New Technology and Investing in Innovation for CEMEX Capsim - Case Study Example

CEMEX Capsim Name: Course: Tutor: Date: Table of Contents Table of Contents 2 1.0 Executive Summary 3 2.0 Introduction 4 3.0 Report’s Body 4 3.1 Adopting the new technology and investing in innovation 4 3.2 Development and improving on the operating environment 5 3.3 Customer sustainability 6 3.4 Training and development 7 4.0 Results 7 5.0 Conclusion 9 CEMEX Capsim What does it take to grow a business at double digit growth over many year 1.0 Executive Summary CEMEX is one of the largest cement manufacturing companies in the world. The growth of the business or company is significant because it will help the company outperform its competitors in the market (Davila, et al. 2006, p. 83). The double growth digit expected by the company is possible but, it will take long time. There are several path ways that the company can adopt to achieve its growth in the market. The path ways to growth is critical because they should be implemented fully in order to achieve its goals and objectives (Sanidas, 2005, P. 111). This can be achieved by keeping the company’s existing customers by providing quality services to customers. This will; help the company dominate in the market and outperform its competitors (Bragg & Bragg, 2005, p. 121). In addition, the company should know the industry operating environment and developments that are anticipated in the market. It should venture into new industries and utilize the available opportunities in the neighboring market. This is possible because of its capabilities and ability in the available resources (Sanidas, 2005, P. 113). The company should adopt these growth pathways especially by investing more in technology and innovation because it will increase revenues. I recommend that the company should manage its resources effectively and efficiently so that it can satisfy its customers and other stakeholders in the market (Bessant & Tidd, 2007, p. 54). 2.0 Introduction The board of directors of CEMEX has the powers to ensure the company achieve its goals and objectives especially the double digit growth over the years. The profits and proper management of resources effectively will help the company increase its sales; hence, expansion. Growth or expansion can be achieved only if the sales increase leading to increased profits that can be used to determine its growth (Bragg & Bragg, 2005, p. 124). The company can gain competitive advantage irrespective of the economic challenges by sticking to the objectives and goals set. These are the most efficient ways of ensuring double digit growth. The board of directors of the company should ensure the company achieve the double digit growth because it will improve the image and reputation of the company; hence, helping outperform the competitors in the industry (Clegg, 1999, p. 72). 3.0 Report’s Body 3.1 Adopting the new technology and investing in innovation Technology and innovation is crucial for the company’s growth and expansion in the market. Innovation and research will help the company improve the quality of products to be offered to customers (Sanidas, 2005, P. 114). This will ensure increased sales; hence, profitability that will ensure there is growth or expansion. Customers are sensitive about the quality of the products because of the competition that can be experienced in the market. For this to be achieved, Total Quality Management (TQM) theory should be adopted in the company (Davila, et al. 2006, p. 85). The board of directors should ensure employees are trained on how to maintain and manufacture quality products in order to attract more customers and to penetrate into new markets. TQM is crucial because it will help the company outperform its competitors in the market. CEMEX can ensure its growth target is achieved including getting more than $ 2.6 billion annually. This has been possible because in 1995, the total sales were $ 1.5 billion; however, in 2006, it is almost $ 3 billion, meaning there is an increment (Bessant & Tidd, 2007, p. 56). 3.2 Development and improving on the operating environment For the company to achieve its goals and objectives especially the double digit growth, it should develop products and ensure the business operating environment is conducive for business operation. Operating environment will help the company’s staff motivated and achieve their targets within the planned time. This means that every person has the responsibility of maintaining the required standards in the company especially in the improvement of sales volumes and expanding into new markets (Bragg & Bragg, 2005, p. 126). Therefore, the company can achieve the double digit growth without straining because of proper guidelines and procedures. Research on new ways of management is crucial especially to the top management in running the company. CEMEX require research and development on new approaches and ways of manufacturing the products that meet market requirements and customer satisfaction. The double growth expected in the company will be achieved if these factors are included in the management of the organization (Clegg, 1999, p. 73). 3.3 Customer sustainability Customers determine the success or failure of the company in the market. Customers will help the company achieve the double-digit growth if they are satisfied with the products and services. This means that customers should be respected and served with dignity and respect so that it can achieve the double digit growth. The double digit growth will ensure the company dominate in the market and outperform its competitors (Davila, et al. 2006, p. 86). However, this will not be possible if the customers are not allowed to give their views and opinions on what they want. Market research and analysis is core if the company wants to achieve its goal and objective of double digit growth. CEMEX Company has qualified employees who can move the company from single digit to double digit growth (Sanidas, 2005, P. 116). Therefore, the employees of the company should be vetted well depending on the experience, academic, and professional qualifications. Committed and dedicated employees are unique assets of the company in the achievement of the double digit growth and expansion. To improve the skills and knowledge of employees, they should be trained and developed regularly in order to enhance their effectiveness and efficiency in the company (Clegg, 1999, p. 75). 3.4 Training and development Training employees will ensure they get the required skills and competencies needed to perform their duties and obligations. There are many factors that should be considered in training and improvement of employees competencies should be done by qualified trainers and instructors. If customers are not satisfied with the products of the company, they will look for the company’s competitors in the industry; hence, the company can lose a lot in terms of sales and profitability. If customers reduce, the sales level will reduce profitability; hence, difficult to achieve the double digit growth (Bessant & Tidd, 2007, p. 57). Expanding the operations to other countries and regions are indispensable to the company because it will help the company utilize the available opportunities. The opportunities that are available will help the company get new customers where the competitors have not ventured into. The new opportunities are critical because it will help the company attain the double digit growth (Bragg & Bragg, 2005, p. 128). 4.0 Results The findings show that, the innovative strategies, TQM, and training conducted by CEMEX Company have ensured it achieve the double digit growth in the industry. This is because it improves the economic performance of the company and customer satisfaction in the market (Sanidas, 2005, P. 116). This can be proven by the line graphs and other financial information provided. The company’s growth has been improving significantly from single to double digit number growth. The expected size growth of the company is 10.3% from the current 9% (Davila, et al. 2006, p. 87). The board of directors should ensure the customers are satisfied in order to achieve the double digit growth. According to the graphs above, it shows that the performance of the company can be improved within the time (Bessant & Tidd, 2007, p. 59). The steady improvement of the company’s performance in terms of sales and profitability is an indication that it will achieve a double digit growth in the market. The positioning in the market has improved by 29%, prices by 19%, and MTBF by 43%; hence, the general growth will automatically switch to the double digit. This is shown by the graph below (Clegg, 1999, p. 76). When there is increasing customer growth rate of the company, the growth of the company will improve significantly. The customer growth rate contributes to the double-digit growth expected by the company in the future. The customers are grouped in 5 segments (Sanidas, 2005, P. 117). The most growing and essential round of capstone depend on the Capstone courier. These five segments include size, performance, high end, low end, and traditional. Because of improvement and growth in the market, there are many factors that contribute to this growth. The performance rate is the highest with 19.8%, size rate 18.3%, high-end rate 16.2%, low end 11.7%, and finally traditional segment rate is 9.2% (Davila, et al. 2006, p. 88). The pie chart above shows how the market of CEMEX Company is growing rapidly and expanding to other countries such as Mexico, United States of America, United Kingdom, and the rest of the world. Mexico’s market share is 32%, USA 27%, Spain 13%, United Kingdom 16%, the rest of Europe 9%, and finally the rest of the world is 3% Clegg, 1999, p. 76). 5.0 Conclusion From the above explanation and operations of the company, the double digit growth rate is possible. The company should implement the strategies and approaches provided so that the objective is achieved within the required time. This means that the double digit growth is possible over many years if proper strategies are adopted. No matter the economic climate and changes that are expected. Customer’s satisfaction should be the focus of CEMEX Company. This is possible if it wants to attain the double digit growth rate (Davila, et al. 2006, p. 89). The company has been achieving this and can maintain it for many years. Employees of the company should be trained and developed so that they can improve the performance of the company. This is a prerequisite that is indispensable in achieving the double digit growth. Training employees will ensure effective and efficient management of the company’s resources. In addition, CEMEX Company should utilize or adopt the new technology so that the quality of products can be maintained continuously (Bragg & Bragg, 2005, p. 129). Quality of products is crucial because it will help the organization maintain or improve its double digit growth in the industry. Customers should be prioritized because they will maintain the required standards and customer loyalty to the organization (Sanidas, 2005, P. 118). Venturing into new markets is important because the competitors it increase the volume of sales and the number of customers in the market. Furthermore, strong management and leadership is essential for the attainment of the double digit growth in the market because they will guide the other employees and stakeholders in the market. Innovation and creativity will sustain the company in the market towards the vision and discipline growth of the company. Innovation will ensure customers get the goods and service they require with the right features (Clegg, 1999, p. 79). References: Bessant, J. & Tidd, J. 2007. Innovation and Entrepreneurship; Chichester. New York: John Wiley & Sons Ltd. pp. 54-59. Bragg, A. & Bragg, M. 2005. Developing new business ideas – a step-by-step guide to creating new business ideas worth backing. London: Pearson Education Limited. Pp. 121-128. Clegg, B. 1999. Creativity and Innovation for Managers. Melbourne: Butterworth-Heinemann. Pp. 72-79. Davila, T; Epstein, M. J. & Shelton, R. 2006. Making Innovation Work – How to manage it, measures it, and profit from it. Upper Saddle River: Wharton School Publishing. Pp. 83- 89. Sanidas, E. 2005. Organizational Innovations and Economic Growth – organosis and growth of rims, sectors and countries. Northampton: Edwar Elgar Publishing Limited. Pp. 111-118. Read More