CEMEX A Building The Global Framework 1985-2004 Case Solution

1. What are the key elements in the growth strategy of CEMEX? What benefits has CEMEX derived from its globalization strategy?

CEMEX focused on diversifying its global reach and presence to be able to compete with market leaders. For this, they had to pursue an aggressive globalization strategy. The strategy focused on national dominance and acquisitions of companies in countries which were culturally and linguistically similar to Mexico and used its knowledge of developing markets to good effect. Key to the acquisitions was the focus on implementing operational practices and the CEMEX corporate culture to the newly acquired companies. This was done with the work of a Post-Merger Integration (PMI) team that would implement the best practices of CEMEX to the new companies and facilitating the postmerger dynamics. CEMEX put a huge emphasis on improving both the newly acquired facilities while also learning from these companies to improve their practices back home in Mexico. An integral part of the organizational function being changed by CEMEX in the newly acquired companies was implanting a human resource platform and making the companies efficient and effective.

With the beginning of the second half of the 1990s, CEMEX had developed a mature globalization strategy which they constantly kept improving on based on the acquisition experiences. This included sending teams to do detailed market research, identify opportunities and perform due diligence according to standardized formulas set by CEMEX.

2. Describe the process of candidate/market selection and integration. How did CEMEX prepare for integration of acquired companies?

Before acquiring a new company in a targeted market, CEMEX teams would patiently observe the market before identifying an appropriate candidate for acquisition. The internal staff would then proceed to carry out due diligence, rigorous analyses, including sophisticated investigations into the financial situation of the potential acquisition to determine whether it would be worth investing into.

After acquisition, CEMEX would send a Post-Merger Integration (PMI) team of the best operational, accounting, procurement, legal and sales personnel to perform analyses on how to improve the business processes as quickly as possible. This practice was known as “gap analysis” and the team looked for “quick hits” to rapidly improve performance.