...Founded in 1906, Cemex is one of Mexico’s few truly multinational companies, with market-leading operations in Mexico, Spain, Venezuela, Costa Rica, Philippines, Panama, Dominican Republic, Egypt, Colombia, and a significant presence in the Caribbean, Indonesia, and the southwest United States. It is the largest cement company in America and one of the three largest cement companies in the world, with revenues of $4.8 billion and close to 65 million metric tons of production. Cemex and its subsidiaries engage in the production, distribution, marketing, and sale of cement, ready-mix concrete, and related materials. Its strategy includes focusing on cement and concrete products, diversifying globally to cushion against volatility in local markets, developing efficient production and distribution processes, using IT to help increase flexibility, improve customer satisfaction, and reduce bureaucracy and excess staffing, and providing training and education for employees. Its state-of-the-art Tepeaca facility supplies one fifth of the Mexican market and may be the lowest cost cement producer in the world, with operating costs of $25 per ton, roughly $10 lower than the industry average, and emissions far lower than legal requirements. In 1992 Cemex purchased Spain’s two largest cement companies, reviewed, their operations thoroughly, invested in facilities, and reduced the workforce dramatically, such as by consolidating 19 offices into one. Although it was a laggard IT user through...
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...Case Study: Cemex A Digital Firm in the Making Question 1: How did digital technology transform the way Cemex ran its business? Because of the vision of the grandson Lorenzo Zambrano, Cemex moved from a very manual mode of operation to one where its processes were now done with the use of technology. With this in mind we can identify how Cemex was impacted by the use of digital technology below: (a) They were better able to manage “unforecastable demand”, relative to its competitors. a. All vehicles were connected to GPS tracking system b. As a result they achieved a reduced delivery time from 3hrs to 20 minutes c. Dispatchers were better able to monitor trucks d. They were able to anticipate delivery times and redirect trucks where necessary. (b) Reduction in Costs was realized as a result a. Trucks were able to deliver in shorter time frames and 35% less trucks were necessary to deliver the same amount of cement. b. Software package was used to anticipate power consumption requirements and also to facilitate use of machines during off peak hours resulting in lower electricity costs. (c) Increased revenue was realized a. Customers were now willing to pay premium price since Cemex was able to facilitate Just in time (JIT) delivery. This meant customers no longer had to have crews waiting for long periods pending delivery. b. All production facilities were linked via the satellite communications system and this facilitated better planning/forecasting c...
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...Economics & Business CASE 13.1 CEMEX: Growing and growing stronger? 1. What are the dynamics of industry concentration in the cement industry? Has internationalization led to higher concentration in the industry? Did the low consolidation level provide a rationale for international M&As? The cement industry was previously highly fragmented and localized, because of its raw materials factors and also high transportation costs. However, since the early 1980s, the global cement industry has started to consolidate. Internationalization led to higher concentration in the industry. It is because of cross-border acquisitions, which were performed by major international company. It reduces six major international competitors to three. The reason why there were international mergers and acquisitions was that mainly because of the prospective markets in emerging countries and the need to survive in the market. 2. What were the major objectives of CEMEX’s international acquisitions? Did CEMEX show any of the six biases identified in Ghemawat and Ghadar’s article? Did CEMEX pursue any of the alternative strategies proposed by Ghemawat and Ghadar? The major objectives of CEMEX’s international acquisitions were to survive in their markets and to grasp the opportunities to grow. CEMEX had found themselves suddenly competing with very large multinational companies when the Mexican government began to liberalize the economy. Thus, CEMEX thought that either they became...
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...Management Information Systems and Concepts CASE ANALYSIS Cemex: Incorporating IT into a Cement Company’s Strategy Founded in 1906, Cemex is one of Mexico’s few truly multinational companies. It is the largest cement company in the Americas and one of the three largest cement companies in the world, with revenues of $3.7 billion and close to 51 million metric tons of production. Cemex and its subsidiaries engage in the production, distribution, marketing, and sale of cement, ready-mix concrete, and related materials. Its strategy includes focusing on cement and concrete products, diversifying globally to cushion against volatility in local markets, developing efficient production and distribution processes, using IT to increase flexibility, improve customer satisfaction, and reduce bureaucracy and excess staffing, and providing training and education for employees. Its state-of-the-art Tepeaca facility supplies one fifth of the Mexican market and may be the lowest-cost cement producer in the world, with operating costs of $25 per ton, roughly $10 lower than the industry average, and emissions far lower than legal requirements. In 1992 Cemex purchased Spain’s two largest cement companies, reviewed their operations thoroughly, invested in facilities, and reduced the workforce dramatically, such as by consolidating 19 offices into one. With continued diversification in the 1990s, Cemex has operations in 22 countries. It is also Latin America’s...
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...Foreign Direct Investment In little more than a decade, Cemex, Mexico’s largest cement manufacturer has transformed itself from a primarily Mexican operation into the third largest cement company in the world behind Holcim of Switzerland and Lafarge Group of France with 2007 sales of $21.7 billion and more than $2.6 billion in cash flow. Cemex has long been a powerhouse in Mexico and currently controls more than 60 percent of the market for cement in that country. Cemex’s domestic success has been based in large part on an obsession with efficient manufacturing and a focus on customer service that is best in the industry. Cemex is a leader in using information technology to match production with consumer demand. The company sells ready-mixed cement that can survive for only about 90 minutes before solidifying, so precise delivery is important. But Cemex can never predict with total certainty what demand will be on any given day, week, or month. To better manage unpredictable demand patterns, Cemex developed a system of seamless information technology - including truck-mounted global positioning systems, radio transmitters, satellites, and computer hardware, that allows Cemex to control the production and distribution of cement like no other company can, responding quickly to unanticipated changes in demand and reducing waste. The results are lower costs and superior customer service, both differentiating factors for Cemex. The company also pays lavish attention to its distributors...
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...appropriate( Post merger Integration (PMI) process) ➢ Forward Integration ➢ In order support communication and decision making process the company has deployed satellite communication system, CEMEXNET, • The company uses its capital to acquire other companies ➢ Acquiring, building or buying terminal facilities in other markets and buy other companies in order to facilitate global expansion • This company exert effort to create common culture and common processes ➢ Standardized of business processes, technology, and organizational structure across all countries while simultaneously granting countries certain operational flexibility b) Illustrate how CEMEX has managed to attain a high level of operational efficiency throughout its distributed operations without a complex organizational structure. • Developed core competencies • Learning through the process of acquisition and integration • Innovative marketing and operations • Standardization of best practices, technology and organizational structure • Disposal of non-related businesses and non-core assets by management • Implement key information and internet based technology • Successful acquisition and short integration process(Successful Implementation of post-merger integration (PMI) process)...
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...Case Study: Cemex A Digital Firm In The Making Case Study: Cemex A Digital Firm in the Making Question 1: How did digital technology transform the way Cemex ran its business? Because of the vision of the grandson Lorenzo Zambrano, Cemex moved from a very manual mode of operation to one where its processes were now done with the use of technology. With this in mind we can identify how Cemex was impacted by the use of digital technology below: (a) They were better able to manage “unforecastable demand”, relative to its competitors. a. All vehicles were connected to GPS tracking system b. As a result they achieved a reduced delivery time from 3hrs to 20 minutes c. Dispatchers were better able to monitor trucks d. They were able to anticipate delivery times and redirect trucks where necessary. (b) Reduction in Costs was realized as a result a. Trucks were able to deliver in shorter time frames and 35% less trucks were necessary to deliver the same amount of cement. b. Software package was used to anticipate power consumption requirements and also to facilitate use of machines during off peak hours resulting in lower electricity costs. (c) Increased revenue was realized a. Customers were now willing to pay premium price since Cemex was able to facilitate Just in time (JIT) delivery. This meant customers no longer had to have crews waiting for long periods pending delivery. b. All production facilities were linked via the satellite communications system and this facilitated...
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...9-701-017 REV: NOVEMBER 29, 2004 PANKAJ GHEMAWAT The Globalization of CEMEX Geographic diversification enables us to operate in multiple regions with different business cycles. For the long term, we are trying to ensure that no one market accounts for more than one third of our business. Yet we do not diversify simply to balance cyclic downturns and upswings. We do not see volatility as an occasional, random element added to the cost of doing business in an interconnected global marketplace. We plan for volatility. We prepare for it. We have learned how to profit from it. Lorenzo Zambrano, CEO of CEMEX.1 In 1990, Cementos Mexicanos was a Mexican cement company that faced trade sanctions in its major export market, the United States. By the end of 1999, CEMEX operated cement plants in 15 countries, owned production or distribution facilities in a total of 30, and traded cement in more than 60. Non-Mexican operations accounted for nearly 60% of assets, slightly over 50% of revenues and 40% of EBITDA (earnings before interest, taxes, depreciation, and amortization) that year. CEMEX’s sales revenues had increased from less than $1 billion in 1989 to nearly $5 billion in 1999, and it had become the third largest cement company in the world in terms of capacity, as well as the largest international trader. Growth had been achieved without compromising profitability: in the late 1990s, its ratio of EBITDA to sales ranged between 30% and 40%—ten to fifteen percentage...
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...INDIVIDUAL ASSIGNMENT CASE STUDY IGB40402 MANAGING DIGITAL FIRM INSTRUCTION: Read the case study carefully and answer the questions. Any plagiarism will be penalized and no marks will be given. Duration: Monday 17th October 2011 – 21st October 2011 Late submission will not be entertained. CEMEX: A Digital Firm in the Making Cemex, based Monterrey, Mexico, is a 98-year old company that sells cement and ready-mix concrete products. It has 53 plants around the globe in countries including the United States, Spain, Egypt, Colombia and the Philippines, and is the world's third largest cement and concrete manufacturer. The concrete business is an asset-intensive, low efficiency business with unpredictable demand. Cemex dispatchers used to take orders for 8,000 grades of mixed concrete and forwarded them to six regional mixing plants, each with its own fleet of trucks. Customers routinely changed half of their orders, sometimes only hours before delivery, and these orders might have to be rerouted because of weather change, traffic jams of problems with building permits. Cemex's phone lines were often jammed as customer's truckers and dispatchers tried to get orders straight. Many orders were lost. Until about 15 years ago, Cemex's Information Technology Division was viewed as a support department for the sales function. Cemex did not have an adequate computing or telecommunications infrastructure. Only a few executives had personal computers and integrated systems...
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...A Case Study – CEMEX PROBLEM STATEMENT As the third largest manufacturer of cement, CEMEX’s goal is to fully satisfy the building needs of its global customers and create value for its stakeholders by becoming the world’s most efficient and lucrative building-solution company. To achieve this goal, CEMEX should implement several strategies. First, the company should focus on a differentiation strategy by expanding the scope of its business beyond producing and selling cement and concrete. By providing distribution and logistics services CEMEX could be involved in the whole spectrum of the construction industry. Second, as a company that has become successful through implementation of merger and acquisition strategies it should take into consideration an organic growth strategy as a primary solution to distribution of construction materials around the world. As a company that has successfully served its customers in countries with different culture and political and economic systems, CEMEX has acquired deep understanding and knowledge of the local and corporate culture of its clients which it has parlay into a tremendous advantage when opening new construction supply stores in those countries (Garcia, 2011). Third, while focusing on international expansion, CEMEX has to ensure a competitive advantage in domestic operation. To achieve both global efficiency and local responsiveness the company should build a network of its customers, partners, suppliers, and stockholders through...
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...CEO of CEMEX, 1992 CEMEX aquired the two largest Spanish cement producers Hiring “High Potential People“ In reality young and inexperienced people willing to work insane hours to achieve financial goals Cost reduction by 30% 1997 The most admired company in Spain, Actualidad Economica Case study in transforming low tech enterprise into a model of info age efficiency Streamlining Management Reducing peak hour Energy Use Introducing alternative Fuels Automation of all Plants Reduction of Inventory levels 1989 Anti Dumping Duty imposed by International Trade Commision, 58% on all Mexican cement imports Acquisition Institutionalize acquisition process, refine post-aquisition integration strategy Innovation 1988 CEMEXNet first Mexican Company to own its own satelite communications network Today Links all global operations Detailed live access to financial data, truck routs, operational data from all individual plants 2003 Wired Magazine 5th Masters of innovation, technology, and strategic vision CEMEX overcame this burden by importing cement in to the United States from third parties from other nations than Mexico CEMEX sends post-merger integration teams (PMI) to analyze and improve operations PMI Teams attend cultural awareness and teambuilding workshops Regional Managers visit the site every month, country presonally reports back to the CEO to the US West CoastCheap Chinese cement through CEMEX own network CEMEX became...
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...CASE STUDY 1 http://www.scribd.com/full/38399959?access_key=key-222j5zlz3s8dd9x2b6pu CASE STUDY 2 http://www.antiessays.com/free-essays/99985.html CASE STUDY 3 1) DESCRIBE THE MAIN DIFFERENCES BETWEEN THE PRIMARY SECONDARY AND TERTIARY SECTORS. GIVE EXAMPLES OF HOW CEMEX CARRIES OUT WORK INVOLVING EACH OF THESE THREE SECTORS There are three main sectors of industry. CEMEX’s business covers all three sectors of industry: * Primary – involves extraction, processing and use of raw materials from the earth * Secondary - manufacturing finished goods and construction activity * Tertiary – providing services to business and consumers, e.g. retail, finance and transport. Primary activities In its primary activities, CEMEX extracts raw materials from the land or at sea. The process of extracting mineral deposits has to fit in with the government’s Regional Minerals Plan. This specifies how much material needs to be extracted to ensure a fair balance across the country. Before extraction can begin, CEMEX must obtain permission from local authorities. Its plans must include sensitive ways of working, restoration and after-care of sites. This ensures the quality of the environment is maintained and improved once extraction is complete. CEMEX’s marine aggregates business involves extracting sand and gravel from the sea bed by dredging. Dredged aggregates are vital for the future development and maintenance of our hospitals, schools, housing and transport...
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...CEMEX – Sustainable performance in the construction industry -- a case study Introduction Cement was invented in England in 1824 and is a key ingredient in concrete. Every year the average family uses one tonne of cement without even knowing it. No house, school, bridge or road would be built without it. Concrete is the second most consumed substance in the world after water. It is made from aggregate, cement and water and can be mixed on building sites or supplied ready-mixed from a concrete plant. The UK’s first readymixed concrete plant was set up by a company called Ready Mixed Concrete (RMC) in the 1930s. In 2005, CEMEX acquired RMC. Today CEMEX is one of the world’s largest building materials companies. It is a leading supplier of aggregates (sand, gravel and crushed rock), cement and readymixed concrete. It also produces asphalt, concrete blocks and mortar and has a significant share of those markets. It operates in more than 50 countries and employs over 50,000 people. CEMEX UK has three cement plants, nearly 60 quarries, 40 asphalt plants and over 200 readymix plants. CEMEX’s customers range from multinational building companies to individuals building their own homes. In the UK, CEMEX generates £1 billion in annual sales. The expanding UK economy has seen an increase in the demand for roads and buildings. CEMEX plays an essential role in contributing to creating Britain’s infrastructure. CEMEX • Cement • Ready-mix concrete. • Aggregates ...
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...Introduction While Cemex has a strong preference for acquisitions over starting fresh, this poses several key root problems for both Cemex and the host nations. Cemex had to face some challenging questions; What are the primary factors in why Cemex has chosen Direct Foreign Investments versus some alternatives; What is the impact of their choice in FDI on the host-country, as well as home-country. What are the primary factors in why Cemex has chosen Foreign Direct Investments versus some alternatives? There are several options to consider when a company wants to move into the international global market. The biggest questions firms usually ask is, “Why do firms go to all of the trouble of establishing operations abroad through foreign direct investments when two alternatives, exporting and licensing, are available to them for exploiting the profit opportunities in a foreign market?” (Hill, 2008). This question was undoubtedly debated heavily by Cemex prior to investing in foreign markets. One of the industry specific novelties of cement manufacturing, is the product itself. “The company sells ready-mixed cement that can survive for only about 90 minutes before solidifying, so precise delivery is important” (Hill, 2008). This industry is already at a predisposed peril if it were to consider exporting their goods. The cement industry requires this product to be made on site. Due to this requirement, Cemex could have considered Licensing, “Occures when a firm...
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...Pyramid CEMEX: Innovation in Housing for the Poor CEMEX is a multinational cement manufacturing company operating out of Mexico. It is the largest cement manufacturer in Mexico, the second largest in the United States, and the third largest in the world. The company has operations on four continents and recorded global revenues of $6.54 billion in 2002 with a gross margin of 44.1 percent. THE INNOVATION. . . CEMEX leads the paradigm shift of companies profitably providing housing for the poor, the Tier 4 population, instead of governments or not-for-profit organizations. CEMEX manufactures and sells raw cement, ready-mix concrete, aggregates, and clinker (used to make cement) under different brand names. As the largest cement company in Mexico, CEMEX operated in a highly protected legal environment with little competition until the 1990s. It competed mainly on price and controlled 65 percent of the market share in Mexico. However, during the 1990s, the legal barriers in Mexico broke down, paving the way for international competition. CEMEX found itself operating in a highly competitive open environment. Starting in 1987, under the leadership of Mr. Lorenzo Zambrano, CEMEX experienced explosive growth, mainly through acquisitions and global expansion. Today, the company has 235 cement and ready-mix plants in Mexico, 60 in the United States, 85 in Spain, 45 in Venezuela, 4 in Indonesia, and 4 in Egypt. In the new competitive arena and under new leadership, CEMEX fundamentally...
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