case of CEMEX
Globalization has given many benefits to CEMEX and its competitors. First of all, it reduced the tariffs of product exportation by acquiring local plants and facilities instead. By doing so, these cement companies could control the localized quarries, which give them the proximity to the raw material needed for cement production. No need to ship the goods across the border, therefore no tariffs on the delivery.
On the other hand, as they acquired the local plants and built distribution terminals, these companies have gained a competitive advantage of transportation cost. If they choose to export, the cost of transportation may cost them a …show more content…
This diversification has enabled the company to be less dependent on the market of their own.
4. What recommendations would you make to CEMEX regarding its globalization strategy going forward? In particular, what kinds of countries should it focus its future expansion on?
As mentioned in the case, CEMEX is really interested in entering the market of China, India and Brazil in the near future. And due to the factors that may have impacts on the cement demand, the three countries on their list seem to be perfect candidates. All the three countries are having a high GDP growth, a high population density (especially in India and Eastern China), and a pleasant climate respectively, the factors together have made these countries large consumers of cement. These markets are totally different from the ones they set foot in, and are less associated with their home market, so by entering these countries, they could do better in avoiding market risks. And on the other hand, this could also be the obstruction of entering these markets. The societies, cultures and conventions in these countries are quite another thing to them. So, before taking actions to invest in these new markets, CEMEX should make an effort to learn these regions, and then they could know how to best fulfill the demand of local customer. In my opinion, Brazil should be the first to put