CEMEX Expansion Strategy

2261 WordsJul 13, 201810 Pages
Introduction CEMEX is a global cement company from Mexico that dates back to 1906. It was formally established in 1931 through a merger between Cementos Hildago and Cementos Portland Monterrey. Although initially it operated on a domestic level, various factors within its operating environment forced it to expand internationally. Before venturing into other markets, the company opted to capitalize on the ideal environment created the Mexican Government. Nevertheless, the Mexico 1982 economic crisis forced the Government to liberalize the Mexican market thus attracting foreign competitors. To counter the new competition, CEMEX opted to…show more content…
By operating in its home Mexican market, CEMEX acquired the capability and the know-how needed to operate and enjoy decent return in volatile markets. This ability proved to be an important competitive advantage when it wanted to operate in Emerging market. For instance CEMEX was able to market cement as consumable good in such markets. Emerging markets, though characterized by some challenges, to a great extend, it offered greater advantages than markets in the developed countries. For starters, Markets in the developed countries were already developed. It is probably due to this that CEMEX opted to limit its presence in them. They were nevertheless more stable, with spending from government and infrastructure projects presenting favorable demand. Long-term growth potential, infrastructure development, and residential construction being experienced in emerging markets were however more appealing to CEMEX. Also important, was the fact that underperforming/undervalued asset and firms could be easily found in these markets therefore supporting CEMEX acquisition strategy. CEMEX was able to venture and operate successful in these markets by tapping into the knowledge based resource it had acquired while operating in its volatile home market. Strategically acquiring certain firms enhance its competitive advantage in

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