Cemex Essay

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Managing in a Global Context The Globalization of CEMEX case analysis CEMEX, building the future Professor: Miguel Athayde Marques 3rd October 2013 1. Find the drivers for the globalization of CEMEX The rise of globalization activities in the cement industry arrived only in the 1970s and was due to the development of factors supportive of functions underlying this industry: telecommunications, information technology, capital markets (...) However, there was one player that stood out, giving rise to its own way of internationalization – “The CEMEX way” – with a culture that blend modern, flexible management practices with cutting-edge technology. CEMEX’s geographical diversification was mainly done through mergers and acquisitions. By late 1980s, it was the largest producer in Mexico. Expansion first started in the US as it had several coastal terminals. After the US, CEMEX moved quickly to Spain, Latin America, South America and Asia. How and why did this all happened? When Lorenzo Zambrano became CEO of CEMEX in the 1980s, a debt crisis was installed in Latin America. As a way to protect the company, he decided it was time to push it towards foreign markets. He did this, as he understood from early on that their main product – cement – had low labor costs but high transportation costs. As a result a standardized operational strategy was set – uniform production to distribution chains with information technology. By making the business international, he would explore economies of scale and scope through diversification, pooling and sharing of best practices. The fact is, this industry had a clear market advantage, as cement is a mature product that needs little research and is globally perceived by customers in all the same way. Therefore, as it doesn’t require high skilled labor, CEMEX could locate their plants in low-cost regions.

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