Cemex Case

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As outlined by CEMEX’s financial performance and ability to diversify their product and service offerings, this strategy is certainly creating economic value for the company. They have been able to command higher than average prices than their competitors because of their emphasis on customer service, and due to the international brand they have built. As well, CEMEX's success is due in large part to its efficiency in manufacturing and leadership in using IT to improve productivity. CEMEX is a first mover in using IT in an otherwise low-tech setting, and they have benefited because of this on both a productivity and profitability standpoint. CEMEX also uses global positioning satellites to connect dispatchers, truckers, and customers in a system that could track deliveries and guarantee them to within 20 minutes rather than the usual 3-hours-plus (Ghemawat, 2004). This has led to an increase in customer willingness to pay and a decrease in fuel, maintenance and payroll costs. All of these things have helped CEMEX build a strategic advantage for themselves, however in order for them to make it sustainable their focus will have to continue to be on seamlessly integrating their business model into these international markets. CEMEX conducts its acquisitions in a very disciplined manner in order to reduce the number of competitors, achieve the largest market share among those competitors, and own a controlling interest in its acquired companies (Ghemawat, 2004). However, from a business standpoint, they must be conscious of concerning all of their resources with gaining market power, and not enough on how to become a part of the new culture. CEMEX can ensure sustainability of their strategic advantage by putting a greater focus on learning the acquired company’s native language, hiring new employees that represent that culture and varying the management strategies to better suit individual nations.

Resources

Ghemawat, P. (2004, November 29). The Globalization of CEMEX. Retrieved February 02, 2017, from https://cb.hbsp.harvard.edu/cbmp/content/59989778