Cemex Case Study

I think the strategy CEMEX incorporated continues to work and that it should stay the course and concentrate on penetrating emerging markets that have high growth potential. Specifically, CEMEX should focus on the acquisition of companies in developing countries. CEMEX should continue to take advantage of price differentials to cross country borders, acquire access to South East Asian markets in particular, use its IT technology as a means of assimilation, and ultimately, decide what levels of integration (global versus multinational) it wants to achieve. Cement is a commodity business and has a low value to weight ratio. As such, it is considered as having low chances at successful global integration. Therefore, one would not consider CEMEX a company that would lend itself to consideration for globalization. As our Bartlett and Beamish readings point out, cement incurs “particularly high costs as geographic distance increases” which influence the costs of transportation and dampen the effect of on trade and investment flows. One would assume that the cement industry was not conducive to successful global integration.

I think that the heart of CEMEX’s success has been its global IT network and its focus on the acquisition of emerging markets. Keeping operations in sync require a varying to high degree of standardization. By having all CEMEX offices use the same software, hardware, and computer system, a CEMEX manager could fly to another country, plug in his computer, and know that things will work the same as back home. Standardization is key to globalization. Its IT system affects every aspect of CEMEX business, from supply chains to the assimilation of corporate culture. It is used to capture, process, and disseminate relevant information throughout the organization. As our Yip text indicates, “better access to worldwide data, the ability to service global customers, the integration of best practices and…processes through a single interface”...