CASE ANALYSIS

CEMEX radically transformed the way it did business by adopting a strategy that
streamlined its processes to achieve more efficiency, as evidenced by the case.
Furthermore, by moving away from selling items and toward offering entire
solutions, the worldwide cement maker built a powerful brand name. In order to
adjust output to unexpected customer demand patterns, the corporation also made
significant investments in information and communication technologies. Finally, in
order to boost its bottom line and customer base, CEMEX embarked on an
acquisition-driven international expansion plan. The free-market approach is the
theoretical explanation of FDI that best explains CEMEX's FDI. "International
production of goods and services should be dispersed among countries according to
the theory of comparative advantage," according to this theoretical explanation.
According to the main principles of the free market view, CEMEX has put in place
measures to ensure efficient production of differentiated cement products in
countries where it chooses to expand, thereby not only achieving a lower opportunity
cost but also increasing the economic welfare of host countries. Their differentiating
are the customer service and use of information technology to forecast the demand of
cement and to build a robust network of computer hardware that allows to control the
production and distribution of cement like no other company. Cemex also paid a
huge amount of attention to its distributor who were rewarded points for meeting the
highest sales target. These point can be converted into either stocks or into
construction or manufacturing equipment which could be sold at huge discounts.

 CHARTING OF INTERNATIONAL EXPANSION

From the case study, it is clear that CEMEX had started acquiring established
cement makers in Venezuela, Colombia, Indonesia, the Philippines, Egypt and
several other countries. It bought stagnant companies in Spain and turned them
around in 1990. In 2000, Cemex purchased a Houston based southland the largest
cement manufacturer for $2.5 billion dollars. Cemex has 56 cement plants in 30
countries most of which was gained by acquisition. In 2004 Cemex made another
major foreign investment move, purchased RMC of Great Britain for $5.8 billion.
RMC was a huge multinational cement firm with sales of $8 billion, only 22% of
which was in United Kingdom, and operations in 50 countries. The RMC was
working at 70% capacity due to repetitive process but Cemex brought in team of
engineers and made the plant work at 90% capacity. Finally, due to its entry mode of
choice (acquisitions over green ventures), FDI inflows into the company's host
countries (capital and technological, management, and marketing know-how), and
strategic orientation, CEMEX clearly provides a solid foundation for discussion of
the sources of superior performance and competitiveness in international business
(efficient production, strong brand name, and investments in information and
communication technology). The CEMEX case study also shows how corporations
looking to grow