CEMEX Strategic Management

Introduction

Any business organization that seeks success should give much interest to its strategies and strategic management in order to boost other business rivals and increase its competitive advantages. (Gates, 2010) CEMEX is a big cement company established by a Mexican family. The company's strategy to be among the leaders companies in that field globally depends on three major orbits which are strengthening its existence in Mexico, focusing on internationalization and focusing on the global market. The company that began as a simple local business in 1906 in Mexico grew to be interested in many fields including oil, mining and tourism to be listed on the stock exchange of Mexico but cement was focused on to be its main business. CEMEX had good international opportunities in the mid 1980s but the chairman focused more in Mexico and then went globally by investing the company's noncore assets to be the best cement producer in Mexico first and then to internationalize the business. The company succeeded in Europe as in Spain and then Asia as in Philippine, Thailand and Indonesia. The company's production capacity raises in 2005 to be a global company with a current international network but there are still two main markets where CEMEX is still absent from which are China and India. The current paper is aiming at discussing the strategic management of CEMEX and its critically analyzing its future state and aspiration explaining its competitive advantage in addition to designing an alternative strategic plan for CEMEX to sustain growth in Oman market and face the challenges in it.

Analysis

Organizational vision, mission, objectives and strategic capabilities

CEMEX has a vision that depends on serving the requirements and needs of buildings for customers on a global level in addition to building a strong value for all the company's stakeholders via building a worldwide brand that reflects the most  profitable and efficient business and cement company. CEMEX is having a commitment for raising the effectiveness of the cement industry to be a partner in building nations with producing high quality cement. CEMEX mission is based on promoting the cement industry to be a key partner in the economic growth of nations and in building the infrastructures of countries and developing them. The company's mission includes having an effective advocate for all members of international cement and construction industry in addition being a responsive organization for the various issues relevant to the industry globally as well as establishing better stakeholders' relationships. (Husted and Alan, 2010) The company has organizational goals including making the company a global leader in cement industry, producing high quality products ensuring corporate social responsibility shown in many areas such as being environment friendly and helping for the world society, ensuring safety and security for all stakeholders, reaching higher levels of profitability and competitiveness in the field of cement production and ensuring sustainability in all activities and processes relevant to the business. The company also aims at invading new markets in the near future such as India and China, raising its human resources job satisfaction and retention rates and being a leader in the charity and helpful activities for the local and global societies. (CEMEX, 2016)The company has a number of strategic abilities that are used on a very professional level such as its capabilities in using technology for modernizing the techniques used in manufacturing and distributing its products and its capabilities un having strong human resources with different skills that are well used by the company to boost the global market yet the company should maintain some more core competencies that can be used for invading new markets such as India and China as these markets require new core competencies to be maintained by the company that are not found in other cement companies in these areas. (Ahlstrom and Bruton, 2009) 

Evaluation of the organization's Strategic management implications

Strategic management implications of CEMEX can be evaluated according to the international market expansion and the risk management processes. CEMEX has different strategic management processes as the company creates an environment that depends on making strategic alliances with the company's stakeholders especially shareholders who are well acknowledged with all the companies activities and policies, there are also the company's human resources who are given high interest to reduce turnover rates and retain them as the company invests in them in addition to other stakeholders including the world and local societies as CEMEX shares in many charity projects and sponsorship activates.(Harrison and John, 2007) CEMEX also tries to create value by establishing a global portfolio that includes many different activities related to integrated cement, aggregates and ready-mix concrete as the company makes sure of many steps such as valuing people who are the company's main competitive advantage as it helps customers succeed, help purchasers have long term profitability opportunities and ensuring sustainability to be fully embedded. (cemex, 2016) Yet the company should consider more risk management processes in order to consider risk as a core competency that can raise its competitive advantage as according to Lucia and Lessard, (2006), CEMEX has focused on two areas in risk management processes which are at first: growing in a very strong market and a strong institutional environment , CEMEX had the ability to succeed in markets that more powerful competitors didn't dare to enter. CEMEX has been famous for achieving many risky processes rather than avoidance of them which is a valued core competency for the company such as entering new markets in Asia and Europe; the second risk process is that CEMEX tried to make risk management as everyday activity of the company and nit as a separated process of the company's business as it became part of its cultural and organizational fabric. CEMEX includes risky decisions in the strategic planning of the company and align them with needs of the market and customers as it follows new innovative techniques in production and distribution of cement around the world. The biggest strategic risk CEMEX faced and succeeded in managing it is when its economic viability was threatened by the Mexican economy opening and the cement industry globalization as the company reacted to this threat by setting a stronger global scale and at the same time narrowing its product focus to cement and concrete only but the company has to develop new capabilities that can cope with new emerging risks in its field globally such as studying the demand risks in markets as India and China .

Explanation of competitive capabilities in improving trade margin and focus

CEMEX has competitive capabilities in improving trade margin and focus as the company focused on diversifying its geographic distribution areas to reach many new areas in addition to focusing only on cement as a main product of the company which raised its profit margin. In end of 2005, CEMEX got profits estimated with 1.5 million dollars out of its projects focusing on poor people in Mexico and although the trade margin of the company wasn't that high but it was improved by the company's capabilities in sharing in CSR projects in poor countries as Mexico and others in Asia and Africa which raised the trade margin as a result of improving the company's image at the countries where such projects were made and in other global countries based on such profitable partnerships with such countries. (Werhane et al, 2009). CEMEX is making deep analysis for the industry and this is among its competitive capabilities as the company has strong analysts who are able to study the market before entering it in addition to measuring loss and profit via different types of cost benefit analysis that can tell how much the company can gain from a specific market as for example, CEMEX is improving its trade margin by making good business in the USA as  the reasonable low price of portland cement and clinker the American companies import from CEMEX has made CEMEX get a disproportionate share of the U.S. market but at the same time this caused CEMEX problems such as the complaints of the  U.S. producers who accused CEMEX of selling its portland cement and clinker in prices that are less than the fair market value in which they described as predatory. (Bowman, 2010) According to Bovet, Martha and Consulting, (2000), margins of CEMEX are improving aligning with the strategy of CEMEX for paying down debt via selling off some of its real estate. As a way for investment; Cemex focused on its $520m contribution to its 2015 EBITDA from higher pricing policy and predicted a greater contribution in the year 2016. Debt reduction is a capability of CEMEX that is followed to raise trade market. CEMEX is also following a value before volume strategy that is able to raise its profitability and was followed for the past three years as the company's contribution was raised to $520m in 2015 after it was below $400m in years 2013 and 2014 at $395m and $390m.

Alternative strategic plan for CEMEX 's challenges and growth sustainability in Oman

Oman is a big market that all international businesses seek to inter and make business in due to many reasons such as the vivid investment conditions and supportive business environment as the government gives good opportunities to businessmen in related to taxation systems and import and export policies and tariffs. According to Hegazy and Doust, (2016) Oman is a main country of the Middle East where CEMEX is focusing as it has a large population and different industries that all requires construction projects for both housing and manufacturing needs. CEMEX needs to have an alternative strategic plan for facing any challenges in Oman and in improving the business there as the plan should be built on main goals of increasing the products distributed in Oman and perhaps there should be special plants for the company and this depends on the relationships between CEMEX and Oman government as the company can find many good opportunities for cement manufacturing in Oman with its different deserts and nature. The plan can be short term or long term as this depends on the size and volume of investment s set to be practiced by the company in Oman. CEMEX can also make deep analysis for the needs of the Omani market and how to control prices in the country and then to expand the business in other Gulf countries such as KSA and Kuwait where there are many construction projects. CEMEX should change its plans in Oman from those in other developing countries as Oman is not in that need for CSR via building homes for the poor but the company can be a sponsor for many sport activities such as football and others which improves the company's image at its customers' eyes. Oman also needs the company to make different advertising campaigns for manufacturing the product in Oman because the people in Oman needs to learn more about how powerful and effective CEMEX cement is in order to increase profitability and success in a country such as Oman that is a great opportunity to any business to invest in.

Conclusion

In conclusion, it is important to refer to how CEMEX became in such a successful position in the market of cement today as the company began simply in Mexico but with great efforts to focus only on cement and the different risk policies maintained by the company and how the company is applying them; the company was able to get a very high position in the world as there were three basic orbits the company focused on since its start as they are: the local market, international markets and global ones. As CEMEX has succeeded a lot in that field, it seems that it gives much interest to all stakeholders as the company is keen on making shareholders acknowledged with all about the business and its profits and the human resources are highly regarded by the company in addition to the different activities such as charity and others the company is sharing in them. CEMEX tries to have strong strategic capabilities that enable it to boost the international market such as being risky and taking risk decisions after deep analysis as when CEMEX makes such analysis; the company is also successful in improving its trade market by pricing policies, CSR projects and other ways. The company was also successful in taking serious decisions like focusing on cement only as a main product. The company is recommended to take more risks to reach markets such as India and China. CEMEX has also to put a different alternative strategic planning that can depends on goals and objectives that can share for raising the company's profitability and trade margin.