CEMEX, a multinational building materials company has exhibited a number of strengths in its report. These strengths range from operational to capital and strategic. They have indeed made it trade well in the local and international markets.
CEMEX has consolidated itself as a major supplier of building materials globally by strengthening its capital base. This follows its major acquisition in 2005 of RMC Corporation, the largest buyer of cement. This has been further solidified by the $15.3 billion majority takeover of Australia’s Rinker Group.
The unique ability to integrate acquisitions by introducing the best practices makes it reap the most of benefits arising from acquisitions. It enables it play big internationally. For instance, in 2006, CEMEX was able to deliver more than the $200 million in the synergy savings and it had expected to produce more than $380 million in savings in 2007.
CEMEX encourages technological advancements, business standardization practices. This keeps operations flexible and adaptable. It thus cannot be easily edged out of the market. It has also been known as an innovator in operations by encouraging innovations. Its evolvement from a company with 6,500 employees and $275 million in revenue to trading publicly with 65,000 employees and $21.7 billion in revenue in 2007 is commendable. It is a clear sign of a well maintained growth process. This shows it sound decisions and growth policies.
In the light of its strengths, a number of weaknesses also emerge from the case report. The major demerit arises from poor legacy operations. This challenge is posed because of drawing key people from multiple countries to form the management team. In that regard, uncovering the full potential and capabilities of the teams becomes hard.
A lot needs to be done on the branding of the cement to suit the consumer specifications and preferences. Since no much differentiation can be done, branding should be the key trait to improving sales and building loyalty for the product. Color needs are a good example. In response to the strengths and weaknesses, a number of strategies can be applied to keep CEMEX productive and profitable. From the statistics, the largest demand comes from Asia at 1259 million tons then Western Europe at 238.9. The company can decide to spur its production and sales in these regions to generate more profit.
According to Exhibit 6, developing countries are projected to consume 69-85% of cement production by 2020. Therefore more promotion and market consolidation is needed in developing countries so as to maximize on the demand.