Zambranos successor as CEO, Fernando A. Gonzalez, was previously the firms executive vice president of finance and administration, and its CFO. Headquartered in Monterrey, Mexico, CEMEX is a global leader in the building materials industry. Leveraging our expertise, we strive to foster transformational change and contribute directly to our company's purpose of building a better future through sustainable initiatives. "Cemex Company's Strategic Analysis." It is not just a license to operate in countries where regulations are becoming stricter, or just a way to reduce cost. Cemex: making global markets (Chapter 8) - Global Competitive Strategy Tomorrow were going to start using cash value added as a measure of performance, and if you achieve this level of cash value added, you get this bonus, and that will set you up to be promoted.. Apples social media strategy is extremely unusual. Due to declining expansion in China and low oil prices, the construction industry has experienced stagnation in 2015. The role of an acquisitions leader included incorporating those practices back into the CEMEX Way. Limitations of SWOT Analysis for CEMEX, S.A.B. Huge market expansions also come with an increase in administration costs which dilutes the profit margins of the firm by increasing the operation cost. Then we started buying up cement companies throughout Mexico. Sustainability - Corporate Website - Cemex Especially when youre shifting to a distributed organization, and asking people to make decisions material ones that they havent been asked to make before, it can take a while to get that right. We changed old habits; for instance, in the past our people were not prepared to interact with our communities or with the media. This forced the company to develop its distribution channels to optimize revenue at a minimum cost rate. How does Vinted make money by selling Pre-Owned clothes? Part of this stemmed from legal barriers that broke down, paving the way for international competition. High: Cemex has established a very comprehensive supply chain that is proving to be quite efficient in supply. CEMEX participated in the 2006 restoration of Centennial Hall in Wroclaw, Poland. How? << /Length 5 0 R /Filter /FlateDecode >> In addition, using refuse-derived fuel is pretty complicated technically because of variations in calorific power and other factors. The IT group has played a huge role in integrating the best management practices with the organizational framework across the globe. In the 2000s, to take full advantage of its emerging global nature, CEMEX entered new businesses in ready-mix concrete and aggregates materials whose supply chain and financial dynamics were very different from those of cement. Hines, Joann. 13, 2015.). Obviously, that doesnt make a lot of business sense. However, the potential of growth and prosperity may remain a distant dream with impending challenges of poverty. In addition to bagged cement, we sold them rebar [steel reinforcing bars used to frame concrete structures] and other products. One of the most challenging tasks for Cemex was its entry into the Philippines market due to a lack of control of distribution channels by distributors. Many countries have resulted in huge cuts in infrastructural expenditure while the growth in the construction industry has drifted south. They decoupled charging freight from charging for the product. There were many cement manufacturing players which were dominantly captured different regions.. Cemex had acquired 15 companies internationally in different regions. Cemex Corporate Strategy 3 Cemex's Situational, Competitive, and Strategic Plan Analysis Cemex is a transnational construction materials company based in San Pedro, Mexico, near Monterrey. The sales guys had to learn not to wait for people to come in with orders; if markets were soft, they had to go out and propose solutions to problems that had not yet been brought to public attention. It defines itself as a provider of solutions for builders and local governments, particularly in emerging economies and for those seeking environmental sustainability. We knew that, compared with building asphalt roads, the initial investment was almost the same and the cost of maintenance was much lower. Headquartered in Monterrey, Mexico, CEMEX is a global leader in the building materialsindustry. Distribution costs have greatly been reduced in the process boosting the earnings of the company. But we could, since cement kilns burn at such a high temperature 1,600 degrees Celsius [3,000 degrees Fahrenheit] that they mitigate most of the negative atmospheric effects. Strategic planning has a notoriously bad track record. It lends itself to recipes like the CEMEX Way, which can be disseminated by a corporate center. CEMEX Strategy: To serve the Impoverished - The Strategy Story When we treat sustainability as a capability, it changes what we do about it. Saving money is not standard practice for most low-income families, and Mexicans are no exception. In the old days, it was: This is it. Cemex | Cement Industry Case Study | Blue Ocean Strategy Example Ill give you an example involving the ready-mix business. Technical consultation pertaining to the right quantity and quality of raw materials required to build a house or a single room was provided free of cost, which optimized the utilization of raw materials and minimized wastage. In this roundtable discussion, six CEMEX leaders, all interviewed at company headquarters in Monterrey, Mexico, talk about the companys capabilities system, how it developed, and the value that it has provided. VRIO analysis of Cemex Superior is a resource oriented analysis using the details provided in the Globalization of CEMEX case study. Worth mentioning is that the gap in cultural proximity which Cemex has heavily relied on for a long time could pose a huge challenge in penetration into these markets. These are large multinationals with several holdings across the globe hence posing serious competition to Cemex. CEMEX has expanded on the basis of the ring of grey gold, seeking . BlackRock has $7.9 trillion worth of Asset Under Management which is equal to 91 sovereign wealth funds managed. Early on, for instance, we realized we should use the same team of people, from planning, accounting, IT, and operations, for each acquisition. Participants were Jaime Elizondo, Luis Farias, Luis Hernandez, Ignacio Madridejos, Juan Pablo San Agustin, Karl Watson Jr.; moderated by Thomas A. Stewart. Joann (2009 para.1, 2), points out that innovation in packaging can transform a product from a commodity-driven product to a premium product category. San Agustin: Knowledge sharing also helped us with another alternative-fuel innovation that came to us through the RMC acquisition: the use of fuel derived from household waste as a substitute for fossil fuels in our cement manufacturing facilities. An analysis of hemorrhaging revenues by the company CEMEX led to a discovery of customer segments ignored for long by cement companies wilfully. About us, 2008. The result is a margin gain of $4 to $9 per ton of cement, 2 which could shift a traditional plant to the top quartile of . Mr. Zambrano talked about going from being an elephant to being a greyhound. Currently, he is working as an Associate Professor in the area of Marketing with Alliance School of Business under Alliance University, Bangalore. A new book questions the growing power and influence of central banks. 2022. High: Increased aggressiveness in marketing has led to an increase in the rivalry between the market players as they seek to protect their traditional domains. High-speed railway systems also require a lot of cement. Today, CEMEX is one of the leaders in this technology. 5 Hypothesis A growth strategy based on the acquisition and generating debt to a company, in this case CEMEX, must integrate a rigorous control of costs and expenses as well as an analysis of This has continued to draw down revenue as firms have been forced to cut down the output too much the dwindling consumers demand. Competitor Analysis. So they have to be tailor-made for each specific market. BusinessEssay. With most acquisitions, we found that for at least the first two years, we needed to have 20 or 25 CEMEX people working in different parts of the acquired company, making sure the new people understood our systems. It manufactures and sells cement, ready-mix concrete, aggregates, clinker and related building materials. Strategic Analysis of Cemex Harvard Case Solution & Analysis Each of these three members registered groups had to make a commitment of contributing 120 pesos per member per week for 70 weeks. At the time, we were burning fuel oil and natural gas two of the most volatile commodities in terms of price. MBA PESTEL : CEMEX: Transforming a Basic Industry Company PESTEL / PEST Digitization and the future of the cement plant | McKinsey Capabilities System One of its latest acquisitions was Southdown of the USA which helped it boost its image in the market. The company charged 15 pesos per member per week as a membership fee and in return, provided benefits that were unprecedented. While Cemex concentrated its marketing and expansion in emerging Latin markets due to cultural proximity, these companies had established a solid base in the developed world and were making impressive roads in the emerging markets. It sells an idea!! You have to train them. As part of this evolution, CEMEX rebounded from a near bankruptcy during the 2008 economic crisis to regain its position as a leading company in the global construction materials industry. We arent selling a product to you; were working with you on a solution. de C.V. ("Cemex") (NYSE: CX) is a global construction materials company that is building a better future through sustainable products and solutions. San Agustin: When we acquire a company, we listen. However, an economic crisis during 1994 and 95 in Mexico, made a cement company, CEMEX, think differently to circumvent the crisis, which later became the core part of its business strategy. They can also lead to the wastefulness of resources when they fail to succeed or when the right training is not administered to sales personnel. Due to its heavy reliance on the homebuilders for a long time, it laid very little emphasis on branding. My experience of internship with one of the largest cement companies in India twenty years back had provided me an opportunity to understand the business of cement in a closer way. The company began with the establishment of Cementos Hidalgo in 1906. 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CEMEX: Transforming a Basic Industry Company case study (referred as "Cement Cemex" for purpose of this article) is a Harvard Business School (HBR) case study covering topics such as Strategy & Execution and strategic management. BusinessEssay, 13 Dec. 2022, business-essay.com/cemex-companys-strategic-analysis/. PDF CEMEX: Globalization "The CEMEX Way" - MIT Sloan School of Management Cemex Corporate Strategy.docx - Cemex Corporate Strategy You just send out an email that says, Joe, you now report to Regina, and here are the new guidelines on decision rights. Likewise, incentives are relatively easy to deal with. We invest in training new people, talking them through our practices, and helping them assimilate. Theres this feeling of lets prove it to ourselves, our competitors, and the whole world that we can really extract more value out of those assets than the former owners. But you typically need the people of the acquired company to behave differently, and they dont do that automatically the day an acquisition goes through.
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