Globilization of Cemex

globilization of cemexQuestion 2

Cemex is the number three in the world cement industry in terms of production capacity and has maintained the highest level of profitability from 6 leading global competitors (its EBITDA margin of between 30-40% in the late 90 ' s is 10-15% higher than the others), reflecting that the company has gained a competitive advantage in its sector. The following is an analysis of the value activities specifically related to Cemex's global strategy against Holderbank, grouping the elements of value and evaluating them by their effects, to identify the resources, skills and distinctive competencies that constitute its source of advantagecompetitive and corporate.

Increase the volume of production and sales, and growth: Cemex had no need to expand globally, since its domestic market in Mexico is relatively small and that in 1989 the company had mastered 2/3 of the capacity in which he had little space to grow. In addition, the entry of Holderbank in Mexico in the early 90 `s it generated a strong competitive pressure, since that company already had a significant global presence.

Reducing costs: a) Operating costs: Cemex acquired companies with strong involvement of local capacity through restructuring and low cost structure.However, in calculating operating costs per ton of cement according to data from Exhibit 4, it holds that Cemex and Holderbank out with nearly the same cost of $ 78 per ton; b) The company operates a Process Integration postacquisition very efficient compressing almost 2 years (Spain 1992) to 100 days, reducing disruption costs and integration; c) Cemex has reduced the cost of capital by reducing risk of its business portfolio, tax benefits, asset collateral and fundingacquisition by operating in Spain, etc.., which although probably not a source of competitive advantage over Holderbank, as this can also access these benefits, it is critical for Cemex to go beyond Mexico's financial market and avoid a significant...