Cemex Essay

297 Words2 Pages
What benefits CEMEX derived from globalization? The benefits derived by CEMEX from globalization are listed below. o Reduction of tariffs associated with exporting- it reduced the tariffs of product exportation by acquiring local plants and facilities instead. By doing so, CEMEX could control the localized quarries, which give it the proximity to the raw material needed for cement production. No need to ship the goods across the border, therefore no tariffs on the delivery. o Risk diversification- CEMEX could well spread their risks. If one market is not performing well, it could depend on the other ones. So, assuming there isn’t a world-wide recession, the revenues of its will be more stable because of diversification. o Talent across markets- Ability to identify new emerging markets and having advantage of an already set up network system o Proximity to raw materials gives benefits on distribution channel. as CEMEX acquired the local plants and built distribution terminals, it has gained a competitive advantage of transportation cost. o Advantage of distribution and delivery process through sophisticated information systems- How has it been able to outperform it’s leading global competitors in the cement industry. Several elements together have made the CEMEX the largest international trader in the cement industry. The most important one, is that CEMEX has always been distinguishing itself by the intent of its focus on emerging markets. The weighted average growth rate in cement demand in the countries it was doing business with was nearly 4%, whereas a growth rate of 3% for Holderbank and Lafarge, 2% for the other three international majors. And because of the peso crisis in Mexico, CEMEX has discovered a distinct customer segment. It has decided to open up the business with informal construction which demanded bagged cement through retail
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