Cemex Case Study - Coursework Example

In terms of markets, the developing countries of China and India may be seen as some of most important due to large scale cement consumption and production fuelled by large scale economic growth (OECD 2010, 2009). It may be expected that in future years as wealth becomes higher per capita in these markets, that demand begins to fall to levels seen in the developed world. In addition, the nature of products consumed in developing markets also varies from those of the developed world. Here there is a preference for pre-bagged building materials as opposed to bulk delivery, a trend which is reversed in developed markets. 2. In terms of global capacity, Cemex ranks as third with a capacity of 64.

7 million tons, this compares to market leader Lafarge’s capacity of 108 million tons and Taiheiyo in sixth place at 37.9 million tons. Despite the capacity of the company, Cemex ranks as number one by market share in 9 of its key 13 markets and second in anther three. As such, Cemex’s overall capacity lags behind the total demand for the company’s products making the company a global sourcer. . This however, may be seen as linked to the unique characteristics of such markets which have a propensity to favour local or national producers over the large international players such as Cemex.

As such, despite being a global player, Cemex may still be seen as lacking a substantial presence in key regional markets in both Asia and Africa. 3. Overall, it would appear that Cemex after the current round of acquisitions is now a “broad” player within the market for building products, while the firm had previously focused on cement (Jobber, 2007). Recent acquisitions has seen the company moving into both the aggregates and ready mixed concrete market. With regards to Cemex’s generic strategy, it would appear that the company follows a cost leadership model (Porter, 2004).

This can be seen in the so called “Cemex way” in which on making an acquisition the company attempts to implement a two way process of rationalisation taking the best and most cost effective practises from both the parent company and the acquisitioned company and then implementing the most cost effective. There is however, one area in which Cemex may be seen as developing a differentiated strategy. In the market for bagged cements, Cemex was the first producer to developed a “branded” option, thus making the product more attractive in the lucrative home build market segment.

In addition, the company also makes small local changes to the produce based upon customer perceptions of quality. For instance while the Egyptian market shows a preference for darker colours cements, Cemex’s home markets in South America require a lighter coloured product. Despite this attempt to differentiate the product, it would appear that the market as a whole is