1. CEMEX is a cement company. What are the sources of competitive advantage in the cement industry? What is CEMEX's position in the global cement industry?
First, the cement business is cyclical. The uncertainty of the number of demand and sales restricts a cement company to gain profits stably. Thus, the expansion of the scale of the company is very critical to enhance the competitiveness, especially the international expansion to different countries and continents. Decentralized production and sales in a wide range of countries can offset the risk of shocks in some markets. On the cost side, as a capital intensive and cash generative industry, cement industry needs large scale to build up supplier’s bargaining power to reduce the costs. Overall, the scale of company and the expansion overseas are the critical sources of competitive advantage in the cement industry.
Founded in Mexico in 1906, CEMEX has grown from a small regional company to a leading producer and marketer of cement. It not only dominates the domestic market, but also operates cement and related products in more than 30 countries, especially in many emerging markets. In addition, it is the largest trader of cement in the world. At last, it is one of the world’s leading investors in IT industry.
2. Consider the period prior to 1997 in the case. What are the main IT -related changes that
Cemex has made? What are the primary capabilities that these changes have given to Cemex?
Where do these capabilities influence Cemex's performance?
First, in 1987, Gelacio Iniguez was hired to develop CEMEX’s information technology. He and executives made a three-year IT development plan. In 1988, CEMEX adopted a satellite telecommunications system, which was a creative move for the cement company. After that, in
1989, CEMEX merged Tolteca’s HP platform with its own platform. CEMEX reviewed its platform after the acquisition.
Second, in 1990, an