Cemex Case Study

Satisfactory Essays
Pontificia Universidad Católica de Chile
Escuela de Adminstración
Leadership and Business Strategy I
EAA 305 a – Section 2
Profesor: Matko Koljatic
Written assignment: CEMEX
CEMEX business model will be defined with WHO-WHAT-HOW. WHO: CEMEX concentrates on customers in developing countries and emerging markets. WHAT: They sell cement directly in the country or through imports. HOW: CEMEX follows a well structured and planned geographical diversification in emerging markets with control, low hierarchy and the experience of lesson learnt from other penetrations of a market.
With their business model CEMEX pursues a low cost strategy. The following data will show a competitive advantage for CEMEX:
Table1 Calculated selected indexes on the basis of Exhibit 4 | CEMEX | HOLDERBANK | LAFARGE | (A)EBITDA / ton cement | 46 | 26 | 38 | (B)CAPEX / ton cement | 7 | 11 | 18 | (C)Free Cash Flow / ton cement | 22 | 8 | 8 | (D)TEV adjusted / ton cement | 172 | 160 | 130 | (A) shows a cost advantage to CEMEX due to a good global positioning satellites systems which decreases the costs for fuel, maintenance and payroll. Furthermore, CEMEX has a competitive advantage through its low hierarchy and their high standardized reports.
This can be seen as a differentiation strategy as well, caused by better service for the customers and the increasing willingness to pay of the customer. (B) CEMEX did not invest high capital on their existing plants. They focused on a quick increasing efficiency in the plants. (C) This ensures them a high Free Cash Flow to react flexible on macro economical developments in emerging markets. (D) The TEV includes the total enterprise value and is coupled with the stock price. Therefore, it includes all existing information on the market.
There are different resources and capabilities that allow CEMEX to build this competitive advantage. CEMEX developed a system to identify the opportunity of entering a market/country

You May Also Find These Documents Helpful

  • Better Essays

    Cemex Case Study

    • 1409 Words
    • 6 Pages

    Running head: Cemex’s Foreign Direct Investment Cemex Foreign Direct Investment Jeff Panian Davenport University Abstract Cemex is one of the fastest growing cement manufacturers in the world. Starting out more than a decade ago Cemex, “has transformed itself from a primarily Mexican operation into the third-largest cement company in the world” (Hill, 2008). The success of Cemex has been attributed to its skills in customer service, marketing, information technology…

    • 1409 Words
    • 6 Pages
    Better Essays
  • Powerful Essays

    Cemex Case Study

    • 2720 Words
    • 11 Pages

    What benefits have CEMEX and the 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? - Reduction of tariffs associated with exporting - Due to internationalization these companies have been able to spread their risk. Therefore, if one market is not performing they can rely on the other (diversification) - Talent across markets - Ability to identify new emerging markets and having…

    • 2720 Words
    • 11 Pages
    Powerful Essays
  • Powerful Essays

    Cemex Case

    • 1211 Words
    • 5 Pages

    Cemex Key points summary | |Cemex was originally founded in 1906 as Cementos Hidalgo and became Cemex (Cementos Mexicanos) after a merger | |Case Summary |with Cementos Portland Monterrey in 1931. Throughout the 1960’s, 70’s, and 80’s, Cemex expanded throughout | | |Mexico to gain a 65% share of the domestic market by the end of the 1980’s. Under the leadership of CEO Lorenzo | |…

    • 1211 Words
    • 5 Pages
    Powerful Essays
  • Good Essays

    case of CEMEX

    • 893 Words
    • 4 Pages

    1. What benefits have CEMEX and the other global competitors in cement derived from globalization? Globalization has given many benefits to CEMEX and its competitors. First of all, it reduced the tariffs of product exportation by acquiring local plants and facilities instead. By doing so, these cement companies could control the localized quarries, which give them the proximity to the raw material needed for cement production. No need to ship the goods across the border, therefore no tariffs on…

    • 893 Words
    • 4 Pages
    Good Essays
  • Good Essays

    Cemex Case Study Research

    • 1135 Words
    • 5 Pages

    Introduction: CEMEX which is one of the largest cement producers in the world was founded in 1906 by Lorenzo Zambrano Gutierrez near Monterrey in Northern Mexico. It was initially named as Cementos Hidalgo. CEMEX remained a domestic company till 1960. During this period it acquired company called Cementos Portland Monterrey and merged with Cementos Mexicanos. In 1982 when the economic crisis hit Mexico, the government was forced to liberalize its economy which allowed CEMEX to attract foreign investment…

    • 1135 Words
    • 5 Pages
    Good Essays
  • Powerful Essays

    CEMEX case

    • 995 Words
    • 4 Pages

    CEMEX What benefits have CEMEX and the 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? There have been several benefits for CEMEX and its global competitors derived from globalization: (strategic group, part of the big six competitiors) International trade offered opportunities to arbitrage price differentials. Import from low cost countries and sell to 3rd parties to…

    • 995 Words
    • 4 Pages
    Powerful Essays
  • Satisfactory Essays

    Cemex Case

    • 259 Words
    • 2 Pages

    recommendations would you make to CEMEX regarding its globalization strategy going forward? In particular, on what kind of countries should it focus its future expansion? CEMEX expansion is a process where the company performs its due diligence and the aim of expanding into a country with a large population and high population growth. As the text stated CEMEX should continue to focus on developing Asian economies, Central America, the Caribbean and Sub-Saharan Africa. CEMEX should keep its eye on China…

    • 259 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    Cemex Case Study Analysis

    • 1095 Words
    • 5 Pages

    Strategies EXTERNAL ANALYSIS PESTEL ANALYSIS Political factors: -restriction and regulation of imports, exports and trade tariffs decide whether a company can compete globally: eg. GATT agreement in 1989, Mexico-open marketplace, enabled Cemex to expand globally. - governments may decide to nationalize or privatize the cement production; eg. Venezuela nationalized cement production. - political stability of a country will highly affect the performance of the industry Economic factors…

    • 1095 Words
    • 5 Pages
    Good Essays
  • Powerful Essays

    cemex csr study

    • 1724 Words
    • 7 Pages

    Corporate Social Responsibility: A closer look at the social performance of CEMEX The relationship between natural environment and industries has often been named ‘dysfunctional’. An increase in the levels of awareness of the society towards activities of companies, both positive and negative, has pushed corporations to address to their corporate social responsibilities. Industrial Pollution has been a concern for the society. The effects of companies’ actions on the environment are constantly…

    • 1724 Words
    • 7 Pages
    Powerful Essays
  • Powerful Essays

    Cemex

    • 1022 Words
    • 5 Pages

    Information Technology Management CEMEX : GLOBAL GROWTH THROUGH SUPERIOR INFORMATION CAPABILITIES Team No. 8 : Q1) How do you describe IT impact Map for CEMEX? 1)Picture 1. The impact of IT on Strategy and Operations ▪ Description Goals Support Local Improvements Core Business Improvement Activities - Building and acquiring plants. - Diversifying business into mining, hotels and petrochemical. - Developing information technology. - Investing in a satellite telecommunication…

    • 1022 Words
    • 5 Pages
    Powerful Essays