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Economies of Scale Manufacture closer to point of use to reduce the logistic cost Avoid Import tax by producing the local country Reduce the risk of political and economic crisis Reduce risk of dependency on single market 2. How specifically has CEMEX managed to outperform its leading global competitors in the cement industry?
Stock Profitability - 3. How do the markets it has entered recently compare with the markets that it entered early on?
Based on boston consulting advise they went for regional expansion. In particular, what kinds of countries should it focus its future expansion on? The cement industry and its players made first steps in the direction to Global integration only in the s. It could be seen as somewhat paradoxical, because if we apply the matrix of Global Integration and Local Responsiveness pressures to the cement industry, we can clearly identify that the industry scores high on most of the factors that should have pushed it to globalization much earlier.
These factors include large investment intensity, technology intensity in production, pressures for cost reduction, universal needs, presence of multinational competitors, and access to localized resources.
Since cement itself was, and mostly remains, not an export-driven business, because it was expensive to transport, there had to be other drivers for globalization of the industry.
Indeed, the emergence of MNCs in the cement industry was caused by significant progress in the development of the supportive functions underlying the industry as a whole, such as telecommunications, information technology, capital markets, knowledge management.
Analysis of the factors of Local Responsiveness shows us that the cement industry generally does not have high pressures for localizing their product. These pressures are medium at the most. Even though there can be some noticeable differences in consumer demands from developed and emerging markets, e.
Every plant may have their production processes optimized for local preferences, if necessary. However, the aggregation in CEMEX had a significant twist, when the economies of scale were achieved not by simple centralization of production and development, but rather by efficient management of its global knowledge base.
The cornerstone of the CEMEX Way corporate philosophy was transfer and standardization of best practices throughout the company. One of the most notable examples of t his learning attitude was the application of the PMI process to Mexican operations in after a spree of foreign acquisitions in Europe and Latin America.
Cemex distributor Puerto Aventuras, Mexico The success of the company coming from the developing market and becoming one of the three global giants in the industry is a powerful testimony to the appropriateness of their corporate philosophy, known as CEMEX way. This will allow the company to stay relevant and keep its competitive edge in the ever-changing global economy.Pressures for local responsiveness also arise from differences in infrastructure or traditional practices among countries, For example, in the wireless telecommunications industry, The appropriateness of each strategy varies with the extent of pressures for cost reductions and local responsiveness.
A telecommunications firm is working on the next generation of switching equipment that allows calls to be digitally transmitted from sender to receiver.
A localization strategy is most appropriate in an industry in which pressures for cost reductions are _____ and pressures for local responsiveness are _____. What strategy should a.
Cost accounting is described as the evaluating approach to the overall cost of when the business evaluates the cost that is associated with the business. Cost accounting consists of the identification, measurement, collection, analysis, preparation, and communication of financial information (Khan, ).
We weren't able to detect the audio language on your flashcards. Please select the correct language below. SESSION 2 “The Globalization of Cemex”. MATERIALS Case: HBS 9‐‐ The Globalization of CEMEX Additional material: Exhibits 4‐8 1.
What benefits have CEMEX and. Analysis of the factors of Local Responsiveness shows us that the cement industry generally does not have high pressures for localizing their product. there is no additional cost of changing production processes within one plant in order to produce different specifications.
if at all.