Strategic Analysis of Cemex Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Competitor Analysis

It was very necessary to analyze the competitors in order to plan more effective marketing strategy. There were many cement manufacturing players which were dominantly captured different regions.

Cemex had acquired 15 companies internationally in different regions. Every acquisition helped it to enter that specific country. Initially it was a local Mexican cement maker but later to diversify the risk; it expanded the business geographically through the several regions. Cemex was considering to lessen its dependency on the Mexican market and to internationalize its product.

Since there were many rivals for Cemex, it was considering to strong its position for which it acquired two local cement manufacturing companies. After this acquisition, Cemex had now Mexico's 60 percent market share and was listed as top 10 world's cement manufacturing companies. Then to enter the European countries, it focused its attention on Spain and acquired two biggest cement producers.

Later in 1990s, American companies started to diversify with reducing investment from cement industry to other businesses. This diversification created a gap in the US market which was an opportunity for the foreign rivals. There was now a shortage in the American market and definitely Cemex had to enter to buy US assets.

At the same time, Mexican based Cemex was expanding its business to the Latin America through different acquisitions, where it faced competition from Lefarge and Holcim. As like its leading competitors which had focused on developed countries, Cemex had limited in developed countries.

The sudden takeover of US based Southdown Incorporation in USD 2.6 billion made the Mexican based Cemex which is a leading cement manufacturer in North American region. Southdown was merged in 2001 with the existing business and created Cemex Incorporation which contributed over 30 percent of total revenue of parent company. Takeover of Southdown was Mexican based Cemex's first step towards becoming 'Global Latina'.

Current Strategy:

Traditionally Cemex had focused on high margin product cement and had further exposure to ready-mix concrete especially for the market of Mexico. It had already acquired many companies during its local expansion. All the companies which were acquired by Cemex, had been changed by the name of Cemex except for the well established brand manufacturer. The name of Cemex was added in small in its logo. It entered the potential market with high growth which was mostly emerging markets. Obviously working in emerging markets had many benefits. Cemex would be enjoying low rate of urbanization and high growth rate. It would lead to high development residential constructions and infrastructure which would result in high consumption of cement. Emerging market could be more beneficial relatively with the developed market. In developed market, players had been already captured the market share and it would be difficult to pull it until in the case of merger or acquisition. Even in the case of M&A, Cemex would be able to share the market share with the partner company but still since the market had already been developed, it would not be resulting in high cement consumption as it could be in the case of emerging market. It was the reason behind the entering of Cemex mostly in the emerging market like Asia and North Africa.

Cemex had an opportunity to enter the Asian and Middle East market either through merging or acquiring the local body. The market of Afghanistan had been the biggest opportunity for Cemex because it was an emerging economy and it was developing in the last ten years but it did not target that market which was then targeted by the Indian and other cement manufacturer players.

Opportunities:

Cemex had an opportunity to cater the emerging market like Asian and Middle East which had 77 percent of the world's market size.
Urbanization of currently emerging markets.
It had an opportunity to operate the production mostly in Asian countries like Indonesia, India and others, where cost of production was very low relatively with other developed countries.
Concentrate mainly on cement and aggregates which had consisted of major portion of construction.
Mexico was recorded a housing deficit of 4.3 million units in 2000, which were growing up to speed of 1.1 million per year.
The ratio of adult group between 30 and 59 would grow up to 50 percent till 2030 which would increase the demand of house leading to more consumption of cement.
United States had been agreed with Mexico to gradually reduce import tariff from US $26 per ton down to US $3 per ton in 2009.
The Zapatero Administration which is a Spanish public fund announced the fund of US $8 billion to the Spanish development in the areas of infrastructure construction and public works................................

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