ht t ps://www.chegg.

com/homework-help/quest ions-and-answers/could-someone-please-he
lp-answer-quest ions-chapt er-6-corporat e-level-st rat egy-chapt er-7-ac-q29906360

Question
Could someone please help me answer t hese quest ions,

CHAPTER 6
CORPORATE-LEVEL STRATEGY

CHAPTER 7
ACQUISITION AND RESTRUCTURING STRATEGIES

MITSloan Management

CEMEX: Globalizat ion “t he CEMEX way”

Donald R. Lessard and Cat e Reavis

1. As we read in Chapt ers 6 &7, mergers & acquisit ions are a major form of corporat e
diversificat ion st rat egy. Using t he lect ure slides on Chapt er 7, identify and discuss the top
three reasons why most (50-60%) of acquisit ions fail t o creat e shareholder value.

2. What are t he five major component s of “CEMEX Way” and why has t his approach been so
successful in post -acquisit ion int egrat ion?

3. In your opinion, what can ot her companies learn from t he “CEMEX Way” as a benchmark
    for acquisit ion management ?

Answer
Answer 1) The t op t hree reasons why most of acquisit ions fail t o creat e shareholder value:

-> Issue wit h t he employee and human resource issues: Most of t he acquirers fail t o
underst and t he work cult ure of t he people who used t o work t here and will work t here
furt her t oo. This leads t o unsat isfied employee and increase t he work t ension.Which
ult imat ely result s in no job securit y and more people leaving t he firm.

-> Wrongly valuing t he asset s: Anot her of t he biggest mist ake by t he acquirers is t hat t hey
over-value t he asset s or t he t arget t o t ransact ion. They pay more for what t hey are get t ing
or aiming for and t hey end up loosing t he profit and what t hey had acquired.

-> Incomplet e int egrat ion: Undert aking an aquisit ion can be long t erm and t ime consuming
process. When t he acquiring is closed every employee get s back t o t heir normal job and t he
process of post -acuisit ion slows down and ult imat ely fails.

Five Component of CEMEX way:

1) St andardized business process.

2) St andardized t echnology.

3) Maint ain organizat ional st ruct ure across all t he count ries.

4) Grant count ries cert ain operat ional flexibilit y

5) Enable t o operat e somewhat locally t oo.

This approach has been successful in post acquisit ion int egrat ion because it offers an
effect ive package t o make t he best out of any merger/acquisit ion by st andardizing t he
process and t echnologies everywhere and st ill offering some flexibilit y t o t ake decision as
per t he sit uat ion in t heir region or count ry, which also eliminat es t he possibilit y of limit at ion
of st andardizing t he processes.

In my opinion ot her companies can learn a great deal for acquisit ion management from
CEMEX way. This will be for surely t heir process of post acquisit ion where t hey st andardize
t heir processes everywhere but being so st rict and process orient ed t hey st ill offer t he
flexibilit y t o deal wit h any sudden sit ut at ion for a specific locat ion or somet hing. They know
t heir t arget s, t heir process and how t o build a work cult ure.