CEMEX case

What benefits have CHEM. 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 CHEM. and its global competitors derived from globalization: (strategic group, part of the big six competitors) International trade offered opportunities to arbitrage price differentials. Import from low cost countries and sell to 3rd parties to profit on arbitrage. FDA: After been exposed to the countervailing duty, CHEM. acquired a 1 million ton cement plant in

Texas to reinforce its ready mix of cement and distribution facilities in US. Firewall protection from US import/export taxes. Imported from Chinese companies led to doubling of profits of its activities in the US. A localized facility avoids export tariffs on cement. Reduction on transportation cost as well. Less transport cost means higher margins, and a more competitive price. Long run demand for cement was directly related to GAP. As CHEM. went global there should be a certain diversification of fluctuation risk concerning its revenue, and thus its profit.

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Building a fundamental of how to do it in the future. Created a set implementation strategy. Lower cost of capital. Industry? Please focus on comparing CHEM. with Hildebrand, which is the other large competitor focused principally on cement. What do this comparison and the other data in Exhibits 4-8 suggest about the competitive game being played out amongst major international competitors? Successful acquisitions. As CHEM. moved to more distant markets, the various stages in the expansion process – opportunity identification, due diligence, and post merger integration became formalized/standardized, reflecting past experiences.

IMP (post merger integration process) CHEM. distinguished itself by focus on emerging markets (high growth). They have huge market shares. Albeit, some competitors did as well. The weighted average growth rate in the countries CHEM. was present was 4%, compared to Hildebrand 3%. They go in with the focus to be market owner. At least 25%. They go in markets where spending is low. Target specific types of countries. Want to be the big player. Reduce competitors and exert market power. Utilizing gaps systems to link dispatchers, truckers and customers, thus guarantee them a 20 minute delivery. Mr..

Sombrero’s personal commitment to IT. CHEM. had always been a first mover in terms of IT. CHEM. system provided an enormous amount of information available to Cambrian and top management. CHEM. organizational arrangements differed from its competitors: Key difference: Country level managers at CHEM. reported directly to regional directors, whereas competitors often had an extra level of managers between regional and country Developed due to efficient integration. Focus on emerging economies. Low labor cost attracted the What accounts for the sequence in which CHEM. entered foreign markets?

Accounted for 4% of CHEM. EBITDA. Philippines and Indonesia. High growth 7. 5-8%. CHEM. went from 1 million metric tons in Spain to 4 million metric tons in Indonesia. This is stated to be strategic for further expansion into South East Asia. Spain has the highest value/ton Chile and Costa Rica. What recommendations would you make to CHEM. management for their global strategy for the next 3-5 years? In particular, what kinds of countries they should focus on? What aspect to focus on when expanding further

Cultural: They have a best practice, and Just role it out (standardization rather than local adaptation) Administrative Geographical Economic China has had tremendous growth the last decade. As well as India. Exploit the opportunity of using Indonesia as a point of departure, and knowledge from previous quotations to enter China and India. What about the rest of the BRICKS? Need to be competitive as one of the major global players. Or else CHEM. will be outperformed. Brazil, Russia, and South African, or even other African countries. All these countries fulfill the criteria of large population, and high growth

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