Benefits of Globalization: Cemex Essay

1. What utilitys guard CEMEX and the other globular competitors in cement derived from globalization? a great deal broadly, how can cross-border activities lead value in an exertion as apparently localised as cement? (Question for Analysis)The oligopolistic nature of the cement chore dictates the limited notion of patronage strategy, however CEMEX, one of very fewer cement producers found that by dint of globalization, a variety of arrive ats can be obtained and use to their witness. Expanding to the global grocery store was a mess in which Zombrano (CEMEX former CEO) capitalized and was adequate to add value into the industry in a variety of different utilizes. CEMEX aggressively took the take chances to expand their global exploits from the means of economical speculation during the 1980s-2000 period. with globalization they were cap adequate to establish an impressive portfolio and further upbeat from each acquisition. More importantly as a homogenous prod uct in cement, the building grocery store during the 1980s and 90s was relevant and needed in developing countries with goodish growth opportunities. This is highlighted in their endeavors with the takeover of Valanciana and Sanson in Spain (1992). Spain, a part of the MEU (Monetary European Union) highlighted investiture authorization as currency rank along with risk premium were substanti bothy low.The lower cost of capital in the merges represent further potential for backing elsewhere at affordable rates. Investments in any Country apart of the MEU could have been beneficial, however, CEMEX strategic wholey pursued developing countries with potential for economic growth. A spunk benefit of their globalization practices indulged with reducing costs and annex plant aptitude to a much greater extent. Inducing their very own Mexican based best practice into the Spanish operation CEMEX recorded yearly savings/benefits of $120million and increase in run margins from 7% to 24%. Interestingly enough, their benefits didnt reside only in change magnitude revenue or market domination, exactly further constantly developed their repertory by absorbing the comparative advantages in the different economies and markets. By tapping into the building industry in Spain, they discovered incredible efficiency in the energy program through the use of petroleum degree Celsius as the main fuel source. By 1994, a vast majority of CEMEX plants changed to petroleum coke in the own energy program. CEMEX was able to recognize globalization benefits in 1989 as Lorenzo decided hit the big market in US by export their products.Driven by profitability potentials, CEMEX to begin with dumped their cement products in the US market to win out their competitors however their products were issued a trade barrier formalized in countervailing duties of up to 51%. (Harvard excerpt). The next strategic move was to directly invest in the US market through FDI. CEMEX concentrate on avoiding traffic barriers and intelligent rapture costs thus acquired plants and facilities in Texas through FDI. This was the start to their cross border activities. The NAFTA (NORTH American FREE TRADE AGREEMENT) reduced tariff costs and furthermore by placing plants ideally close to the demand of the market, they are in like manner able save delivery time. By cutting export time guest satisfaction is increased, as a result, wherever CEMEX decides to operate, their big-boned company name and nature becomes a valuable asset in building plants in ideal locations (next to limestone fields). As a result, through FDIs, subsidies, Mergers and Acquisitions, CEMEX were able to benefit from reduced tariffs when it came to exporting their products, and furthermore eliminated hefty station costs. The elimination of trade barriers and transport costs would be carried out into all firms that CEMEX acquires.CEMEXs globalization campaign highlights robust financial benefits and hubr is within their management dust. Through constant foreign investment, they needed to build a modest management system which could be self-developed and applied in all of CEMEXs facilitations. CEMEX designed a core management system to implement in their new acquisition of firms. They implied the PMI (Project Management International) CEMEX panache which considered being a form of intrinsic benchmarking, setting a core business practices which would be conducted throughout the locations CEMEX did business. By modify their management system, firm stations were able to discover talent across the borders and employ some of the most highly happy and efficient professionals.CEMEX had a separate PMI squad congested of highly trained managers specifically to train newly acquired firm managers. Managers, employees were apt(p) a voice of opinion. Hierarchy issues lessen and all ideas were considered valuable. Employee efficiency, coherence, accessibility, collaboration, were the key behaviors of the PMI puzzle out. This created cohesion, decisions were sound, quicker and easier. CEMEX was as well always open to develop their PMI process as they would develop new technologies or advantages throughout merges with other firms. Cement as a homogenous product posed limits in enhancing performance however CEMEX intelligibly constitutes the principle of learning and continuous benefits through the punctuated PMI process in CEMEX Way.