Reference no: EM131149046

What benefits have CEMEX and the other global competitors in cement derived from globalization? More broadly, how can cross-border activities add value in an industry as apparently localized as cement? CEMEX and the other global competitors certainly benefit from globalization by embarking on market diversification strategy. Another benefit of globalization to CEMEX product is the reduction of tariffs, which were associated with the exportation of their product; given that the manufacturer had a localized facility; export tariffs would not be imposed on the delivery of cement. It’s obvious that information systems have become more advanced, which allows creating competitive advantage in the distribution and delivery process. Globalization also allowed for companies to reduce their costs. For example, by placing plants in each country they have presence, they could lower delivery price. Furthermore, cross-border activities continue to add value because the cement industry is highly sensitive to changes in the GDP. In a competitive market that is more diversified, globalization help to balance out fluctuations assuming there isn’t. Another benefit of globalization is the reduction of standard deviation of quarterly cash flow margins (1994-1997 averaged 7.1% for CEMEX as a whole, compared to 9.5% for Mexico, 12% for Spain, 22% for the U.S., and 30% for Venezuela) a global recession. The benefit of globalization to company’s engagement in cross-border activities can be added value because the cement industry is highly sensitive to changes in the GDP. Another benefit of globalization depends on Cement Company’s who is able to provide cement fastest may win some jobs for this reason alone. Finally, the cement manufacturers should have seen stabilization in revenues due to diversification. How specifically has CEMEX managed to outperform its leading global competitors in the cement industry? Please focus on comparing it with Holderbank, which is the other large competitor principally focused on cement. CEMEX is a smart corporation and they have always known what to do to be in good standing. In order to outperform competitors, the company has to make acquisitions, which turned out to be successful. The company employed innovation in the sense of applying new things to their business strategy; they did not create something new but instead, it was innovative because it was new to them and to their industry. Some credit needs to be given as well to Mr. Zambrano, the CEO of the company for over 20 years, for being such a smart and talented businessperson. Since he started in the company, he invested lots of resources in Information Technology, which provided the company with a first mover advantage whenever it came to technology. The winning point for CEMEX, as opposed to Holderbank, is owed to the fact that CEMEX had an awesome geographic diversification strategy; also, it was not only a cement business but instead cement and cement-related businesses. The company applied a successful strategy of growth through acquisitions, which took them to the next level by being able to operate easier and with lower costs.