CEMEX: Global Growth Through Superior Information Capabilities (Abridged) 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 (Abridged)
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. This is an abridged version of a case.
Authors :: Donald A. Marchand, Katarina Paddack, Rebecca Chung
Swot Analysis of "CEMEX: Global Growth Through Superior Information Capabilities (Abridged)" written by Donald A. Marchand, Katarina Paddack, Rebecca Chung 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 (Abridged) 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 (Abridged) casestudy better are - – technology disruption, there is backlash against globalization, wage bills are increasing, central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices, talent flight as more people leaving formal jobs,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, etc
Introduction to SWOT Analysis of CEMEX: Global Growth Through Superior Information Capabilities (Abridged)
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 (Abridged) 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 (Abridged) can be done for the following purposes –
1. Strategic planning using facts provided in CEMEX: Global Growth Through Superior Information Capabilities (Abridged) 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 (Abridged) | 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 (Abridged) Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the CEMEX: Global Growth Through Superior Information Capabilities (Abridged) Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Effective Research and Development (R&D)
– Cemex Cement 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 CEMEX: Global Growth Through Superior Information Capabilities (Abridged) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
Sustainable margins compare to other players in Technology & Operations industry
– CEMEX: Global Growth Through Superior Information Capabilities (Abridged) 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.
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.
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 (Abridged) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Cemex Cement
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Cemex Cement does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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 (Abridged) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
Low bargaining power of suppliers
– Suppliers of Cemex Cement in the sector have low bargaining power. CEMEX: Global Growth Through Superior Information Capabilities (Abridged) 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.
Analytics focus
– Cemex Cement 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 Donald A. Marchand, Katarina Paddack, Rebecca Chung 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.
Training and development
– Cemex Cement has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in CEMEX: Global Growth Through Superior Information Capabilities (Abridged) 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.
Weaknesses CEMEX: Global Growth Through Superior Information Capabilities (Abridged) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of CEMEX: Global Growth Through Superior Information Capabilities (Abridged) are -
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.
High operating costs
– Compare to the competitors, firm in the HBR case study CEMEX: Global Growth Through Superior Information Capabilities (Abridged) 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study CEMEX: Global Growth Through Superior Information Capabilities (Abridged), it seems that the employees of Cemex Cement 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study CEMEX: Global Growth Through Superior Information Capabilities (Abridged), in the dynamic environment Cemex Cement has struggled to respond to the nimble upstart competition. Cemex Cement has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Cemex Cement is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study CEMEX: Global Growth Through Superior Information Capabilities (Abridged) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– After analyzing the HBR case study CEMEX: Global Growth Through Superior Information Capabilities (Abridged), 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Donald A. Marchand, Katarina Paddack, Rebecca Chung 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.
High cash cycle compare to competitors
Cemex Cement 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.
Aligning sales with marketing
– It come across in the case study CEMEX: Global Growth Through Superior Information Capabilities (Abridged) 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 (Abridged) 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.
Opportunities CEMEX: Global Growth Through Superior Information Capabilities (Abridged) | 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 (Abridged) are -
Leveraging digital technologies
– Cemex Cement 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.
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.
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 (Abridged) - 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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Cemex Cement can use these opportunities to build new business models that can help the communities that Cemex Cement operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Cemex Cement 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 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 (Abridged), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Cemex Cement 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Cemex Cement is facing challenges because of the dominance of functional experts in the organization. CEMEX: Global Growth Through Superior Information Capabilities (Abridged) 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.
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.
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.
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.
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 (Abridged) 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.
Threats CEMEX: Global Growth Through Superior Information Capabilities (Abridged) 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 (Abridged) are -
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.
Regulatory challenges
– Cemex Cement 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 Technology & Operations industry regulations.
High dependence on third party suppliers
– Cemex Cement high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Environmental challenges
– Cemex Cement 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 Cement can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
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.
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 Cement business can come under increasing regulations regarding data privacy, data security, etc.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Cemex Cement needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
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 (Abridged), 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 .
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Cemex Cement 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 CEMEX: Global Growth Through Superior Information Capabilities (Abridged) .
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.
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.
Weighted SWOT Analysis of CEMEX: Global Growth Through Superior Information Capabilities (Abridged) 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 (Abridged) 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 (Abridged) 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 (Abridged) 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 (Abridged) 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.
