Question Case Cemex Essay

Satisfactory Essays
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? CEMEX and their competitors have realized many benefits from globalization. The first of these was a reduction on tariffs associated with exporting their product. If the manufacturer has a localized facility, they do not have to pay export tariffs on the delivery of cement. Next, transportation costs are very expensive for cement. Tariffs aside, shipping or trucking cement long distances will erode margins or demand higher prices for a given manufacturers product. Both eat at the profitability of the business.…show more content…
This was not their only advantage. CEMEX also became one of the first providers of informal construction – bagged cement for retail sale. This market was less volatile and also had high demand in emerging markets. This business provided CEMEX a means of branding which should have helped to expand CEMEX’s brand identity among new customer bases. Another innovation that CEMEX led the charge on was a delivery guarantee within 20 minutes. They used GPS satellites and complexity theory (logistics) to connect the truckers, customers, and dispatchers. This in turn increased the probability of customer payments and decreased fuel, maintenance and payroll costs. Finally, CEMEX developed a system for regional directors to stay abreast of the operations from each department on a monthly basis. This led to a centralized and structured approach to solving business decisions. Competitors were less structured and frequently different regions operated more independently. Their upper management met less frequently and as a result may have been a little slower at recognizing trends and new wrinkles in the cement industry. 3. What accounts for the sequence in which CEMEX entered foreign markets? How do the markets it has entered recently compare with the markets that it entered early on? In the early 1970s CEMEX exported cement to the US. Later on the US implemented tariffs on trade and as a result
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