Cemex Analysis

Name: Nai Li

Course: Mgmt 478

Date: Oct. 21th 2013

Title: Cemex Case Analysis

Southdown, Inc.

According to the materials in the case study, the competitive advantage of Southdown, Inc. can be analyzed as following. It is the second largest cement producer in the United States and American owned company. Since the oil crisis in the early 1970s, many cement companies in the US have been taken over by European companies. Later on in 1990, due to the recession in the US, cement price and demand declined, Southdown posted annual loss in excess of $40 million for next three years. During the same period, it was also faced with two lawsuits from U.S Environment Protection Agency. After that, the company began to work on minimize their cost. It invested heavily in technology, retiring or updating inefficient plants with newer dry-process technology. This was the main competitive advantage of this company, since dry-process production was considerably more energy efficient than wet-process production. As the United States emerged from the recession of the early 1990s, Southdown became profitable and in recent years, Southdown continued to grow revenue while decreasing costs through the implement of newer technology. However, it still has the low position in the stock market.

If Southdown, Inc. would consider to be acquired, those following reasons and conditions would make sense. First and foremost, making an acquisition will help the company increase their market share, since the cement market in U.S. is commodity –driven and very competitive. Second, acquisition will help the company to reshape the firm’s competitive advantage, which means to gain access to new and wider resources. Thirdly, it will contribute the company to learn and develop new capabilities. Southdown, Inc. will have opportunities shift core business into different markets. Finally, acquisition will generate diversify and spread risk due to uncertain environment.

Cemex Group

The...