Introduction

A prominent international competitor in the cement industry, CEMEX is a Mexican business that has
grown more profitable over time than other, more seasoned multinationals. The greater profitability of
CEMEX provides a foundation for talking about what drives better performance globally. The numerous
advantages that CEMEX obtains from operating in other nations also expands on traditional ideas about
why businesses go global. As one of the largest companies in the world operating in this field and the
largest corporation in Mexico, the company's capacity in the late 1980s reached 15 million tons per year.
Since its establishment, the business has used numerous expansion methods. It has started exporting
cement to other countries, primarily the United States. On the other hand, the management also made
a number of acquisitions of businesses in the same industry in an effort to maintain the competitive
advantage over time.

In addition, the management was eager to lessen the company's risk and reliance on the cement sector,
so it bought a number of businesses in the petrochemical, travel, and mining sectors. The upper
management, meanwhile, was unsatisfied with this diversification and soon turned to the cement
industry. After the diverse portfolio underperformed, the management took advantage of the global
cement industry to buy numerous cement-related businesses in numerous nations. As one of the few
businesses in Mexico that turned a profit throughout that financial crisis, CEMEX was also able to
effectively navigate the economic downturn in the Mexican market because to this technique.

Although there are many companies in both markets, the level of competition among them can be
viewed as being low, which has an impact on both the local and global cement industries. Cement
pricing are established by the firm with the largest market share, and all other companies adjust those
prices to ensure that the product is profitable. Additionally, the demand for cement appears to be low in
industrialized nations, whereas it is anticipated to increase significantly in developing nations. Due to
domestic producers' increased output, the demand for cement on the global market is also impacted.
The government's policies also have an impact on the supply of raw materials, which lowers demand for
cement from international suppliers.

Background

It may be claimed that the cement industry is quite international because all of the major firms are
present in several nations. Apart from the main players, diverse smaller businesses of cement work in
much more than one location which again promotes the globalization of a cement sector. Holderbank is
one of the top three companies in the cement manufacturing sector. Holderbank operates in more than
50 countries, while Lafarge and CEMEX operate in 38 and 15 countries, respectively. This geographic
expansion illustrates the industry's high degree of globalization. The top six cement makers supply
around 40% of the world's total cement demand, demonstrating the scope of the sector's globalization.

Globalization of the cement business is fueled by the following criteria:

As one of the primary materials used in the industrial sector, cement is in great demand practically
everywhere in the globe, with the exception of wealthy nations, which has further accelerated the
globalization of the cement business. Along with the demand, the industry has very high profitability,
which attracts numerous huge businesses that aren't currently involved in this sector. On the other side,
the high demand and profitability also push businesses who are already active in this industry to grow
and expand their operations.

Any industry's strong development possibilities, which encourage current businesses to take advantage
of these chances, can be cited as the primary driver of globalization. The financial resources that are
readily available to current businesses also contribute to the industry's increased globalization. Virtually
all cement-producing businesses have sizable cash reserves, and obtaining fresh financing is therefore
not particularly difficult. The management of those nations desires to capitalize on the excess resources,
and in order to do so, they take advantage of the geographically dispersed market, bringing the cement
business to a worldwide scale. The industry is highly competitive, but the nature of the competition is
very cordial and smooth, and almost all of the players respect one another and base their pricing
strategies on the price set by the industry leader. This factor adds to the industry's allure and raises the
level of globalization even further.

Reasons preventing the cement business from going global: