Globalization of Cemex

914 Words Apr 24th, 2016 4 Pages
Case 7: The Globalization of CEMEX

Questions: 1. What benefits have CEMEX 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?
The globalization has significantly boosted profitability growth of companies in the cement industry through international trade and cross border investment flows. Possibility to operate in different foreign markets helps companies to diversify its business. It is highly beneficial strategy for cement companies because of the cyclical and economic downturns and upswings of the industry in different regions of the world. Also because of the localized specifics of cement production
…show more content…
These mergers ensured its market share leadership and gave financial resources to geographically expand further. In the same way CEMEX acquired large companies in Spain and Venezuela. What also made CEMEX a global leader is its emphasis on emerging markets. CEMEX gained a lot in the emerging markets because of the existing higher price-earnings ratios comparing to those in advanced markets.
In addition CEMEX’s heavy investments on IT had changed the way the company operated in a market comparing to its rivals. Company was one of the first who started automating plant operations in accounting and sales as well. At the end of the 1980s, it set up a satellite network so that it could transmit all the internal data of its plants around the world to its headquarters in Mexico. Also automation reduced human resources costs: a small group of employees can now run a big cement plant. Moreover CEMEX’s IT department found the ways to improve customer relationship management through the GPS navigational systems in trucks that guaranteed 20-minute site delivery.

3. What accounts for the sequence in which CEMEX entered foreign markets? How do markets it had entered recently compare with the markets it entered early on?
According to the author of the article CEMEX entered foreign markets through various stages of the expansion process: opportunity identification, due diligence, and post-merger integration. 1. Opportunity identification. In order to identify new

More about Globalization of Cemex