Cemex, the Mexico's global giant, has been famous worldwide for its high quality products and reliable services in cement industry. It is the third biggest company that operates in US, Europe, Africa, the Middle East and Asia. The company produces and distributes cement, ready-mix concrete, aggregates and related building materials in more than 50 countries and maintains trade relationships with more than 100 nations. Cemex was founded in Mexico in 1906 but its worldwide presence has begun since 2009. No wonder that any company that wants to penetrate to foreign markets has face up with various issues and needs to find a reasonable solution to them. A vivid example is the Cemex Company that wanted to go global and needed an attractive performance program for penetration of other markets. The company was specialized in production, distribution and marketing of cement and related products. Its strategy had mainly consisted on three main milestones: first, expanding and consolidating its place as cement producer leader inside Mexico; then, had a presence in international markets; and finally, had a truly global management.
The analysis of the following case study puts its aim in analyzing the key points of cement industry and the problems that Cemex came up during its globalization. Moreover it will try to analyze the strengths and competencies of the company, the level of competition in the given field worldwide, the strategy of market penetration and in which kind of environment it had to operate (political, economical, legal, etc.) and what kind of problems it had to cope with. The core purpose of the analysis is to see the key components that played a crucial role for Cemex Company in going global and to see if the company's strategy meets its goals.
EXECUTIVE SUMMARY OF CEMEX PATH
Cemex first appeared as Cementos Hidalgo in 1906 near Monterrey in Northern Mexico. After its merge with Cementos Portland Monterrey in 1931, it became Cementos Mexicanos. A few years later, the company’s name took its final form as Cemex. Cemex started as a small domain company and gradually through the years developed to be one of Mexico’s global giants. A multinational enterprise, which for quite some time, ruled some of the largest cement markets globally. The strategy of Cemex was based on three factors: 1. Focus on the core cement and ready mix concrete franchise in the international market they serve; 2. Primarily concentrate on the world’s most dynamic markets; 3. Maintain high growth by applying free cash flow towards selective investments that enhance their geographic diversity. Cement had a slow but steady course towards globalization taking one step at a time. Initially, apart from the USA market, which contrary to what was expected did not produce the desired outcome, acquired Cementos firms in Mexico establishing itself as the king of cement in Mexico and building strong foundations for further expansion. In 1922, Cemex moved to Spain; a country with a flourishing market for global players. But also a country with a very similar culture to that of Mexico. They went on to Latin America by adding Columbia, and the Dominican Republic to the list, which later came to include Asia, Egypt, Indonesia, the Philippines and many more; as well as Europe with France and America with the USA. In each one of these bargains Cemex acquired at least 25% of its current market which automatically entitled it to play an important role in the management of the market and limited the power of competitors. Cemex had become a huge global player. One of the many factors for the successful path of Cemex was the combination of innovative technology and four key objectives to the Cemex way:
Generating cost savings.
Simplifying business processes.
Minimizing the time to integrate a new company.
Standardizing information processes.
Main examples of the technological advancements are:
A large private...