Organization Policy and Stategy Case Study Example | Topics and Well Written Essays - 750 words

Organization Policy and Stategy - Case Study Example Retail sales, which were important in developing countries such as those in Asia, were less cyclical (Ghemawat 3). Asia was the growing market and its buyer power was weak because it had few cement manufacturers, high population densities and less cyclical demand. The industry was characterized by high barriers to entry in the form of high capital and energy-intensity requirements, cyclic demand and the maturity of the industry i.e. no major innovations had been recorded in the last 20 years (Ghemawat 2). About the competition within the industry we are informed that though there were six major international players, given their geographic diversification, they tended to be outperformed in any given year by competitors focused solely on local markets that happened to be "booming" (Ghemawat 3). Industry rivalry was not that intense. As for threat of substitutes, this only applies for the developed markets (Western Europe and North America) where due to the weather they prefer using wood or steel. But this would not be a big factor considering that the projected growth in these regions is at the lowest, close to 1% which is why the international players were eyeing the emerging markets. By the year 2000, CEMEX had become the third largest cement company in the world being led by the scion of the founder, Lorenzo Zambrano (Ghemawat 5). Initially, to reduce risk related to the cyclic core business, the firm began diversifying horizontally but after much thought they returned to their core competency area to seek growth through strategic acquisitions. This strategy saw the company grow to have the largest market share in Mexico before it began to spread globally. With this growth strategy, CEMEX moved from the United States to Spain to Latin America then to Asia and other regions. By December 1999 the firm had a presence in 15 countries. Still seeking greater international presence CEMEX dedicated US$1.175 billion