Cemex Case Study

1779 Words 8 Pages

In 1906, a small local cement company established in northern Mexico, it called CEMEX. But, today, almost 100 years later they became the third largest cement company in the world, and a largest international trader. After numbers of acquisitions, CEMEX had 15 billion US dollars of turnover and operated cement plants in 15 countries, having 50,000 employees worldwide. (CEMEX Company Profile | CEMEX UK, 2017) What have happened in these hundred years? It can be talked from the 7 countries that CEMEX selected for its marketing.
First, its home country, Mexico, CEMEX’s had 64.6% of capacity shares due to the acquisition with Mexico’s largest cement producer in 1987; in 1992, it acquired two largest cement plants in Spain, so
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Then, by purchasing two cement plants in Spain, 68% equality of Valenciana and 94% equality of Sanson, CEMEX occupied 28% of cement market in Europe and also expand Company’s international image. And now, CEMEX is selling cement in almost 50 countries.
CEMEX has very complete and specific standardized on expansion process, including opportunities discovered, comprehensive investigated, event integrated after acquisition.
Besides, when it turns to management, one of the special parts is they have a team name PMI, their mission is helping newly acquired companies get used to the standard and business culture of Cemex; the other one is their IT, it changes greatly in CEMEX’s operation way. For example, they exploit a global positioning system can keep truck drivers, customers and goods despatchers in touch at any time, to ensure that customers can get their goods in 20 minutes rather than three hours they used to be.
Moreover, their brand equity is stable and be trusted by long – term relationship customers. They also discovered a new target group: a construction team that prefer buying cement in a package through retailers, and this demand especially happen more in emerging
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2.2 Five Porter's analysis

Bargaining power of buyers
Cement industry is an undifferentiated marketing. And mainly buyers of CEMEX are government agencies and construction companies who dedicated to infrastructure projects; individual buyers are informal sectors in this industry.
Bargaining power of suppliers:
CEMEX achieves vertical integration and complete supply chain, even have their own raw material quarries that located close by their production facilities.
Threat of new entrants:
Cement industry is a high initial investment. But some construction companies who want to start using vertical integrated strategy might enter this industry.
Threat of substitute products or services:
Due to rainfall, some places or countries would like to use woods or steal instead of cement.
Intensity of competitive rivalry:
CEMEX have local and international competitors, especially, five major international competitors had clearly identifiable national origins and controlled a significant share of their home market. Those are Holderbank, Lafarge, Heidelberger, Italcementi and Blue

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