preview

CEMEX Case Analysis : Cement Industry

Satisfactory Essays

IBTISAAMA YAHAYA AHMED
Cement industry is one of the most attractive industries now as concrete is the second most consumed product in the world. The cement industry is however characterized by their pricing system (basing point system), its cartel nature and its entry restrictions. The CEMEX case depicts the good business strategies, excellent leadership and how to be successful in the global market. The interesting aspect of the case is how CEMEX maneuvered in to the global market and was recognized as the third largest cement company. Thus, how it overcame the issues of trade sanctions, the crisis in its operating countries, its acquisition strategy etc. is astounding. CEMEX really understood the concept of globalization and International management.
One major benefit why firms like CEMEX will like to go global is to increase their profitability. Exhibit 9 of the case study shows that the operating margin, the EBITDA margin and the EDITDA OF CEMEX kept on increasing. For instance, the EBITDA margin increased from 28.6% in 1998 to 37.1% in 1999. This is highly due to the increase in revenue from the sales of the firm’s products in other countries. You could also see that sales kept on increasing from 1989-1999. Looking at the total sales of CEMEX one will realize that the US accounted for 12% of sales and 7% of EBITDA and it applies to the other countries that CEMEX and the other majors engaged in.
Furthermore, the cement industry and specifically CEMEX could reduce

Get Access