...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 large...
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...1. What made CEMEX go beyond domestic borders? CEMEX needed to go international for various reasons, the first was that when the Mexican economy opened up, it made the cement industry vulnerable to foreign threats. Due to this foreign competitors such as Holderbank and Lafarge, CEMEX needed to diversify geographically to grow and survive. Secondly, by acquiring two big cement companies at the end of 1980s, CEMEX owned already a big market share of the Mexican cement market, which made the growth in its domestic market not appealing anymore. Third, CEMEX wanted to fight against the seasonality of the cement Mexican industry and lower its dependence from the Mexican market. By going in foreign countries they were able to counter this seasonality effect especially in emerging country. This seasonality is explained for the fact that the consumption of cement during the summer is higher than during the winter (especially due to the rain). 2. On what differentiation did CEMEX sustain its competitiveness in the early days of internationalization? The CEMEX began the international business in the early 1970 when it began to export to the U.S. market. At that time, CEMEX, in order to differentiate themselves maintained a low price. CEMEX notice that the prices of cement in different counties were different. Which enabled CEMEX to make profit by diverting low-priced imports away from one’s own market. Since the cement industry is a rather mature industry, with several hundred years...
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...INTERNATIONALIZATION STRATEGIES FOLLOWED BY THREE MEXICAN PIONEER COMPANIES GRUPO MODELO, GRUPO BIMBO and CEMEX ISSUES AND CHALLENGES José G. Vargas-Hernández, M.B.A;Ph.D. Profesor Investigador miembro del Sistema Nacional de Investigadores Departamento de Mercadotecnia y Negocios Internacionales Centro Universitario de Ciencias Económico Administrativas Universidad de Guadalajara. Periférico Norte 799 Edificio G-306 Zapopan, Jalisco C.P. 45100; México Tel y fax: +52(33) 3770 3343 Ext 5097 josevargas@cucea.udg.mx,jgvh0811@yahoo.com,jvargas2006@gmail.com Mohammad Reza Noruzi, EMBA, PhD Candidate Policy Making in Public Sector Islamic Azad University, Bonab Branch, Iran Young Researchers Club Member, IAU Bonab, Iran Tell: +98- 412-7238893-5 mr.noruzi@modares.ac.ir mr_norouzi@pnu.ac.ir mr.noruzi.pnu@gmail.com Abstract The opening of the Mexican economy and globalization bring new opportunities for Mexican companies to expand their markets and get their products around the world. The internationalization process requires a sound strategy for the consolidation in foreign markets. The aim of this study is to analyze the different internationalization strategies followed by three Mexican companies with a global presence: Grupo Modelo, Grupo Bimbo and Cemex. We conclude that the differences in their strategies arise from the characteristics of each of these companies. Keywords: Mexican companies, strategy, expansion, internationalization. 1 INTRODUCTION The landscape of this...
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...Cemex: High Tech Cement Report title page +names of team members To be done Executive Summary To be done Question A. Based on case data outline the strategy followed by Cemex to achieve its position of prominence in the cement industry. What factors and resources equipped the company to grow so successfully over the period described in the case? Also, compare Cemex with Cisco. Where are they similar and where do they differ? Cemex utilized four key strategies to achieve a position of prominence in the cement industry. First, Cemex innovated state of the art technology to outperform competitors. Cemex leaders challenged the operations groups to develop more efficient ways ways to produce concrete and bought technology through acquisitions. A telecommunications network between 11 plants was established as early as 1988. The IT consulting group, Cemtec, was spun off which utilized online surveys to manage customer relations. Second, Cemex converted the commodity business into a specialty business by helping their end users improve profitability. E.g. in Mexico City, by guaranteeing delivery times of 20 minutes or less, the contractors maximize the cost effectiveness of the crews working on the site. Third, Cemex bought out competition in markets they wanted to expand influence. In some geographies, such as Mexico, Cemex owned >70% market share through acquisitions. Lastly, Cemex embraced risk management as one of its core competencies...
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...6. Evaluating new markets 6.1 Criteria for evaluating new markets Criteria for evaluating the geographical market in general Criteria for evaluating industry markets inside the geographical market Key figures Key figures Development of population Development of GDP Development of GDP per capita Development of quantities in total and per sub-market Development of prices in total and per sub-market Development of market volume in total and per sub- market Legal restrictions for economic activities Possible legal forms Conditions for profit repatriation Conditions for sales (e.g. local production) Operations risks Society Political system Ethnic and religious groups Languages Demographic structure Cultural distance Political risks Market system Players Flows of products and services Flows of information Producers and traders Sub-markets National and international competitors Wholesalers and retailers Competitive intensity Infrastructure Customers Telecommunications infrastructure Health care system Link between customer segments and sub-markets; industry segments Demand similarity Traffic infrastructure Customer segments © 2012 R. Grünig/D. Morschett 6. Evaluating new markets 6.2 Process for evaluating new markets 1. Producing an initial list of potential new markets 2. Eliminating the less attractive markets = usual ...
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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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...advantages, than MNEs that came before. Finally, research on Indian MNEs can help identify generic strategies for internationalization, examples of which are provided in the article. By pursuing the lines of inquiry proposed, research on Indian MNEs can contribute not just to better local practice but also to broader theory building about early-stage internationalization. Ravi Ramamurti is CBA Distinguished Professor of International Business and Director, Centre for Emerging Markets, at Northeastern University, USA. E- mail r.ramamurti@neu.edu. This essay draws heavily on the author’s two papers (“Why Study Emerging-market Multinationals?” and “What Have We Learned about Emerging –market Multinationals?”) in Ravi Ramamurti & Jitendra V. Singh (eds.) (2009), Emerging Multinationals in Emerging Markets, Cambridge, UK: Cambridge University Press. Research on Internationalization of Indian Firms Research on India’s emerging multinational enterprises (MNEs) may be intrinsically rewarding for India specialists, but to interest the broader community of international business (IB) scholars, it must contribute to IB theory more generally. In this essay, I will suggest a few ways in which such a contribution might be made. My argument, quite simply, is that the extant IB literature on how firms become multinationals is rather limited and that research on the internationalization of Indian firms provides an...
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...B2B Brand Management Philip Kotler ´ Waldemar Pfoertsch B2B Brand Management With the Cooperation of Ines Michi With 76 Figures and 7 Tables 12 Philip Kotler S. C. Johnson & Son Distinguished Professor of International Marketing Kellogg School of Business Northwestern University 2001 Sheridan Rd. Evanston, IL 60208, USA p-kotler@kellogg.northwestern.edu Waldemar Pfoertsch Professor International Business Pforzheim University Tiefenbronnerstrasse 65 75175 Pforzheim, Germany waldemar.pfoertsch@pforzheim-university.de ISBN-10 3-540-25360-2 Springer Berlin Heidelberg New York ISBN-13 978-3-540-25360-0 Springer Berlin Heidelberg New York Cataloging-in-Publication Data Library of Congress Control Number: 2006930595 This work is subject to copyright. All rights are reserved, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilm or in any other way, and storage in data banks. Duplication of this publication or parts thereof is permitted only under the provisions of the German Copyright Law of September 9, 1965, in its current version, and permission for use must always be obtained from Springer-Verlag. Violations are liable for prosecution under the German Copyright Law. Springer is a part of Springer Science+Business Media springeronline.com ° Springer Berlin ´ Heidelberg 2006 Printed in Germany The use of general descriptive names, registered...
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...Marketing Channel Strategies in Rural Emerging Markets Unlocking Business Potential By Benjamin Neuwirth Benjamin Neuwirth, Kellogg School of Management, bneuwirth2012@kellogg.northwestern.edu 1 EXECUTIVE SUMMARY In his landmark book “The Fortune at the Bottom of the Pyramid,” C.K. Prahalad describes the profits that can be earned by selling products to “Bottom of the Pyramid” customers. While there is truth to this, companies face unique challenges when operating in the rural regions of emerging markets where many of these customers live. For example, the consumer population is dispersed over a wide geographic area, transportation infrastructure is often poorly developed, and many consumers have sporadic and extremely low incomes. This paper examines these challenges from a marketing channel perspective. The fundamental question is: How can companies entering into rural emerging markets design a marketing channel strategy that meets the needs of customers and allows for the long-term profitable success of the business? I begin answering this question by examining common challenges that companies operating in this environment face. Each challenge is accompanied by examples of companies that have solved the problem in a unique way. Then, I develop a generalized framework for designing marketing channels in rural emerging markets. Finally, I apply the framework to d.light Design, a company that manufactures and sells solar lanterns in India and Africa and that I worked...
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...AUL_KASLIK – MBA Helen Deresky International Management CHAPTERS 6,7,8,9,10& 11 Ali Sulaiman 71859876 aassbk@gmail.com AUL_KASLIK – MBA Helen Deresky International Management Formulating Strategy ng Outline Opening Profile: Global Companies Take Advantage Global Integrative Strategies Using E-Business for global Expansion E-Global or E-Local Entry Strategy Alternatives Reactive Responses Exporting; Licensing; Franchising; Contract Manufacturing; Of/shoring; Service Sector Outsourcing; Turnkey Operations; Management Contracts; International Joint Ventures; Fully-Owned Subsidiaries; e-Business Proactive Reasons Management Focus: Mexico's Cemex Reverses Course to Comparative Management in Focus: Strategic Planning for the EU Market Strategic Choice of Opportunities in South Africa Reasons for Going International Respond to Global Downturn Strategic Formulation Process Steps in Developing International and Global Strategies Mission and Objectives Environmental Assessment Institutional Effects on International Competition Sources of Environmental Information Internal Analysis Competitive Analysis Strategic Decision-Making Models Global and International Strategic Alternatives Approaches to World Markets Global Strategy Regionalization/localization Ali Sulaiman 71859876 aassbk@gmail.com Timing Entry and Scheduling Expansions The Influence of Culture on Strategic Choices Conclusion Summary of Key Points Discussion...
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...Figure 8.1 Figure 8.2 Figure 8.3 Figure 9.1 The Breakout Strategy Cycle Companies Getting on the Fast Track Companies Staying Out Front Types of Capital and the Capital Accumulation Process The Vision Wheel State Transition for Harley-Davidson: Organization State Transition for Harley-Davidson: Culture State Transition for Harley-Davidson: Relationships State Transition for Harley-Davidson: Markets The Six Pillars of a Value Proposition Leveraging up the Apple Value Proposition Reconciling Different Value Propositions Leveraging up Samsung Electronics’ Value Proposition Components of a Business Model Aligning the Business Model and Value Proposition Business Model Needs Analysis Delivering Strategy System Balance and Strategy Delivery at CEMEX Organizational Culture and Cultural Reproduction Breakout Leadership Capabilities Chapter 1 Breakout Strategy ______________________________________________ We all want to identify the essential ingredient that makes for outstanding business success, the decisive factor that differentiates exceptional companies from those that are just plain average. Sadly, like the elixir of...
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...Chapter 1: Expanding abroad Voorbeeld MNE: Intel, Unilever, Samsung, McKinsey Starbucks Vb. blz. 3 toont aan dat de invloed van MNE op de wereldeconomie gigantisch is. MNE stellen enorm veel mensen te werk en volgen vaak een zeer complexe strategie. 1. The MNE: Definition, Scope and Influence Wat is een MNE – multinational ( multinationaal management) Niet alle MNE zijn groot, maar de meeste grote bedrijven in de wereld zijn MNE. zijn Men is alleen een MNE als men aan deze voorwaarden voldoet: 1. Directe investeringen doen in het buitenland. MNE doet niet alleen aan export, maar is ook écht aanwezig in het buitenland. Ze voeren er directe investeringen in door vb. te produceren in het buitenland. 2. Actief met de investering bezig zijn (vb. aanwezig zijn in de RvB) 3. Geïntegreerde operaties (geen losse filliaaltjes) Dit betekent ook dat de operationele omgeving sterk verandert, de complexiteit stijgt. ekent omgeving Veel verschillende consumenten, distributiesystemen, … Ook de politieke agenda van de landen waarin we investeren speelt een belangrijke rol. Global game: men speelt wereldwijd waardoor alles complex wordt. Binnen de EU spelen de wisselkoersen geen rol meer maar daarbuiten wel, dit kan een belangrijke invloed hebben op vb. de winst. Ook organisatorisch is de omgeving complex. De meeste MNE zijn vrij recent (na WO II) uitgegroeid tot internationale spelers. In totaal zijn er wereldwijd zo’n 70 000 bedrijven van dit type. De toegevoegde waarde van grote...
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...“WHAT IS THE RELATIONSHIP BETWEEN DIVERSIFICATION AND PERFORMANCE, PARTICULARLY IN EMERGING ECONOMIES? WHAT ARE THE FACTORS WHICH ARE RELEVANT FOR SETTING THE CONTENTS OF THAT RELATIONSHIP?” By João de Almeida Frazão Caro de Sousa Master Thesis Submitted to ESADE Business School in fulfilment of the requirements for the Degree of Master of Science in International Management ESADE Business School May 2012 Master of Science in International Management – ESADE Business School i Master of Science in International Management – ESADE Business School Table of Contents Introduction ..................................................................................................................................... 1 Theoretical Background 1. Diversification ......................................................................................................................... 5 1.1 General Observations ........................................................................................................ 6 1.2 Different types of diversification strategies....................................................................... 7 1.3 The costs and benefits of diversification ........................................................................... 8 1.4 Diversification Trends ....................................................................................................... 9 A. The Lack of Significant Relationship ................................
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...Defending a Domestic Position against Global Entries Abstract The paper offers a systematic review of strategic options available to incumbents coping with threats and attacks by a global firm. The framework makes it possible to review and analyze action alternatives based on the entry stage, the attack focus and defense tactics. Even though the globalization process has exposed domestic incumbents to greater threats, incumbents’ options have also increased. The doors of trade liberalization swing both ways. Opportunities for collaboration increase while anti-globalization movements and national patriotism can be mobilized for effective defense.. The framework presented in this paper builds on existing strategic theories and concepts in addition to published case studies. It offers a flexible and dynamic approach for reviewing alternative strategies for implementation and research. Key words: Defensive strategies, Incumbents, Global threats, Global opportunities, Globalization trends. Defending a Domestic Position against Global Entries Yaron Timmor; Samuel Rabino; Jehiel Zif Introduction In the age of globalization, many domestic firms are threatened by the entry of global firms (Baker and Ballington 2002; Beardsley et al. 2002; Roberts Nelson and Morrison 2005; Thoumrungroje and Tansubaj 2004). Equipped with mega brands, know-how and economies of scales, global and multinational firms shove aside and even trample local players (Douglast, Quelch and Taylor 2004;...
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...Foreign 99 Chapter III Direct investment by China in Latin America and the Caribbean A. Introduction Since 2008, China has become one of the world’s largest sources of direct investment. These flows first reached significant levels in Latin America in 2010, when it is estimated they surpassed US$ 15 billion. Chinese companies have in fact burst on the scene in the region so recently that several of the biggest projects were still being finalized in early 2011, or had only just been put into operation. Most investments have been made in natural resource extraction, but over the medium term this is expected to diversify into other sectors such as manufacturing and infrastructure construction. Paradoxically, there is a lack of data on this extremely important phenomenon, which poses a constant problem for policymakers and analysts studying Chinese foreign direct investment (FDI). Appraisals of the possible opportunities and challenges presented by this increased investment flow therefore tend to lack supporting empirical evidence. The aim of this chapter is to make some progress on this issue, at least as far as investment in the region is concerned. A variety of sources have been consulted, including investment announcements in the media and interviews with Chinese company managers and Latin American and Caribbean government authorities. Despite the evident limitations of this kind of material in terms of data quality and reliability, this course of action does provide...
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