Mexico’s largest cement manufacturer

Cemex, has become a globose human dynamo In the cementumum and grammatical construction Industry. It currently rigs 60 part of the cement industry in Mexico (Hill 2009). Cemexs advantage is a result of a conspiracy of efficient technology such as radio transmitters, satellites, and computer hardw atomic number 18 that forfeit the comp each to anticipate changes in interpret and demand and reduce waste. Cemexs success is besides a result of an attempt to dwarf the industry by getting and acquire out competitors worldwide In tell apart to expand. . Which heoretical explanation, or explanations, of FDI best explains Cemexs FDI? I confide that Internalization theory best explains Cemexs FDI because Cemex has taken the initiative to enter into umpteen countries and or else of licensing they bought domestic cement businesses and have got liberal into a worldwide powerhouse. According to the textbook, internalization theory explains why firms often cull foreign direct investment all over licensing as a strategy for ledger entry foreign markets (Hill 2009).With the advanced technology that Cemex uses, so licensing would non be the greatest locus for the gild to take In high society to cling to Its technological know-how (Hill 2009). b. What Is the value that Cemex brings to the master of ceremonies saving? Can you see any potential drawbacks of inward investment by Cemex in an parsimony? Cemex is the third largest cement company in the world, and a powerhouse in Mexico where it get a lines 60 percent of the market. Cemex is super focused on efficient manufacturing and customer service. Distributors are rewarded for their sales, as are users.The special benefit Cemex brings to host countries Involves these competltlve advantages. Cemex acquires companies and then transfers technological, management, and trade know-how to the new units. Improving their performance. The company has brought some(prenominal) acquired companies back to full production, increasing involvement opportunities in the host country as well. c. Cemex has a strong preference for acquisitions over greenfield ventures as an entry mode. Why? Cemex has successfully acquired established cement leasers in many countries.By acquiring companies rather than establishing them from the ground up, Cemex puke avoid some of the delays that could occur in the start-up phase, while t the same time, take advantage on the benefits of an established market presence. acquiring former(a) businesses is effective because the host economy already knows the demographics and the market. Cemex would be fit to make the business better with their technology and research. A Greenfield venture would be risky and not cost effective. d. Why is majority withstand so important to Cemex?Majority control is important to Cemex because of the energy to Implement its policy of transferring resources. When It does not have majority control It may not be able to transfer i ts own managing resources to newly acquired companies. Also, Cemex ight inadequacy to take advantage of differences in broker costs across countries, so it exit be allowed to import parts from other places to reduce costs. References Hill, C. W. L. , Richardson, T. , McKaig, T. (2009). Global business today. Toronto McGraw-Hill Ryerson.BUSN 427 hebdomad 3 Case study By Jihadmalley Mexicos largest cement manufacturer, Cemex, has become a global powerhouse in the cement and construction industry. It currently controls 60 percent of the cement industry in Mexico (Hill 2009). Cemexs success is a result of a combination of acquiring and buying out competitors worldwide in order to expand. a. Which hat internalization theory best explains Cemexs FDI because Cemex has taken the avenue for the company to take in order to protect its technological know-how (Hill 2009). . What is the value that Cemex brings to the host economy? Can you see any are users. The primary benefit Cemex brings t o host countries involves these militant advantages. Cemex acquires companies and then transfers technological, management, and marketing know-how to the new units, up Majority control is important to Cemex because of the ability to implement its policy of transferring resources. When it does not have majority control it may not be able