Cemex Firm’s Innovation and Entrepreneurship Report

Cemex Firm’s Innovation and Entrepreneurship Report

Executive Summary

Cemex is the most profitable multinational enterprise in the cement business. Cemex has now a free money move of more than US$2 billion in a year and it possesses solid, secure investment-grade credit ratings. Cemex’s monetary situation and system strengthen its steadiness sheet, access low-cost capital, and creates a gorgeous field of funding. The key elements success of Cemex’s success is-

  1. Entrepreneurial staff and robust administration;
  2. Product and services;
  3. Advanced marketing,
  4. Business ideologies or philosophy

Cemex believes that open and trustworthy interaction with stakeholders will help to develop its enterprise. Thus Cemex regularly communicates with its shareholders to keep the investors informed and provide all information about its actions. Cemex encourages workers to offer info and opinion for bettering its operations and consider worker satisfaction and make them a world-class workers. Cemex maintains a relationship with world organizations targeted on the function of the cement trade in achieving sustainable development.

Cemex conducts many surveys with clients to differentiate their needs to be able to identify the process to improve services and it follows a well-communicative technique to help, keep and create sturdy relationships with suppliers and understand their concerns. Cemex can additionally be involved with environmental and social factors. Thus Cemex Co-processes wastes use alternative uncooked materials and fuels, takes part in Climate change and GHG emission reduction, Eco-efficiency Programs, and Environmental Protection and Environmental Culture

Market share is the issue that ensures the return from the investment. Market means the purchasers and increasing market means the increase of shoppers. For the existence, in the lengthy run, multinational firms are all the time combating to seize market share and those, who can achieve this extra, turn out to be the market leader. Cemex is considering globally to be able to reach multinational enterprise. Thus Cemex is trying to capture the market share to make sure its steady progress and take the best place in the cement trade.


Cemex Cement Company was founded in Mexico in 1906. It did this through a combination of inner progress and international acquisitions. Cemex has maintained a higher level of profitability than other cement firms. Cemex has grown from a small, regional cement firm into a high global constructing options company. “Throughout the course of historical past, Cemex has set up new crops in many parts of the world. Series of acquisitions and increased production of vegetation have helped the expansion of the corporate. Post-2000, Cemex is the biggest cement producer of North America.” (Cemex, 2008). In final year’s TCP100 ranking of the biggest producers, Cemex was No. one.

“With the signing of the GATT in 1985 turning Mexico into an open market, Cemex seized its probability, divesting most of its non-core cement related companies and buying the country’s biggest Cement manufacturers. Not solely was it now the number one national player, however it was additionally the tenth largest cement company in the world.” (Lasserre and Picoto, April 2007).

Cemex success or milestones in a short-

  1. 1994, Corporate Sustainability Strategy: Technology, EHS Culture, and EMS.
  2. 1997, Corporate CO2 Strategy: Energy optimization, Clinker substitution, and Alternative fuels.
  3. 2002, Cement Sustainability Initiative. Cement industry CO2 protocol.
  4. 2003, WEF Global Greenhouse Register.
  5. 2005, Mexico GHG Program.
  6. 2005, CSI Agenda for Action Report.
  7. 2006, Forge Green Redevelopment.
  8. 2007, Cemex and Rinker agreed to terms of a deal that creates a concrete producing behemoth in North America.

The spectrum of things that play a key function in Cemex’s success and growth are –

  1. Inventing, creating, developing, and implementing new expertise,
  2. Innovative manufacturing practices and that helps to make new cement plant design;
  3. Selective mining techniques and optimum quarry exploitation to ensure proper use;
  4. Use of other raw supplies, corresponding to blast-furnace slag and fly ash, byproducts of metal manufacturing and power stations;
  5. Recycling and reuse of materials to minimize price and correct use of materials;
  6. Thinking of economical and environmental elements Cemex reusing wastes like petcoke, waste oils, used solvents, etc. as different fuels.

The revolutionary thinking and the traits of Cemex make it different from different enterprise organizations and possess a great value to its stakeholders. Mapsofworld website online exhibits the mission of Cemex Cement Company as “is to serve the global building needs of their prospects and create value for his or her stakeholders by becoming the world’s most efficient and profitable building-solutions company” (Cemex, 2008).

Guidance for Development


Cemex’s commitment to social responsibility guides our strategy for sustainable improvement which is to run an efficient and worthwhile enterprise whereas caring for the needs of the environment and our communities. As a half of an trade that depends on pure sources and vitality our sustainability rules are (Cemex, 2008):

  1. To employ cutting-end technology to ensure vitality effectivity and the optimum use of raw materials;
  2. Promote a culture of environmental awareness integral well being and safety; and
  3. Use the best gear and techniques to protect our people, neighbors, and setting.

Godínez (December 2007) states that the ‘Cemex commitment to development’ is predicated on the following matter:

  1. Co-processing wastes.
  2. Use of uncooked supplies and various fuels.
  3. Climate change and GHG emission reduction.
  4. Ecoefficiency Programs.
  5. Environmental Protection and Environmental Culture.
  6. Environmental Management Systems (ISO).

The fundamental idea of sustainable improvement and development of Cemex

Achieving market share and retain it is the fundamental concept of profitable and sustained double-digit progress of Cemex Cement Company. Market share is the thing that instantly measures a company’s position. Multinational corporations doing business years after years and their primary goal is capturing market share. It is the only thing that is immediately associated to the growth and sustainability of the business.

To obtain this Cemex has used some instruments as well as extremely adaptive management culture and philosophy. It also distinguished Cemex from its rivals and others. Market share is the factor that immediately signifies the market leader and is immediately involved with the return and sustainability of a company. All the organizations the principle objective is to gain profit and to get it, organization use all instruments and ways to achieve, increasing and retain its market.

Specific Tools

Getting control over the market and gain market share means to get customer and retain them by solving their need and want. To achieve this, Cemex as well as other organizations should emphasize buyer need-want, worth, and perception. From the research about Cemex, it is discovered that Comes has used the next instruments.

  • Find prospects need and market.
  • Use of Technology.
  • Cost minimization.
  • Customer service and worth.
  • Highly environment friendly administration.

To discover customers’ needs and market

Market means the set of actual and potential consumers of a product or service (Kotler and Armstrong, 2003, p.10). Before producing a product or getting into a market, a business enterprise should analyze the market attractiveness. That means the market dimension (number of customers), competitors, market- growth, the buying power of the shoppers, opportunities, and threats, opponents, and so on. If there are many markets then companies have to select the small and nearest one to enter. The key factors to market imaginative and prescient, structure, and analysis might point out as below:

  1. Government guidelines and regulations
  2. Global extra functionality of the business enterprise
  3. To assume and forecast global competition
  4. Gaining market share and build a robust position by Merger and acquisition
  5. To observe and keep in mind the changes in buyer expectation
  6. Always trying to keep tempo with the new changes in technology
  7. Strategy must be modified with the demographic changes
  8. Products shall be modified with the changes in life and work types.

All of these play a key function to select and target a market. The modifications of these inspire the creation of market alternatives or threats.

From the study of Cemex, it is discovered that it first targeted the US markets without analyzing the market situation correctly and it suffered for that. When it understood its fault it turned to Spain, comparatively little market. Analyzing the promote it discovered the weak points of the 2 largest cement firms. It sent 23 managers there with a particular way of business, known as ‘Cemex Way’ (Lindquist, 2002). As they analyzed the market properly and took the required motion, they got success. Here their revenue elevated 24 p.c from 7 percent in the course of the first two years (Lindquist, 2002).

Unlike its European competitors, Cemex concentrates on growing nations the place progress is stimulating construction activities using cement (Lindquist, 2002). Thus it searched different continents for new markets and established its market place. Now Cemex operates business in additional than 50 countries across four continents (Cemex: 100 Years, n.d., p.8). From the above comparability, it can be said that Cemex’s progress has been made for the expansion of its market. Besides, this Cemex turns potential customers into actual prospects. They determine the need of the purchasers and remodel them into demand. Most individuals need to own an excellent quality house, but the per head income of the folks of the third world country is too low to construct their very own home.

For instance, in Mexico, most people earn too low to assemble their own home. Through the research, it has been unveiled that the values of sustaining status in the neighborhood through collaborating in festive communal practices had been in conflict with getting ahead and improving the living situations of one’s household. Then Cemex introduced “tanda clubs”, the place the members of low-income communities joined with the club that gave them the best to kind constructing materials groups that labored much like tandas. In the club tanda as a substitute of a fund, group members received the building supplies to build their rooms which helped them build houses in addition to improve the sale volume.

Use of Technology

“Cement companies are not known as high-tech innovators, however Mexico’s Cemex has provide you with a winning formulation for mixing concrete and expertise. Using the first-rate information system, it has extracted extraordinary profits from a gritty commodity business” (Miami, November 2000). Entering the world market Cemex used the higher technology for its enterprise actions and constructed up its personal network system. Indeed, Cemex makes use of higher class know-how for producing and promoting products. It helps talk among the many branches of Cemex and management them.

“Informatica Power Center is the only answer that offered us the unique mixture of universal information access, high performance, and information movement flexibility that we would have liked to implement a worldwide knowledge synchronization system throughout a heterogeneous infrastructure.” (Enriquez, 2008).

Miami (November 2000) explains the state of affairs of Cx Network of Cemex Company as such,

“The first three fall[s] underneath Cx Network, the company’s newly fashioned umbrella unit. Investors would in all probability look askance at some other cement firm that attempted to get into the Internet so aggressively. But regardless of its rough line of business, Cemex, which had sales final yr of $4.eight billion, has turn out to be famous for its use of knowledge expertise. At its headquarters in Monterrey, Mexico, satellites and a space-age management room help Cemex make certain its cement vans are getting used as effectively as attainable.”

“As a result, Cx Network is being taken critically on Wall Street and in Latin America. ‘Cemex has offered a really complete strategy,’ says Gordon Lee, cement and construction analyst at Goldman Sachs” (Miami, November 2000).

Alternative Raw Materials

In Mexico, Cemex acquired a ‘Best Practices Award’ from the Mexican Center of the Philanthropy (CEMEFI) for utilizing alternative raw materials (Godínez, December 2007, p.14). Alternative raw supplies and gasoline that are used by Cemex are as follows:

  • Cemex invented an efficient resolution to industrial waste disposal by utilizing them as various uncooked supplies to produce cement.
  • It invented a expertise to lower vitality consumption and scale back its reliance on virgin raw supplies by utilizing alternative supplies corresponding to, fly ash, pozzolana, slag, and synthetic gypsum to supply cement.
  • In order to minimize back its energy costs and environmental impacts including CO2 emissions and solid wastes, options to traditional fossil fuels as oil, coal, and pure fuel are sought.
  • CEMEX has found that substitutes such as used oil and solvents, biomass, used tires and strong waste could be burned in kilns to provide high-quality cement.

Co-processing different fuels and uncooked supplies are used in Cemex kilns within the strategy of a cutting-end technology, airtight and safe (Godínez, December 2007, p.13). Cemex uses its technology not solely to build factory plants and strong communication systems but also uses its know-how to recycle and reuse supplies to attenuate the cost of production and to ensure the proper use of materials. Thus it helps make Eco-balance and the economical use of raw supplies.

Cost minimization

Cost minimization is the device that ensures the maximum profit of an enterprise. Cost minimization means minimizing every kind of costs which are associated to the product. A enterprise organization can reduce the price within the following ways-

  1. Cost of collecting uncooked supplies: To reduce the price of production, the sources of uncooked materials or suppliers could be modified.
  2. Cost of uncooked materials: The business can reduce the price of elements that are wanted to supply the product.
  3. Cost of producing: By altering the way in which of manufacturing or altering the opposite serving to ingredients a enterprise can minimize the price of production.
  4. Factory cost: A business can reduce the worth of a product by minimizing its manufacturing facility cost which denotes the sustaining price.
  5. Packaging cost: A business can minimize the value of the product by minimizing the packaging price.
  6. Transportation cost: Transportation prices might increase the cost of the product. To minimize this value factories or manufacturing vegetation may be arrange in a suitable place between the source and target market.
  7. Warehousing cost: A business has to warehouse the product in a place the place the price is low however secure.
  8. Marketing value: Marketing price ought to be minimized to maintain the value of the product cheap and to maximise the profit.

Effective management always tries to minimize its price. It offers a aggressive advantage to the enterprise enterprise (Smith, 2004). Thus it might possibly sustain and capture the market. Cemex is no exception to this. By analyzing the Cemex, the study finds out that-

  1. To seize market or market share Cemex acquired many cement plants of its goal area or arrange vegetation there. It has minimized the price of manufacturing, cost of transportation, and warehousing price. It additionally minimized the price of distribution and ensured the correct distribution.
  2. In order to reduce energy costs and environmental impacts together with CO2 emissions and solid wastes, Cemex has sought options to conventional fossil fuels- oil, coal, and pure gas. Besides Cemex has discovered that substitutes such as used oil and solvents, biomass, used tires and stable waste could be burned in our kilns to supply high-quality cement (Godínez, December 2007).
  3. Cemex has minimized its manufacturing value and the cost of raw materials by applying an environment friendly solution to industrial waste disposal by utilizing them as alternative raw materials. Cemex has lessened vitality consumption and reduce its reliance on virgin raw materials by using different materials corresponding to fly ash, pozzolana, slag, and synthetic gypsum to supply cement. (Godínez, December 2007)
  4. Besides this Cemex uses essentially the most modern and strong communication system known as the Cx community. It saves each time and money and will increase the effectivity of administration. This provides it logistical support to management; ensures correct distribution and production.

Cost minimization is doubtless certainly one of the primary tools to maximize revenue. It not solely brings monetary benefit but additionally creates a better and advantageous position in the aggressive market.

Customer service and value

In the trendy age, enterprise means to earn revenue by way of customer support or satisfaction. It is the most important software to achieve new clients and retain them. Loyal customers are the assets of a business.

In order to become a market-oriented company like Cemex, an organization should be concerned available within the market and administration has to yield full assist to the entire work. That means, the Business should monitor and analyze the fast modifications towards the customer’s wants and needs. Businesses should decide the impact of the changes to the customer’s satisfaction, improve product quality or add options, and implement a strategy that would develop superiority of the corporate so as to compete with the altering setting.

Cemex has achieved remarkable customer service in a variety of the most logistically challenged nations like Venezuela, Mexico, or the Philippines (Lindquist, 2002). Many emerging-economy central cities faced main traffic flow problems, the outcome of slim streets and large volumes of site visitors leading to blockages. This delayed the supply of concrete and brought on the slow growth of the most important constructing constructions. Cemex provided an answer which is data technology. By providing every truck with a 2-way radio and a map and a central management office, when CEMEX vehicles slowed as a outcome of visitors problems the central control would direct the trucks round the problem (OLT, 2005).

As a result of this innovation, CEMEX was quickly capable of provide clients supply within one half-hour of the agreed delivery time. CEMEX had so much confidence in this system that they provided compensation for every minute late over the 30 minutes. Customer confidence in CEMEX soared along with CEMEX’s demand (Lindquist, 2002). “A enterprise is market-oriented when its tradition is systematically and completely dedicated to the continual creation of superior buyer value”(Slater and Narver,1994). “Market orientation involves using superior organizational expertise in understanding and satisfying customers” (Rangkuti, n.d.).

To better understand the activities through which a agency develops a competitive advantage and creates shareholder worth, it is useful to separate the business system into a collection of value-generating actions referred to as the worth chain (Porter, 2004).

Now from the examine of Cemex, it’s found that Cemex at all times tries to add value to its merchandise. It uses know-how for the most effective performance of its product. Cemex invented and used alternate gas and raw material, which helps maintain ecological stability. Maintaining ecological stability possesses a great value to its shareholders and attracts new customers, retains them, and makes them loyal to its products.

Now, people are very a lot cautious about the environment. As Cemex has taken the societal advertising coverage, it has gained the loyalty of the client and the complement of environmental teams. Cemex is at all times concerned about market orientation. Market orientation always commences from the knowledge made by virtue of shoppers, opponents, and the market (Rangkuti, n.d.). Based on such info from them, the business performs coordinated actions in order to create superior buyer value. Cemex is all the time committed to its customer value and the method of making superior value for its clients.

Cemex additionally has some distinctive capabilities. “Distinctive capabilities” means a gaggle of skills and accrued data obtained on the idea of the organizational course of. Rangkuti (n.d.)says that

“[t]hus the Company can coordinate its activities based mostly on the resources potential possessed, therefore it’s completely different from what the competitor does. Components of capabilities embody the ability (cross-functional teams), the amassed knowledge to the expertise against a brand new product; Organizational course of; coordination of varied activities (communication); Assets (brand image). All these parts of capabilities create a superior buyer worth.”

Cemex at all times tries to create superior customer value to hold and retain its prospects.

Highly efficient management

Management is a universally essential perform. It is essential for all types of organizations, whether they be business organizations or non-business organizations. This is so because every group requires the making of decisions, the coordinating of activities, the handling of people, and evaluating the efficiency directed in course of its objectives. This task for the organizations performed by that accountable particular person known as the supervisor. A supervisor brings the expertise of humans and combines it with the machine, supplies, and money. Qualified managers, due to this fact, are important each in their companies and in the future society. They are so necessary that high-quality management is a firm’s single most necessary useful resource.

Cemex’s “commitment to employee improvement is multifaceted” (Cemex, 2008). From its global leadership and international administration applications to its scholarships and on-line coaching courses, it works to foster its employees’ development at each stage of their careers. Cemex additionally encourages its employees to take international assignments. Today several hundred managers – at many different levels – are working outdoors of their home countries. “These assignments not only additional the person participant’s progress, but additionally facilitate the exchange of best practices and the event of Cemex shared corporate culture.” (Cemex, 2008). The organization of Cemex is managed by the Management Team which incorporates (Cemex, n.d.):

  1. Chairman and CEO
  2. Executive Vice President of Planning and Finance
  3. Executive Vice President of Development
  4. Executive Vice President of Administration
  5. President of the North America Region & Trading
  6. President of the European Region
  7. President of Southern Europe, Africa, Middle East & Asia Region
  8. President of the South America & Caribbean Region
  9. Chief Financial Officer.

Basically, the success of a enterprise is dependent upon the effectiveness of the administration. Management is the life of an organization. It engenders a relationship with all the parts of the enterprise and drives towards achieving the goal. “If there’s one factor that distinguishes us from our opponents, it is our highly adaptive administration culture and philosophy. This is the driving drive behind our capacity to offer consistent development and returns” Lindquist, Diane. (2002). A achieve Lorenzo Zambrano says, “It’s like a SWAT group,” explains the chief of 1 such group. “For the primary two months, we search for quick hits that can deliver immediate savings. We introduce our system, however we also choose up good practices that we haven’t seen wherever else” (Lindquist, 2002).

This statement proves the effectivity of Cemex’s administration. Now Cemex management members are a lot capable that they will do any work. They are highly adaptive and capable to match any changing scenario. “The CxNetworks items are steeped in Zambrano’s distinctive practices. Indeed, San Agustin says that ‘the Cemex Way is the main product each models are selling” (Lindquist, 2002). It is a very well-known establishment within the area within the opinion of San Agustin (Lindquist, 2002). “The aim is to substantiate the global construction trade. We have to maneuver always very quick. It’s part of our culture” (Lindquist, 2002).

Cemex helps a variety of wildlife conservation actions with quite so much of organizations, including nearly forty tasks in 10 international locations designed to guard extremely biodiversity ecosystems. These efforts embody reforestation, wildlife administration, scientific research, reintroduction and preservation of local native species, and the restoration of quarries (Nash, June 2002).

Innovation & Entrepreneurship of Cemex

Cemex is an outstanding instance of a successful entrepreneurial organization. It has shown an excellent means to achieve worldwide business. From the examine of Cemex, we might distinguish the necessary thing components of its success as –

  • Entrepreneurial team and strong administration.
  • Product and services.
  • Advanced marketing.
  • Business ideologies or philosophy.

Entrepreneurial team and robust teams management

The key issue of business success is its extremely adaptive administration. From the start to now, CEMEX management has proven an outstanding efficiency. CEMEX has taken many worker growth applications to improve worker skills and efficiency. Thus CEMEX has capable of construct a superior administration icon, which has drawn a borderline to tell apart CEMEX from different business organizations. CEMEX’s strong and extremely adaptive group makes each complicated and hard task of worldwide business easy and accomplished them efficiently.

CEMEX is using a powerful communication system, named exmat.wnk, which helps CEMEX to maintain nonstop communication and knowledge exchange the teams of different nations which deliver the world in CEMEX’S glowed.

Product and services

Another revolutionary factor of CEMEX’s success is its product and providers. CEMEX use higher know-how to provide their product and ensure product efficiency. CEMEX’s analysis and know-how finds a new method to produce product with cheaper in value but excessive in quality. CEMEX invented to make use of alternatives raw supplies and gasoline to provide their product. Moreover, CEMEX invented an environmentally pleasant process to produce a product which is praised by the social activist group and its buyer. Thus it helps customers to achieve more profit. Again CEMEX ensures superior service to its customers. CEMEX ensures proper distribution throughout the given time. It has built

Advanced advertising strategy

Cemex has used superior marketing strategies to its advertising aspect. It has the power to make use of advertising combine properly in their marketing. Marketing combine refers to 4P’s. The 4P’s are-

  1. Product.
  2. Price.
  3. Place.
  4. Promotion.

Cemex has used higher expertise to produce a high-quality product but is cheap in value. Moreover, Cemex is able to decrease the distribution and different costs to make the price of the product low. Cemex targets developing nations, where their product is very wanted. Cemex acquires and setup manufacturing vegetation close to their target markets. Thus it ensures proper distribution and on the right time and place.

Cemex has achieved remarkable customer service in some of the most logistically challenged nations like Venezuela, Mexico, or the Philippines. Many emerging-economy central cities confronted major visitors flow issues, the end result of narrow streets and huge volumes of traffic leading to blockages. This delayed the supply of concrete and brought on the sluggish improvement of the main building constructions. Cemex offered a solution which is info expertise. By providing each truck with a 2-way radio and a map and a central management office, when CEMEX vans slowed as a end result of site visitors issues the central control would direct the trucks round the problem.

As a results of this innovation, CEMEX was rapidly capable of provide customers supply inside one half-hour of the agreed delivery time. CEMEX had a lot confidence in this system that they provided compensation for each minute late over the 30 minutes. Customer confidence in CEMEX soared along with CEMEX’s demand (Lindquist, 2002). Cemex has taken many methods to attract its customers. It makes use of environmentally friendly procedures to provide its merchandise and supply superior customer service to draw its buyer.

Business Ideology or Philosophy

Business Ideology or Philosophy is the factor that focuses on the mission, goal, and tradition of the organization. For the time being Cemex has built up a strong ideology, which distinguishes it from different companies. It additionally accelerates the staff spirit and confidence level of the Cemex administration.


Cemex is an excellent firm that creates a job mannequin within the area of worldwide business. It has the experience of hundred years. During this long run, Cemex has modified itself into a giant multinational firm. Globalization mainly modifications the play of enterprise. The Strategic frameworks developed and analyzed for the home business cannot be applied to the international enterprise context. Business requires “new approaches to know and cope with these far-reaching modifications of globalization (Spulber, 2007, Preface). Businesses have to assume globally to have the ability to reach multinational business.

Spulber (2007) states that “how we can do this by offering a singular set of strategic tools for international business” (Preface). These strategic tools embody the “Star Analysis” which allows strategy makers to combine geographic information with market details about the worldwide business surroundings. Spulber (2007) also introduced the ‘international value connection’, which exhibits managers tips on how to account for the revenue or loss of the enterprise (Preface).

So, the examine reveals that Cemex has to go a protracted method to reach this position. Cemex has concerned itself with a lot of activities each business and social. It has –

  1. developed its technological side as a continuous course of and involved new applied sciences,
  2. built up a dynamic management system,
  3. developed the multinational business from little home enterprise,
  4. setup many crops in many international locations for manufacturing and distribution,
  5. engaged itself in several social and social welfare activities,
  6. minimized production price and invented different fuels,
  7. merged business and bought new crops and business,
  8. added worth to the product,
  9. created a membership to assist individuals build houses,
  10. provided outstanding buyer supply and logistic help, etc.

Cemex does all these not only to gain revenue but additionally to capture the market. Market share is the factor that ensures the return from the cells. Market means the customers and increasing market means the increase of shoppers. For the existence, in the long term, multinational companies are always combating to capture market share and people, who can do so more, turn into the market chief. Finally, it may be said that market share is the reality that takes to develop a enterprise at double-digit growth over a few years.


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