Lafarge Case

Case #4 - groupe 1

Overview of the company

The company

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An historical French company. It is one of the leader on the cement market. Diversification process implemented because of the globalisation and because of the need to challenge its competitors and lock up cash. It has succeeded in turning the group global by adjusting its organization and adapt it to its strategic aims. Bet on emerging markets while securing the activity on mature markets such as Europe.

The market

the demand is cyclical and correlated to the construction industry. its fixed cost are very high, requiring huge captive investment, high transportation expenses. the market is sensitive to price war making it difficult to penetrate or to maintain sound. competitive process is very complex and products need to be innovative, with a good quality...

The importance of fixed cost and the structure market has pushed Lafarge to make huge changes and to build a long term strategy that enable it to be profitable, produce enough cash and to reduce risk and its dependency to the market. Diversification, organizational transformation are among the answers brought by the group.

Lafarge vs globalization

Lafarge has transformed a rising issue into a business opportunity

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it has implemented a strong strategy based on medium and long term growth pipelines by focusing on winning on emerging market like Turkey while protecting your shares on mature markets its strategy lays on acquisition by buying local companies allowing the group to grow organically, taking advantage of already existing distribution network, acting locally... it has restructured its organization to adapt it the the global needs of a firm wanting to become global. It has pointed out the necessity to create a structure with open minded people as the group understood the necessity to make all culture work together .

"keep growing and growing profitability" : the market has played an...