CEMEX: Analysis of Business Strategy, Competition, and Growth

This report analyzes CEMEX's business strategy and competitive position within the global cement industry, focusing on its expansion through acquisitions. It examines how CEMEX has increased its scope, both horizontally and vertically, to reduce reliance on its domestic market and achieve market dominance. The report evaluates the benefits and disadvantages of CEMEX's acquisition strategy, assessing whether the acquisitions have produced the anticipated results. It also investigates whether CEMEX's international strategy aligns with a multidomestic, global, or transnational approach. Furthermore, the report analyzes CEMEX's financial performance, including sales growth and profit margins. Finally, it offers strategic recommendations for Lorenzo Zambrano, considering options such as asset divestiture, new financial strategies, and other potential strategic avenues for future growth and success.

CEMEX BUSINESS
STRATEGY AND
COMPETITION
STUDENT’S NAME
INSTITUTIONAL AFFILIATION

The Impact of CEMEX
Competitive Strategy
 Acquisition of companies across the Globe to
reduce dependency on the domestic market. (pg 1)
 Increased Debt burden in the running of the
organization. (Pg 1)
 Business diversification through venturing in other
sectors to ensure its able to always make profit.
 Utilization of technology to reduce the production
cost as well as reduction in the delivery time thus
became the best option for cement customers. (Pg
3)
 Unique Branding to change the customer
perspective on their commodities.

How the company’s senior management has chosen to
increase the horizontal or vertical scope of the firm
 Increased Customer base through Acquisition .
 Decentralization of company’s operations and
centralized decision process.
 Integration of the acquired companies called the
modus operandi.
 Supporting of and guaranteeing permanent
standardization, eight (e-groups) for process
effectiveness.
 Shifting the decision-making power to the hands
of the stakeholders so called people so as to
deliver their will in operations.
(Answers from Pg 1, 3 and 4)

Benefits of Cemex’s Acquisition Strategy
Increased
customer
base
Diverse
Market for
their
products
Market
dominancy
Increased
capital base
as well as
returns
1 432
Have the acquisitions failed to produce anticipated
results?
Cemex has succeeded in realizing the the goals of
Acquisition.
Evidenced By:
 Acquisition of companies in North America, Latin
America, Asia And more than 50 countries (Pg 1).
 Reduced Debt burden from 30% to 17% (Pg 9)

Disadvantages Of CEMEX Increase In scope
• Increased Dept Burden: Some of the
companies are Acquired on loans (Pg 2,3)
• Increased operations cost as the various
companies need to be incorporated (Pg 1).
• Increased human resource demand to man
the various branches of the company (Pg
7).
• Company reputation distortion from the
creditors and investors (Pg 1).
• Increased data handling and movement (Pg
6).

The % showing the company margins
Analysis From the data
given between page 12 and
page 15

ACQUISITION BY REGION

Question 4
Has Cemex’s increase in scope
also been a part of its
international strategy?
 Cemex’s Increase in scope can be
considered as part of the
company’s international Strategy.
 This is because the company is
looking for more sources of
resources which cuts across the
company’s customers’ needs.
 If the customers are consistent on
the company, it implies that most of
the resources owned by the
customers will end up on the
company’s pool.
Is the international strategy best
characterized as a multidomestic strategy,
global strategy, or transnational strategy?
• The international strategy
is best characterized as a
global strategy.
• The products are
standardized globally.
• The decision making
process is done in a
centralized manner.

Question 6: Lorenzo Zambrano
Technological Advancement
• Being on the decision making body of
CEMEX, Lorenzo Zambrano should
leverage on emmerging technology.
• This will cut down the operation costs
and reduce the quantity of human
resource.
• Using technological Analystics,
Cemex will be able to know which
section of the organization should the
resources be channeled to.
Recommendatio
n:

Question 6: Divesting assets or new
financial strategies
Should the
company
consider
divesting
assets or new
financial
strategies?
 The senior management of the organization
should consider coming up with new
financial strategies as a way of moving
the company ahead.
 Assets are essential in making the company
financially stable but strategies will always
result in ensuring the company generating
income.
 An asset may loose in value but a strategy is
subject to modification to suit the business
context at hand.

Question 6: Lorenzo Zambrano
1)Backwards
Strategy
2)New Products for
New Customers
3)Alternative
Channels
Are there
other
potential
strategic
options
that he
needs to
consider?

References
Lessard, D. R., & Reavis, C. (2009). CEMEX:
Globalization “The CEMEX Way”. In MIT Sloan
Management Case Study, 09-039 (pp. 1-21).
Jones, G. G. (2017). Business
History, the Great Divergence and
the Great Convergence.