SWOT Analysis of Cemex
Carol Dixon
International Marketing Management – BK535-BK50HY
Prof/Dr. Min H. Lu
June 1, 2014
CEMEX - SWOT Analysis
Global integration for the cement industry only began in the 1970’s, although the industry scores high on most of the factors that should have pushed it to globalization much earlier. These factors include large investment intensity, technology intensity in production, pressures for cost reduction, universal needs, presence of multinational competitors, and access to localized resources. However, upon further review the most apparent reason for the delay in globalization was the inherent characteristic of its principal product, namely low-value-to-weight ratio of cement.
The cement industry generally does not have high pressures for localizing their product; these pressures are medium at the most. Even though there can be noticeable differences in consumer demands from developed and emerging markets, these differences are not affecting significantly, the product’s characteristics and the manufacturing process. However, as was demonstrated by the CEMEX experience, the production processes in general are highly standardized and could be efficiently transferred among multiple plants within the company.
Of the three globalization strategies, Adaptation, Aggregation, and Arbitration, CEMEX has clearly achieved its success by focusing on Aggregation and effectively managing Adaptation. However, the aggregation strategy employed by CEMEX had a significant twist; the economies of scale were achieved by efficient management of its global knowledge base as opposed to simply centralizing its production and development processes.
The cornerstone of the CEMEX Way corporate philosophy is the transfer and standardization of best practices throughout the company. The remarkable distinction of the company’s approach is that this knowledge is built upon as the company increases its knowledge base through acquisitions. The company executives are able to
International Marketing Management – BK535-BK50HY
Prof/Dr. Min H. Lu
June 1, 2014
CEMEX - SWOT Analysis
Global integration for the cement industry only began in the 1970’s, although the industry scores high on most of the factors that should have pushed it to globalization much earlier. These factors include large investment intensity, technology intensity in production, pressures for cost reduction, universal needs, presence of multinational competitors, and access to localized resources. However, upon further review the most apparent reason for the delay in globalization was the inherent characteristic of its principal product, namely low-value-to-weight ratio of cement.
The cement industry generally does not have high pressures for localizing their product; these pressures are medium at the most. Even though there can be noticeable differences in consumer demands from developed and emerging markets, these differences are not affecting significantly, the product’s characteristics and the manufacturing process. However, as was demonstrated by the CEMEX experience, the production processes in general are highly standardized and could be efficiently transferred among multiple plants within the company.
Of the three globalization strategies, Adaptation, Aggregation, and Arbitration, CEMEX has clearly achieved its success by focusing on Aggregation and effectively managing Adaptation. However, the aggregation strategy employed by CEMEX had a significant twist; the economies of scale were achieved by efficient management of its global knowledge base as opposed to simply centralizing its production and development processes.
The cornerstone of the CEMEX Way corporate philosophy is the transfer and standardization of best practices throughout the company. The remarkable distinction of the company’s approach is that this knowledge is built upon as the company increases its knowledge base through acquisitions. The company executives are able to