the markets that CEMEX looks to enter into. They also look to expand to places that have
potential to have a high growth in population, as well as a larger existing
population. The strategy to which CEMEX
used subsequent to acquisition is to enter the market enough to the point that
it can be used to expand further into the market or region.
What recommendations would you
make to CEMEX regarding its globalization strategy going forward? In
particular, what kinds of countries should it focus its future expansion on
should look into moving into countries such as India, where the potential for
growth along with the emerging population offers a large playing field to work
with. I believe that CEMEX should
continue with their expansion into Asia, and even China even though they have
faced some barriers of entry; lots of things can change for China as it is such
a large economy with a changing political climate. CEMEX should look into countries that have a
growing population such as Latin American markets as well as Brazils market due
to the fact that language barriers may not be as much of an issue since they
already speak Spanish. I also found it
interesting that CEMEX hasn’t found its way into parts of Europe, which I think
could possible increase their revenues due to the fact that Europe has many
emerging markets with large, compact economies that could be capitalized