CEMEX: Global Growth Through Superior Information Capabilities SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of CEMEX: Global Growth Through Superior Information Capabilities
In a decade, CEMEX has become the third largest cement company in the world and has achieved an enviable growth record. CEMEX has established its public image as a digital leader, leveraging information technology and e-business ventures in the traditional low-tech and conventional cement industry. The case, however, illustrates that being a digital leader is only part of the story. The CEMEX Way is focused on developing the right behaviors and values in CEMEX people globally to use information about products, customers, and operations effectively. This requires deploying common processes, information practices, and IT infrastructure to promote profitable growth globally and locally as well as integrate its acquisitions to its way of doing business rapidly. As the cement industry is rapidly consolidating worldwide, the case raises the issue of how a company competes with information, people, and IT capabilities to use its knowledge and information to bring the company's growth to new levels.
Authors :: Donald A. Marchand, Rebecca Chung, Katarina Paddack
Swot Analysis of "CEMEX: Global Growth Through Superior Information Capabilities" written by Donald A. Marchand, Rebecca Chung, Katarina Paddack includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cemex Cement facing as an external strategic factors. Some of the topics covered in CEMEX: Global Growth Through Superior Information Capabilities case study are - Strategic Management Strategies, IT, Mergers & acquisitions and Technology & Operations.
Some of the macro environment factors that can be used to understand the CEMEX: Global Growth Through Superior Information Capabilities casestudy better are - – increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, increasing energy prices, there is increasing trade war between United States & China, there is backlash against globalization, increasing government debt because of Covid-19 spendings,
talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of CEMEX: Global Growth Through Superior Information Capabilities
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in CEMEX: Global Growth Through Superior Information Capabilities case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cemex Cement, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cemex Cement 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 CEMEX: Global Growth Through Superior Information Capabilities can be done for the following purposes –
1. Strategic planning using facts provided in CEMEX: Global Growth Through Superior Information Capabilities case study
2. Improving business portfolio management of Cemex Cement
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Cemex Cement
Strengths CEMEX: Global Growth Through Superior Information Capabilities | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cemex Cement in CEMEX: Global Growth Through Superior Information Capabilities Harvard Business Review case study are -
Learning organization
- Cemex Cement is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Cemex Cement is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in CEMEX: Global Growth Through Superior Information Capabilities Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Technology & Operations industry
– CEMEX: Global Growth Through Superior Information Capabilities firm has clearly differentiated products in the market place. This has enabled Cemex Cement to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Cemex Cement to invest into research and development (R&D) and innovation.
Strong track record of project management
– Cemex Cement 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 Cement is one of the leading recruiters in the industry. Managers in the CEMEX: Global Growth Through Superior Information Capabilities are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– Cemex Cement has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Cemex Cement has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Cemex Cement digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Cemex Cement 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.
Cross disciplinary teams
– Horizontal connected teams at the Cemex Cement 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.
Low bargaining power of suppliers
– Suppliers of Cemex Cement in the sector have low bargaining power. CEMEX: Global Growth Through Superior Information Capabilities has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Cemex Cement to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Technology & Operations field
– Cemex Cement is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Cemex Cement in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Cemex Cement 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 CEMEX: Global Growth Through Superior Information Capabilities HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Cemex Cement is present in almost all the verticals within the industry. This has provided firm in CEMEX: Global Growth Through Superior Information Capabilities case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
High switching costs
– The high switching costs that Cemex Cement has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Weaknesses CEMEX: Global Growth Through Superior Information Capabilities | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of CEMEX: Global Growth Through Superior Information Capabilities are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the CEMEX: Global Growth Through Superior Information Capabilities HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Cemex Cement has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Cemex Cement is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Cemex Cement needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Cemex Cement to focus more on services rather than just following the product oriented approach.
Skills based hiring
– The stress on hiring functional specialists at Cemex Cement 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.
No frontier risks strategy
– After analyzing the HBR case study CEMEX: Global Growth Through Superior Information Capabilities, it seems that company is thinking about the frontier risks that can impact Technology & Operations 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Cemex Cement needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Lack of clear differentiation of Cemex Cement products
– To increase the profitability and margins on the products, Cemex Cement needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, firm in the HBR case study CEMEX: Global Growth Through Superior Information Capabilities has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Cemex Cement 's lucrative customers.
Aligning sales with marketing
– It come across in the case study CEMEX: Global Growth Through Superior Information Capabilities 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 CEMEX: Global Growth Through Superior Information Capabilities can leverage the sales team experience to cultivate customer relationships as Cemex Cement is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Cemex Cement 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 Cement 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Donald A. Marchand, Rebecca Chung, Katarina Paddack suggests that, Cemex Cement 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 to strategic competitive environment developments
– As CEMEX: Global Growth Through Superior Information Capabilities HBR case study mentions - Cemex Cement takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Opportunities CEMEX: Global Growth Through Superior Information Capabilities | 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 CEMEX: Global Growth Through Superior Information Capabilities are -
Building a culture of innovation
– managers at Cemex Cement 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 Technology & Operations segment.
Using analytics as competitive advantage
– Cemex Cement 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 CEMEX: Global Growth Through Superior Information Capabilities - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Cemex Cement to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Cemex Cement 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, CEMEX: Global Growth Through Superior Information Capabilities, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Cement in the consumer business. Now Cemex Cement can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Cemex Cement can develop new processes and procedures in Technology & Operations 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.
Buying journey improvements
– Cemex Cement can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. CEMEX: Global Growth Through Superior Information Capabilities 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Cemex Cement to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Cemex Cement to hire the very best people irrespective of their geographical location.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Cemex Cement 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 Cement 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Cemex Cement can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Cemex Cement can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for Cemex Cement to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Cemex Cement in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Cemex Cement to increase its market reach. Cemex Cement will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Threats CEMEX: Global Growth Through Superior Information Capabilities External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study CEMEX: Global Growth Through Superior Information Capabilities are -
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Cemex Cement will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Technology acceleration in Forth Industrial Revolution
– Cemex Cement has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Cemex Cement needs to keep up with the evolution of technology in the Technology & Operations 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.
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.
Shortening product life cycle
– it is one of the major threat that Cemex Cement is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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 Cement business can come under increasing regulations regarding data privacy, data security, etc.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Cemex Cement.
Stagnating economy with rate increase
– Cemex Cement 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study CEMEX: Global Growth Through Superior Information Capabilities, Cemex Cement may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
Increasing wage structure of Cemex Cement
– 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 Cement.
Consumer confidence and its impact on Cemex Cement 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Cemex Cement with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Cemex Cement can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of CEMEX: Global Growth Through Superior Information Capabilities 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 CEMEX: Global Growth Through Superior Information Capabilities 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 CEMEX: Global Growth Through Superior Information Capabilities 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 CEMEX: Global Growth Through Superior Information Capabilities 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 CEMEX: Global Growth Through Superior Information Capabilities 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 Cement needs to make to build a sustainable competitive advantage.