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Case study of Business strategy - Essay Example

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In May 2000, CEMEX was preparing to expand through acquisitions in Asia, Africa, and the Middle East. What kind of global giant do you think Lorenzo Zambrano wanted the firm to become? Using module theory and evidence from the CEMEX case study, critically evaluate his…
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Case study of Business strategy
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Case study of Business strategy

Download file to see previous pages... e origins of CEMEX was traced in 1906 as Cementos Hidalgo and eventually merged with Cementos Portland Monterrey to form the Cementos Mexicanos, later renamed CEMEX, with Lorenzo Zambrano as its founder. The Lorenzo Zambrano, appointed as the CEO of contemporary CEMEX, was a direct descendant and namesake of the original founder.
From the strategies employed and implemented by Zambrano, the most critical was refocusing from the horizontal diversification to a strategy of geographic diversification within the cement business with the objective of attaining growth through acquisitions (Bartlett, Ghoshal & Beamish, 2008, p. 251). This defined Zambrano’s vision to make CEMEX an emerging global giant entrenched as a leader in the cement production and marketing.
CEMEX slowly developed its competitive advantage in the cement industry by gaining expertise with priority in its homeland, Mexico. By investing in a$1 billion merger through the acquisition of significant cement producers in Mexico (Cementos Anahuac and Cementos Tolteca); CEMEX was able to secure the market leader position in Mexico, a move which proved to be an effective strategy prior to focusing in geographic diversification through purchase of cement companies in selected international markets.
As averred by Ghemawat & Hout (2008), there are basically three significant strategies employed by global giants of the future, to wit: (1) exploiting evolving market conditions; (2) managing convergences in costs; and (3) reworking value chains (pp. 82 – 87).
CEMEX has been effective in exploiting evolving market conditions. Through the challenges met from its stance to dominate the Mexican market, despite the peso crisis and the political instability that marked years of operating in their local market, CEMEX managed to generate profit margins partly due to servicing the self-construction part which was minimally affected by the crunch. Further, during the period, CEMEX has already started to venture into ...Download file to see next pagesRead More
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