Cemex case study strategy, the best...

Corporation vends chocolates, rice, pet products, etc. Overall, Cemex created a blue ocean of emotional cement that achieved differentiation at a low cost. Such thoroughness was thought to reduce the possibility of unpleasant surprises down the road, and to speed up the post-merger integration process if an acquisition was, in fact, undertaken. For example, it had consolidated the administrative and financial functions for six countries in the South American and Caribbean region in Venezuela.

As part of its investment in Semen Gresik, CEMEX had also entered into export commitments, which it intended to fulfill in part by setting up a grinding mill in Bangladesh to receive and process shipments of clinker from Indonesia. Why CEMEX preferred equity entry mode mainly acquisition instead of non-equity entry mode such as exporting in its international expansion? Negotiations with the government usually continued through the due diligence process, and meetings with local competitors and industry associations were often 9 The Globalization of CEMEX held as well to allay any concerns about the acquisition.

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However, the cyclicality of the construction sector made mediumrun forecasts somewhat dicey. At the beginning of the process, the team was briefed on the country and methodology, and attended good starting thesis statements awareness and teambuilding workshops.

Production and distribution systems are already in place and they are also acquiring the local management know-how which is both time efficient and cost effective way of entering a new market. Blue Ocean Strategic Moves Blue ocean strategy is based on over decade-long study of more than strategic moves spanning more than 30 industries over years.

For more than 15 years, Cemex has been contributing to solving the housing shortage in underserved areas through its Patriomonio Hoy program.

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  • Cement Industry - CEMEX

Raise Which factors need to be improved well above the industry standards to provide enhanced value to the customers? If a company has achieved market saturation with its existing customer base, it may want to expand globally to reach a new group of customers. CEMEX also thought that its emerging market business should command higher priceearnings ratios in cement than business in advanced markets—the reverse of the situation that prevailed.

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The PMI process took anywhere from six months to a year, during which team members kept their original positions and salaries, returning home one week in every six.

What is the geographic scope of its product and services?

Sales figures were reported daily, broken out by product and geography. What is the geographic scope of its product and services?

Corporation vends chocolates, rice, pet products, etc. The PMI process involved integration at three levels: 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.

Road transportation was the most expensive, and limited the effective distribution radius to miles. From the beginning, Walmart focused on small-towns, in rural or suburban areas.

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The research of W. CEMEX believed that its due diligence process was more specific and systematic.

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  • Despite the recession that followed, it managed to maintain margins at reasonable levels.
  • Cemex | Cement Industry Case Study | Blue Ocean Strategy Example
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  • Demand also tended to be higher in areas with a warm climate and lower under extremes of heat or cold.

The result: During the s and s, the U. In the current business environmentRed Ocean is often defined as a competitive environment where industry boundaries are clearly defined, and existing and new players are trying to out-perform each other using Value-Cost Trade Off.

The company produces and sells cement, ready-mix concrete. Federal Trade Commission for purchasing a distribution terminal with the intent of artificially raising them! The winner however, did not cemex case study strategy the total sum in pesos but rather received the equivalent building materials to complete format of a thesis proposal entire new room.

Dividing the value of one ton of production by the ratio calculated in the jewelry box essay step gives the value of one ton of capacity.

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Still, the Indonesian market had significant long-run potential, not least because its population numbered million three times that of the Philippines. Quella, Profit Patterns: Still, a host of other costs had to be layered on top of the costs of ocean freight for long-distance trade to take place see Exhibit 2.

It also began to diversify horizontally into areas such as petrochemicals, mining, and tourism in order to reduce the risks related to its dependence on a highly cyclical core business. Reduce Which factors Cement Cemex can reduce well below the industry level to structure costs? Cemex went a step further, throwing small festivities for the town when a room was finished thereby reinforcing the happiness it brought to people and the tanda tradition.

We do not see volatility as an occasional, random element added to the cost of doing business in an interconnected global marketplace. There had jewelry box essay been explicit cartels in the industry. At its debut, the Patrimonio Hoy building materials club that Cemex set up consisted of a group of roughly seventy people contributing on average pesos each week for seventy weeks.

Transforming a Basic Industry Company - Blue Ocean Strategy Blue Ocean University has network of world-class strategy experts and practitioners who help organizations build and sustain enterprise Blue Ocean strategy solutions capabilities. Culture, Marketing, Strategic management] Term Papers words 2. Opportunity identification While the logic of expanding to the U.

High cemex case study strategy costs in relation to production costs meant that there was only a limited distance within which a plant could deliver cement at competitive prices.

Company Analysis : Cemex Company

It was initially named as Cementos Hidalgo. In terms of global players, rivalry is high. When identifying a possible acquisition target, CEMEX also examined the potential for restructuring both the target company and the market as a whole.

It was founded innorthern Mexico in by opening the first cement plant whereby the world headquarters is also located in the city of San Pedro Garza Garcia.

Summary: CEMEX Case Study

Cost - Managers at Cement Cemex can use value innovation to overcome limitations suggested by Michael Porter management guru, strategy guru in his value cost trade-off as part of competition based strategy. Quick Links. Rainfall had a negative effect since it made cement-based construction more difficult and increased the likelihood of using substitutes such as wood or steel instead.

International Cement Review, Januarypp. CEMEX responded by folding the ownership of its non-Mexican assets into its Spanish operations and financing new acquisitions through the latter.

Red Ocean Vs Blue Ocean Strategy

Adrian J. Mars, Inc.

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The antidumping duties imposed in the late s by the United States on cement imports from Mexico are an example that will be discussed in some detail later on. Generally, supplier concentration in the industry is low; however, if you look at integrated cement production, suppliers are concentrated aprox. Cross-border investment in the United States had been concentrated in certain periods—most recently, and —instead of trickling in more continuously.

Inthe company transferred internal voice and data communications to its own private network.

Solved Blue Ocean : CEMEX: Transforming a Basic Industry Company Strategy Case Study Solution

Company fact book. A country had to have a large population and high population growth as well as a relatively low level of current consumption. Init sold its plant in Sevilla, as described above.

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The company globalized its market internationally and became one of the largest cement companies in the world. Cemex Company Words 10 Pages CEMEX is a multinational corporation that is specialized in the production of concrete and some other materials related with the construction sector.

Here are a few examples of blue ocean strategic moves from a variety of different industries and sectors. Based partly on the work of the Boston Consulting Group, he had concluded that geographic diversification within the cement business was preferable to horizontal diversification outside it.

Virtually all remaining Venezuelan capacity ended up in the hands of Holderbank and Lafarge. Value innovation can open up new uncontested market space for Cement Cemex. Cemex Words 11 Pages Cemex S.

Bargaining power of buyers: This gave international competitors their opening.

Globalization of Cemex - Words | Bartleby

HBS cases are developed solely as the basis for class discussion. Numerous other cemex case study strategy attributes affected cement demand as well. International Cement Review, Januaryp. By doing so, these cement companies could control the localized quarries, which give them the proximity to the raw material needed for cement production. Accelerated technological innovations and advances are improving industrial productivity, enabling suppliers to come up with vast array of products and services.

CEMEX Case Study Guide Questions

As of earlythe countervailing duty was still in place, although there were also reports that the United States was finally moving closer to repealing it. Since the company launched this new emotional orientation of Cemex coupled with its funding and technical services, demand for cement has soared.

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Restructuring the target company meant increasing its efficiency and optimizing capacity utilization. After finding that cement prices were higher in Mexico than in the southern United States and inferring that Mexican producers were dumping cement in the U. Authors -- Hau Lee, David W. Competition Cyclicality on the demand side combined with capital-intensity, durability, and specialization on the supply side to mean that overcapacity in the cement industry could be ruinous in its effects.

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Asia W. Overall, many regarded CEMEX as having shifted over time from an engineering-driven approach to one more dependent on economics. As cemex case study strategy result, eight U. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Given the fact that cement is necessary for the construction industry and the development of infrastructure all over the world, it is unlikely that it will be substituted in the near future.

One key difference was that country-level managers at CEMEX reported directly to regional directors 11 The Globalization of CEMEX whereas competitors often had an extra layer of area managers between regional and country managers. Supply Since limestone, clay and the cemex case study strategy raw materials required were abundant in many regions of the world, cement could usually be produced locally.

Growth had been achieved without compromising profitability: Holderbank and Lafarge were reportedly also interested.

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He also got personally involved in sending and receiving e-mail and using Lotus Notes, which was still unusual among local CEOs. Starting in and particularly after the summer ofthe largest and most concentrated wave of cross-border investment ever began in South East Asia.

Such demand lent itself to branding and promotion, which CEMEX first cemex case study strategy out in Mexico, before rolling masters degree scholarship application letter marketing campaigns to other countries. CEMEX produce, distributes, and sells cement, ready-mix concrete, and other construction production to more than fifty different countries.

He was a bachelor who devoted the vast majority of his time to the company, and encouraged his subordinates to do the same. Although initially it operated on a domestic level, various factors within its operating environment forced it to expand internationally.

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