By

Bharathwaj Mohan
LT 7A

Company Background

CEMEX is founded in 1906 with the opening of the Cementos Hidalgo plant
in northern Mexico.
Annual sales US$ 5.14 billion, Production Capacity 96M tons
One of the leaders in each of our core businesses:
cement, aggregates, and ready-mix concrete
Presence in more than 50 countries across the Americas, Europe, Africa,
the Middle East and Asia
Trade relationships in more than 100 nations and one of the worlds top
traders of cement and clinker
Product Background
Cement was made by adding crushed volcanic ash to lime and was later
called a "pozzolanic" cement

www.cemex.com

Target Market

Informal

For
mal

Revenue
per
customer

Formal consists of large scale customers, middle and upper income

individuals. (40% of total population)
Informal consists of do it yourself homebuilders and low income
individuals (60% of population)

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Strategic Group Data

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PEST Factors
Political
Government controls the price of the cement.
The consumption of cement for infrastructure projects like buildings and roads.

Economic
Currently there is boom in the industry.
Favorable for the export segment of the industry as the number of infrastructure projects across nations
is increasing.

Social
Cement is the basic ingredient for construction of house which reflects the social status of an individual.
Cement industry has both organized and unorganized sector.

Technological
From mining to storage, the process is highly dependant on technology.
Decrease the thermal energy consumption, electrical energy consumption, cost of production of cement
and energy cost.

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5 Forces of Industry/Strategic Group

Threat of New
Entrants (High)

Bargaining
Power of
Suppliers (Low)

Among existing
players

Bargaining Power
of Buyer (Low)

Threat of
Substitute
products (Low)

Conclusion: Overall, the industry is attractive.

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Strategic Maps 1

CM

Holcim
Lafarge

Delivery M

L
L

Brand Equity
Conclusion: CEMEX has a better delivery but their brand equity is medium.
Market share depends more on brand equity.
www.cemex.com

Strategic Maps 2

H
Holcim

CM

Lafarge

Fineness M

L
L

Customer Retention
Conclusion: Finer cement is easier for construction and hence customers prefer
brands with finer cement quality.

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Strategic Maps 3

Holcim

CM

Lafarge

Packaging M

L
L

Strategic Acquisitions
Conclusion: Good packaging of cement helps reduce wastage while transportation
and plays an important role.
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Key & Threshold Success Factors

Brand Equity
In the case of cement, the brand recognition is important as it influences the decision of the buyer. The quality is
the same for any brand and obviously people buy the known brand.

Delivery
The speed and efficiency of delivery to the customer plays a crucial role as people prefer to have quick delivery.

Packaging
The packaging material is usually paper or polyethane bags. The bag quality is very important as they are stored
in the open and moisture is harmful to cement.

Customer Retention
Customers includes big real estate builders who order in bulk. Their demand for cement is constant as they keep
constructing buildings.

Fineness of cement
Finer cement is preferred by the masons as it is easier to mix with water and sand to make concrete.

Strategic Acquisitions
It does not directly influence the decision of the customers buying pattern but helps capturing new markets .

Price
Price of cement is fixed by the government and companies take advantage of efficient supply chain to reduce
costs.

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Competitive Matrix

Conclusion: The customers prefer a brand based on brand equity and Delivery
capability and Price is a threshold as it is fixed by the government.

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Triangle Model
Key Success Factors

Vision/Mission

Brand Equity
Delivery

Strategic
Competencies

Packaging

High Production Capacity

Efficient distribution
network

Customer Retention
Fineness of Cement

Lean Management

Strategic Acquisitions
Price

Value Proposition
Premium service offerings
Patrimonio Hoy program
Timely delivery of cement
Maximizing overall performance
www.cemex.com

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Mission/Vision/Values of CEMEX

Mission Statement:
Our mission is to serve the global building needs of our customers and build value for our stakeholders
by becoming the world's most efficient and profitable building materials company.

Vision Statement:
We at the CEMEX Shared Service Center know about ourselves, that we are a knowledge based value
added services provider, delivering our product portfolio above industry level benchmark achieving
customer and employee engagement.

Values
Collaboration
We work with others in a collective pursuit of excellence. Collaboration is at the core of all our
relationships. We collaborate with customers, colleagues, suppliers, and other partners in order to
reach common goals.
Integrity
We act with honesty, responsibility, and respect towards all the people and organizations with which we
interact.
Leadership
We aim to be leaders not only in the building materials industry, but also in all of our relationships. We
are a company with a sound vision for the future based on sustainability, excellence, and innovation.

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Ladder Model

Resources:
- Product
- People
- Capital
- Knowledg
e
- Technolog
y
- Suppliers

Competencies:
- Strong supply
chain
- Well
distributed
network
- Volume Sales
- Well located
shops
- Technology
- Cost Culture
- Product Mix
- Timely
delivery
- Consistent
production

Incompetency

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Strategic
Competencies:
- Strong supply
chain
- Well distributed
network
- Volume Sales
- Technology
- Cost Culture
- Product Mix
- Consistent
production

Peripheral
Competencies:
- Well located
shops
- Timely delivery

Distinctive
Competencies
- Strong
supply chain
- Well
distributed
network
- Technology
- Cost culture
- Product Mix

Threshold
Competencies:
- Volume Sales
- Consistent
production

Sustainable
Competitive
advantage:
- Strong Supply
chain
- Cost culture
- Product Mix

Competitive
advantage:
- Technology
- Well distributed
network

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Long Term Objectives

Overall, CEMEX has identified close to US$500 million in recurrent

annualized cost reductions.

Some of the cost reduction initiatives include budget cutbacks, capacity
closures, and headcount reductions.
Continue to re-evaluate all of the processes and procedures of the
business, on a global basis, with a view towards achieving significant overall
cost-reduction and appropriate rightsizing of the business.

Stepping
Out

Growing
Up

Stepping
Up

Groundwork for
Internationalization

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New Triangle Model

Key Success Factors

Vision/Mission

Substitute for limestone

Use of alternative fuels

Strategic
Competencies

Packaging

High Production Capacity

Efficient distribution
network

Brand Equity
Delivery

Lean & Agile Management

Customer Retention
Price

Value Proposition
Premium service offerings
Lessen the houseless people
Timely delivery of Cement
Maximizing overall performance
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New Matrix

Weightage

Cemex

Holcim
Ltd

Substitute for limestone

25%

Alternative fuels

15%

Packaging

15%

Brand Equity

15%

Delivery

10%

Customer Retention

10%

Price

10%

Total scores

100%

7.35

7.65

7.05

Market Share

100%

17%

30%

24%

Key Success Factors

Lafarge
S.A

Conclusion: Limestone which is the raw material and Coal which is fuel used for firing
is a non renewable resource and hence there will be a need to find a vastly available
substitute to meet the future demand once the deposits are exploited.
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SWOT Generation of Strategic Options

Strength
S1 Brand Image/Loyalty
S2 Quick Delivery
S3 Dominant position local
market
S4 High R&D Investments

Weakness
W1 Lack of identifying proper partners
W2 Resource constraint in International
Division.
W3 Poor International brand name.

Opportunities
O1 Globalization
O2 First time
Constructors
O3 Better Marketing in
Emerging Markets

Strategic Options
S1 O2 Better Branding
S2 O3 Increased customer

Strategic Option
W1 O3 Choose international
partners carefully.

Threats
T1 Rivalry with small
cement producers
T2 Competition from
new entrants
T3 Changing Customer
Demands

Strategic Option
S4 T3 Product Innovations
S3 T2 Acquisitions

SWOT Analysis

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base.

Strategic Options
W2 T1 Alternative raw material
W3 T2 Better Service

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Options Filter
Alignment
Organizatio
with
VP
nal
Total
Mission/Visio
30% Capability
Score
n/Values
30%
10%

Strategic
Options

LTO
30%

Better Branding
Increased
Customer base
Product
Innovations
Strategic
acquisitions
Alternate Raw
Materials

7.7

7.8

7.7

7.7

6.1

Better Service

7.4

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Short & Long Term Recommendations

on core business of cement, aggregates and ready-mix concrete

customers with the best value proposition
inancial flexibility
e operational efficiency
ustainable development

Find an alternate source of raw material as limestone is non renewable.

Use of alternate source of fuel apart from coal for firing purpose.
Lean management technique to eliminate waste and improve process.
Innovative way of delivering cement to the poor who are potential
customers.

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BIG- B Framework
This Model is based in 3 objectives and focuses on 7 action oriented priorities:
Enhance Value Creation
Lead in Sustainable Construction
Low Income Housing & Infrastructure
Manage Footprint

Enhance our Carbon Strategy

Excellence in Environmental &
Biodiversity Management

Engage Stakeholders

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High Priority to Health & Safety

Strengthen local communities
Partnership with Key Stakeholders

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Sources

www.cemex.com
http://www.dominicantoday.com/dr/economy/2010/7/7/36244/print
http://www.managementexchange.com/story/shift-changes-way-cemex-work
s

http://www.crisil.com/Ratings/SectorMethodology/MethodologyDocs/CRISIL-R
atings-crieria-cement-industry_2007.pdf

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www.cemex.com

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