Taking a Mexican Company Global-The CEMEX Way SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Taking a Mexican Company Global-The CEMEX Way
Suitable for MBA, Executive MBA, GEMBA, and executive education programs, this case uses CEMEX, a global cement producer based in Mexico, to set the stage for unfolding an analysis of a growth through acquisition strategy. It offers a discussion about the firm's overall strategy to acquire on a global scale instead of growing organically and provides an opportunity to introduce basic financial, marketing, and operational terms that can be explored in following classes. The material includes a PMI process that further allows discussion on that technique. The case opens with a conference call and another barrage of questions for CEO Lorenzo Zambrano about his bid to buy Australia-based Rinker Group in October 2006. Until this point, CEMEX has had a long-standing habit of buying businesses in emerging markets; this acquisition would be a departure from that strategy. If the deal goes through, it would be the single largest acquisition in CEMEX's history, and it would be among its few forays into a developed market other than in the neighboring United States. The company has grown exponentially and successfully. Why would this effort be any different? Was the acquisition a good idea or not? And if it was, how would Zambrano and his leadership team convince Wall Street and others of that?
Authors :: S. Venkataraman, Yiorgos Allayannis, Gerry Yemen
Swot Analysis of "Taking a Mexican Company Global-The CEMEX Way" written by S. Venkataraman, Yiorgos Allayannis, Gerry Yemen includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cemex Zambrano facing as an external strategic factors. Some of the topics covered in Taking a Mexican Company Global-The CEMEX Way case study are - Strategic Management Strategies, Mergers & acquisitions and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Taking a Mexican Company Global-The CEMEX Way casestudy better are - – increasing energy prices, technology disruption, increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%,
increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Taking a Mexican Company Global-The CEMEX Way
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Taking a Mexican Company Global-The CEMEX Way case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cemex Zambrano, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cemex Zambrano operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Taking a Mexican Company Global-The CEMEX Way can be done for the following purposes –
1. Strategic planning using facts provided in Taking a Mexican Company Global-The CEMEX Way case study
2. Improving business portfolio management of Cemex Zambrano
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Cemex Zambrano
Strengths Taking a Mexican Company Global-The CEMEX Way | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cemex Zambrano in Taking a Mexican Company Global-The CEMEX Way Harvard Business Review case study are -
Training and development
– Cemex Zambrano has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Taking a Mexican Company Global-The CEMEX Way Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Highly skilled collaborators
– Cemex Zambrano has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Taking a Mexican Company Global-The CEMEX Way HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Cemex Zambrano has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Taking a Mexican Company Global-The CEMEX Way - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Cemex Zambrano are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Analytics focus
– Cemex Zambrano is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by S. Venkataraman, Yiorgos Allayannis, Gerry Yemen can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Superior customer experience
– The customer experience strategy of Cemex Zambrano in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Cemex Zambrano in the sector have low bargaining power. Taking a Mexican Company Global-The CEMEX Way has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Cemex Zambrano to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Cemex Zambrano
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Cemex Zambrano does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Cemex Zambrano digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Cemex Zambrano has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
High brand equity
– Cemex Zambrano has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Cemex Zambrano to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Cemex Zambrano is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– Cemex Zambrano is one of the leading recruiters in the industry. Managers in the Taking a Mexican Company Global-The CEMEX Way are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses Taking a Mexican Company Global-The CEMEX Way | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Taking a Mexican Company Global-The CEMEX Way are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Cemex Zambrano is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Taking a Mexican Company Global-The CEMEX Way can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Skills based hiring
– The stress on hiring functional specialists at Cemex Zambrano has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Taking a Mexican Company Global-The CEMEX Way, it seems that the employees of Cemex Zambrano don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Aligning sales with marketing
– It come across in the case study Taking a Mexican Company Global-The CEMEX Way that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Taking a Mexican Company Global-The CEMEX Way can leverage the sales team experience to cultivate customer relationships as Cemex Zambrano is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Taking a Mexican Company Global-The CEMEX Way, in the dynamic environment Cemex Zambrano has struggled to respond to the nimble upstart competition. Cemex Zambrano has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, Cemex Zambrano has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High bargaining power of channel partners
– Because of the regulatory requirements, S. Venkataraman, Yiorgos Allayannis, Gerry Yemen suggests that, Cemex Zambrano is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Slow decision making process
– As mentioned earlier in the report, Cemex Zambrano has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Cemex Zambrano even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
No frontier risks strategy
– After analyzing the HBR case study Taking a Mexican Company Global-The CEMEX Way, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Increasing silos among functional specialists
– The organizational structure of Cemex Zambrano is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Cemex Zambrano needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Cemex Zambrano to focus more on services rather than just following the product oriented approach.
High cash cycle compare to competitors
Cemex Zambrano has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Opportunities Taking a Mexican Company Global-The CEMEX Way | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Taking a Mexican Company Global-The CEMEX Way are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Cemex Zambrano is facing challenges because of the dominance of functional experts in the organization. Taking a Mexican Company Global-The CEMEX Way case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Developing new processes and practices
– Cemex Zambrano can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Building a culture of innovation
– managers at Cemex Zambrano can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Cemex Zambrano can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Cemex Zambrano can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Loyalty marketing
– Cemex Zambrano has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Creating value in data economy
– The success of analytics program of Cemex Zambrano has opened avenues for new revenue streams for the organization in the industry. This can help Cemex Zambrano to build a more holistic ecosystem as suggested in the Taking a Mexican Company Global-The CEMEX Way case study. Cemex Zambrano can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Cemex Zambrano in the consumer business. Now Cemex Zambrano can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Cemex Zambrano has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Taking a Mexican Company Global-The CEMEX Way - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Cemex Zambrano to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Cemex Zambrano can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Cemex Zambrano in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Buying journey improvements
– Cemex Zambrano can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Taking a Mexican Company Global-The CEMEX Way suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Cemex Zambrano can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Cemex Zambrano can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Taking a Mexican Company Global-The CEMEX Way, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Taking a Mexican Company Global-The CEMEX Way External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Taking a Mexican Company Global-The CEMEX Way are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Taking a Mexican Company Global-The CEMEX Way, Cemex Zambrano may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Regulatory challenges
– Cemex Zambrano needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Stagnating economy with rate increase
– Cemex Zambrano can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Increasing wage structure of Cemex Zambrano
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Cemex Zambrano.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Cemex Zambrano in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Cemex Zambrano can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Cemex Zambrano is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Cemex Zambrano business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Cemex Zambrano needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Cemex Zambrano can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Cemex Zambrano can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Taking a Mexican Company Global-The CEMEX Way .
Technology acceleration in Forth Industrial Revolution
– Cemex Zambrano has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Cemex Zambrano needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Consumer confidence and its impact on Cemex Zambrano demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Weighted SWOT Analysis of Taking a Mexican Company Global-The CEMEX Way Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Taking a Mexican Company Global-The CEMEX Way needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Taking a Mexican Company Global-The CEMEX Way is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Taking a Mexican Company Global-The CEMEX Way is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Taking a Mexican Company Global-The CEMEX Way is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Cemex Zambrano needs to make to build a sustainable competitive advantage.