A significant portion of the success of CEMEX Way can be attributed to its three main strengths, which are integration, innovation, and global trading. The post-merger integration (PMI) process enabled CEMEX to integrate its acquisitions successfully by making use of the best-standardized practices. After the company moved to Spain, it made acquisitions in several countries, including Venezuela, Columbia, and Indonesia. These acquisitions utilized effective techniques from CEMEX’s operations in Mexico. However, the company has learned from experience that successful identification and dissemination of the best practices require a standardization of business processes and organizational structure, as well as consideration of appropriateness. For example, when it was discovered that the two companies in Spain were highly productive due to the use of petroleum coke, all the other companies began using it as the primary fuel source.
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Also, the complex integration process involved the determination and further utilization of the best practices from acquired companies. The resulting set of the most efficient methods gathered from all the company’s acquisitions was used by CEMEX in conducting business throughout all of its locations. Finally, more than half of CEMEX’s practices were borrowed from its acquisitions. Thus, the first strength that contributed to the success of CEMEX Way is the company’s integration strategy that focuses on the dissemination of the best practices and standardization of business processes.
It is worth mentioning that CEMEX Way fostered innovation, especially in operations and marketing. PMI managers were encouraged to find new ways of doing things and establish new practices. One example of this particular innovation was the elaboration of the branded cement strategy, which allowed the company to attract new categories of customers. The new way of exploration of potential acquisitions allowed CEMEX to assign new partners. One more significant change which enhanced the company’s performance was the redefinition of the large markets, such as the US. As a result, CEMEX made a new acquisition and became the largest cement producer in the USA. Despite the continuous innovations, the organizational structure of the company was clearly defined with transparent role definitions and the common language.
The global trading network gave CEMEX Way unique flexibility and tremendous opportunities for growth. Since the beginning of CEMEX Way, the company stepped out to the other markets in different countries, such as Venezuela, Panama, and the Dominican Republic. CEMEX made a number of steps in the internalization process to attract new customers across the whole world. As a result, the company consolidated its position in the Mexican cement market, despite the presence of a significant competitor (Froeb, McCann, Shor, & Ward, 2015). Operating in the Spanish cement market enabled the organization to make several acquisitions and fund the further economic growth of the business. Though initially considered as a failure, CEMEX’s acquisition of UK-based RMC allowed the firm to enter the European market, thus gaining a more fabulous geographical presence. Sales in countries other than Mexico and the United States accounted for more than fifty percent of total sales, which can be considered a result of efficient management.
In summary, on its way to the position of one of the leading cement manufacturers, CEMEX has overcome a number of challenges due to its unique business strategy called CEMEX Way. The top three strengths which helped CEMEX globalize and create a common culture and standard processes are integration, innovation, and global trading. Advanced management techniques and a transparent organizational structure were also the critical factors for success.
Froeb, L. M., McCann, B. T., Shor, M., & Ward, M. R. (2015). Managerial economics: A problem-solving approach (4th ed.). Boston, MA: Cengage Learning.