Cemex Case Study Research
Introduction:
CEMEX which is one of the largest cement producers in the world was founded in 1906 by Lorenzo Zambrano Gutierrez near Monterrey in Northern Mexico. It was initially named as Cementos Hidalgo. CEMEX remained a domestic company till 1960. During this period it acquired company called Cementos Portland Monterrey and merged with Cementos Mexicanos. In 1982 when the economic crisis hit Mexico, the government was forced to liberalize its economy which allowed CEMEX to attract foreign investment.
Strategic Options:
Based on the information provided in the case, CEMEX had two strategic options for moving forward. In 2004 CEMEX had to decide on two options. Should the company concentrate on continuing Mergers and Acquisitions as the cement industry was heating up, or should they focus on the growth of their business in which they had invested. In the first option if they continue to focus on mergers and acquisitions, they will have to target their market in developed countries where most of the competitors have their large percentage of the market share. Also there was a need for M&A because the cement industry was going up day by day, and in order to maintain the pace, M&A was required. The second option was to focus on the growth of their current business. CEMEX had a lot of debt because of its expansion. So the goal was to focus in their current business and help the company reduce its debt through efficient growth. Environmental factors: There are several environmental factors which can affect and help CEMEX from growing. Considering the Political and Legal Environment factor, CEMEX has faced a lot of governmental regulations in the past. In the U.S., a law suit was filed against CEMEX for an issue concerning an anti-dumping process to protect America’s domestic companies from the cement products that CEMEX was producing. This helps CEMEX to be more cautious in the international market in regard of their products and the prices they
CEMEX which is one of the largest cement producers in the world was founded in 1906 by Lorenzo Zambrano Gutierrez near Monterrey in Northern Mexico. It was initially named as Cementos Hidalgo. CEMEX remained a domestic company till 1960. During this period it acquired company called Cementos Portland Monterrey and merged with Cementos Mexicanos. In 1982 when the economic crisis hit Mexico, the government was forced to liberalize its economy which allowed CEMEX to attract foreign investment.
Strategic Options:
Based on the information provided in the case, CEMEX had two strategic options for moving forward. In 2004 CEMEX had to decide on two options. Should the company concentrate on continuing Mergers and Acquisitions as the cement industry was heating up, or should they focus on the growth of their business in which they had invested. In the first option if they continue to focus on mergers and acquisitions, they will have to target their market in developed countries where most of the competitors have their large percentage of the market share. Also there was a need for M&A because the cement industry was going up day by day, and in order to maintain the pace, M&A was required. The second option was to focus on the growth of their current business. CEMEX had a lot of debt because of its expansion. So the goal was to focus in their current business and help the company reduce its debt through efficient growth. Environmental factors: There are several environmental factors which can affect and help CEMEX from growing. Considering the Political and Legal Environment factor, CEMEX has faced a lot of governmental regulations in the past. In the U.S., a law suit was filed against CEMEX for an issue concerning an anti-dumping process to protect America’s domestic companies from the cement products that CEMEX was producing. This helps CEMEX to be more cautious in the international market in regard of their products and the prices they