Cemex Essay

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3. Why CEMEX preferred equity entry mode (mainly acquisition) instead of non-equity entry mode (such as exporting) in its international expansion? Use relevant IB theory to support your argument. CEMEX opted for the acquisition based method of entry to a foreign country due to the increasingly difficult trading barriers imposed by the USA 4. Critically anayse the reasons for CEMEX and other firms to buy existing capacity to enter new fields rather than greenfield entry strategy? * Because CEMEX prefers transferring its skills to other cement companies * They believe they can reduce mistakes with their own organizational management 3. Reread the Management Focus on Cemex and then answer the following questions: a) Which…show more content…
Cemex is highly focused on efficient manufacturing and customer service. Distributors are rewarded for their sales, as are users. The primary benefit Cemex brings to host countries involves these competitive advantages. Cemex acquires companies and then transfers technological, management, and marketing know-how to the new units, improving their performance. The company has brought several acquired companies back to full production, increasing employment opportunities in the host country as well. c) Cemex has successfully acquired established cement makers in many countries. By acquiring companies rather than establishing them from the ground up, Cemex can avoid some of the delays that could occur in the start-up phase, while at the same time, capitalize on the benefits of an established market presence. d) Much of Cemex’s success appears to be built around its customer service and attention to distributors. Indeed, it could be argued that what sets Cemex apart from its competitors, or its competitive advantage, is its superior way of dealing with external stakeholders. It is significantly easier to duplicate this sort of advantage in a wholly owned operation than in a joint venture or through licensing arrangements. e) In 2006, Cemex announced that it would be pulling out of Indonesia. Cemex entered the Indonesian market in 1998, as part of an IMF sponsored privatization program. Cemex purchased a 25

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