Introduction

CEMEX was formed in 1920 in Mexico as a global construction materials firm.

Company operates in more than 50 nations and also has business links with around
100 nations and offers consumers and regions high quality goods and trustworthy
service. This firm is regarded the global leader throughout cement production and
global ready-mixed concrete delivery with an annualized revenue of roughly USD
14.98 billion as well as a worldwide workforce of 44,000 (Özcan et al. 2018). This
report aims to determine all their scope of their strategic business analysis and the
current competitive profile of CEMEX with help of three-dimensional strategic
analysis.

Strategic Decision Making

CEMEX attaches great importance to adaptability, creativity, sustainable

development, innovation and effectiveness as part of its business statement.
Outcome of such a Mexican enterprise's internationalisation strategy is seen in figure
1 below showing geographical sales allocation in 2013, having Northern Europe
being 27%, highest share (Dra.american.edu, 2014).

Figure 1: Sales Distribution of CEMEX in 2013

(Source: Dra.american.edu, 2014)

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However, strategic decision-making is about mapping out a route depending on long-
term objectives as well as a longer-term perspective. In establishing general
objectives of a firm, this will be able to match short-term goals with this deeper,
larger purpose to ensure clear and consistent operations (Plascencia, 2017). The
cement business Cemex, one of world's major cement companies, produced a very
profitable blue ocean, which traditionally only competed in budget and performance.
It accomplished this through change from operational to emotional orientation of its
industry.

Blue Ocean Strategy

In Mexico, cement distributed in commercial bags constitutes an average of over

85% of entire cement market. However, market was unappealing as it was. More
non-consumers than consumers were there. Although most impoverished families
held their own property as well as cement was offered as quite cheap, useful
materials, chronic overpopulation of Mexicans was occurring. Fewer families added
additional rooms and average number of families required 4 to7 years to create one
more room. Therefore, inadequate and even money were used to acquire
construction materials for bulk of Mexico's poor, whereas cement houses are dreams
of Mexico. The response CEMEX gave to this issue was to establish initiative
“Patrimonio Hoy”, shifting cement's focus from an utilitarian to a fantasy gift. While
CEMEX rivals offered cement bags, CEMEX marketed a promise along with an
innovative finance and building understand exactly business strategy (Johnson,
2020).

CEMEX moved one step higher and launched little town parties even before a room
was completed, strengthening people's delight as well as tradition of “Tanda
Program” (Nieto et al. 2019). Since, firm established CEMEX including its financial
and technical solutions, this fresh emotional approach has boosted demand for
cement. For over 15 years, CEMEX has been assisting only through “Patriomonio
Hoy Program” to solve housing crisis in disadvantaged communities. It has received
several honors, including the "UN World Business Award 2006" in support of the
“Millennium Development Goals” along with the “United Nations Habitat Award 2009”
for Best Practices for “Accessful Housing Solutions”. Overall, Cemex built an

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emotionally distinct ocean of emotionally cement. It has done this by questioning its
industry's fully functional psychological orientation.

The broad definition of businesses strategic plan would involve concentrating

on core business of concrete without CEMEX in-house knowledge; improving value
proposal using flexibility, encouraging sustainable growth and enhancing financial
performance to recover financial flexibility. This includes in further depth, in
particular:

 CEMEX has invested more than $700 million in non-operating properties

over last many years and will strive to focus on their goods as a vertical
integrated corporation (Khudyakova et al. 2020).
 It enhances value by changing from selling 'items' to selling 'whole solutions,'
providing client with freedom and comfort.
 CEMEX operation has investigated financial difficulties of firm and has to far
presented a serious issue. Following financial flexibility, entire strategy of  firm
will facilitate development and expansion.

Strategic Shareholders

Strategic shares may take several forms, for example one-stop shares, cross-stops
and cyclic holdings encompassing three or more firms. Nevertheless, too
often phrase 'strategic holding' is misunderstood to mean a 'cross holding,'
conveying an idea that these interlocking relationships were essentially addressed.
Which as strategically retained shares are concerned, firms must disclose amount of
shares owned, amount acknowledged in their financial statements and particular aim
of owning stock in each of top 30 issues in respective of thier yearly securities
declarations (Al-Shammary et al. 2017).

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 Figure 2: Strategy of CEMEX to enhance value of Shareholders

(Source: Cemex.com, 2019)

According to Fernando Gonzalez, CEMEX's CEO, priority of its management

is establishment of an investment capital graded structure as foundation of its value
development plan. In addition, focus is strongly on its long-term operational goal of
increasing shareholder value. They have chosen not to continue with proposed
increase in 3.75 billion capital according to comments from corporate shareholders.
They will instead remain to focus upon their announced plan (Lamb et al. 2017). This
choice reflects Management's commitment to a discussion with their investors that is
productive and sensitive.

CEMEX's council and administration concentrate on shareholders' responsibility and

long-term shareholder (Cemex.com, 2019). CEMEX will insert a limit
on recommendation at its remarkable general shareholder conference in order to
achieve this transformation and take into account legal framework applicable, in
order for any share issued in line with recommendation to be authorised to be
constrained to no over than 1% of shares currently held by CEMEX, if this proposal
is implemented.

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 Growth of
Revenue
Profitability
Minimisation of
Cost
Return on
Investment
Eficiency of
Working Capital
Capital
Employed
Efficiency of
Fixed Capital

Figure 3: Value drivers of Shareholders

Profitability

Greater profitability depends on growth in sales and decreased costs. Revenue

expansion relies on acquisition and maintenance of lucrative clients through effective
maintenance and development of value-adding connections with their present needs.
Cost reduction requires not only cost of products supplied, as well as cost of
serving requirements of customers, such as management of supply chain expenses
(Martin, 2019).

Capital Employed

Through making more effective utilization of combined working as well as fixed

capital, return on capital employed may be enhanced. Increased efficiency of
operating expenses generally depends on acceleration of client cash flow, so that
accounts collected on sales day and a reduction on amount of cash needed in this
cash-to-cash cycle (Androniceanu, 2017).  More effective use of fixed capital
typically involves identifying ways of reducing control of financial assets and making
maintained assets more difficult.

Three Dimensional Strategic analysis

Strategic analysis plays a critical role in strategic decision-making. It frequently

provides significant information on environmental assessment and development
within and beyond a firm and exposes prospective possibilities and dangers that
must be taken into account in strategic decision-making. According to understand all
those influences of CEMEX strategic decision making it needs to analyse its three

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dimensional strategies, which includes financial strengths, relative market share and
relative market strength (Cerchione et al. 2018).

Financial Strengths

Only for 4th quarter of 2020, CEMEX posted outstanding results, with profitability
double-digit growth in most areas year-by-year. Integrated net sales climbed 9% to
US$3.5 billion for 4th quarter of 2020, and were up from similar periods for 2019 by
1% for the full year of 2020 to US$13 billion. Throughout fourth quarter of 2020
operating EBITDA has climbed by 19% to US$644 million (Shin et al. 2019). It has
risen to US$2.46 billion by 7% for the whole year. EBITDA collection is due to strong
growth in cement volumes as well as cost savings through 'operation strength' in
this fourth quarter. According to obtain sales of CEMEX it have to consider a
graphical representation from year 2017 to 2020 (Cemex.com, 2019).

Year Net Sales Operating Total Controlling Shareholder

(Million USD) Earnings equity
(Million USD) (Million USD)

2017 13,672 1,725 9,137

2018 14,375 1,724 9,601

2019 13,130 1,333 9,321

2020 12,970 1,343 8,075

Table 1: Financial findings of CEMEX

(Source: Cemex.com, 2019)

After having these quantitive data it will be easy to find current trend of financial
strengths of CEMEX. Data has been collected from secondary sources available on
CEMEX official website. From all those financial data three crucial parameters of
financial measures has been shown in below graphical presentation.

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 Net Sales (Million USD)
Net Sales (Million USD)

14,375

13,672

13,130
12,970

2017 2018 2019 2020

Figure 4: Net sales of CEMEX from 2017 to 2020

(Source: Cemex.com, 2019)

Operating Earnings (Million USD)

2,000

1,600

1,200

800

400

0
2017 2018 2019 2020

Operating Earnings (Million USD)

Figure 5: Operating Earnings of CEMEX from 2017 to 2020

(Source: Cemex.com, 2019)

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 Total Controlling Shareholder equity
(Million USD)

9,601
9,321
9,137

8,075

2017 2018 2019 2020

Figure 6: Total Controlling Shareholder equity of CEMEX from 2017 to 2020

(Source: Cemex.com, 2019)

From figure 4, 5 and 6 it can be observed that every levels of sales value has been
decreased from 2017 to 2020. As seen in this graphical representation, in 2017 net
sales was US$13,672 million which increased in 2018, however, on next year it fell
down to US$13,130 million (Cemex.com, 2019). These phenomena is observed on
all financial aspects, such as operating earnings and total controlling shareholder
equity. An economical disruption has been observed in all sectors and industries in
between 2019 to 2020 due to effect of COVID-19 and BREXIT (Beekun, 2021).
However, CEMEX was able to tackle their economical standards with their strategic
decision making process.

Relative Market Share

Relative market share is a statistic, which allows firms to determine their market
position related to their major competitors. A benchmark is the market share of latter.
It can be find out main companies and discover position it may hold in industry by
calculating their relative market share. While calculating a relative market share it
helps to understand about key companies and own market position. Vulcan

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Materials Company is listed among CEMEX’s biggest rivals and it has a share of
10.58% in 2021. However, to calculate relative market share it is required to derive
on a formula.

Relative Market Share = 100* Own Market Share / Biggest Competitor’s

market share

Figure 7: Formula of calculating relative market Share

CEMEX have a market share of 9%, according to this formula, relative market share
of CEMEX = 100* 9/10.58= 85.06%.

CEMEX’s market worth was US$12.29 billion in July 2021. According to statistics,
CEMEX is 135th most important business in world by market capital. The market
share of an existing share in a listed company, commonly referred to as the market
cap, is often employed for the measurement of a company's worth (Cemex.com,
2019).

Market Share
(Billion USD)

14.00
12.00 Market Share
(Billion USD)
10.00
8.00
6.00
4.00
2.00
0.00
2017 2018 2019 2020 2021

Figure 7: Market Share of CEMEX from 2017 to 2021

(Source: Cemex.com, 2019)

The company's current sales is $US13.29 B, thus according CEMEX’s latest

financial filings. In course of the years 2019, this firm generated revenues of

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$US12.96 B, which amounted to $US13.12 B. Total income generated by a firm by
selling goods and services is revenue. No expenses are deducted unlike revenues.

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12
10
8
6
4
2
0
2017
2018
2019
2020
2021

Revenue (USD Billion)

Figure 8: Revenue of CEMEX from 2017 to 2021

(Source: Cemex.com, 2019)

The Company's existing profits is $0.22 B according to CEMEX’s most recent

financial filings in 2021. This firm achieved a profit of -0.5 dollars in 2020, down from
its 2019 profit of 0.96 dollars. The income on this report represents income prior to
actually interest and taxes (Cemex.com, 2019).

Eranings (Billion USD)

2

1.5

1 Eranings (Billion USD)

0.5

0
2017
2018
-0.5 2019
2020
2021

Figure 9: Earnings of CEMEX from 2017 to 2021

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 (Source: Cemex.com, 2019)

Relative Market Strength

There is something confusing about word market strength. It might reference wider
market instead of specific stock or commodity. It can also refer to the potential of a
certain stock or resource trend. According to relative market strength, it is
comparison of market strength of CEMEX and its different competitors. CEMEX has
gone down the road from being an innovative and publicly listed worldwide market
leader in 25 years and a private cement-orientated local firm that confronts intense
competition in its domestic market (Business.cornell.edu, 2018). The increase has
not been clean from problems and hardships. CEMEX was all impeded by Mexico's
collapse, U.S. anti-dumping punishment, downturns, competitiveness, massive
inflation and rates downgrading, however this firm in Mexico knew how to transform
them into benefits and expand on them.

Figure 10: Fusion and acquisition value in world cement business until 2014

(Source: Business.cornell.edu, 2018)

CEMEX began to succeed in 1989, when CEMEX chose to buy and consolide its
dominance in Mexican market of Vulcan Materials Company, its major competitors in
Mexico. Cement has experienced enormous expansion, consumption doubled to
achieve 3,577 million tonnes during 2002 and 2011, driven mostly by rising housing
as well as infrastructure requirements. Only a few prominent firms share worldwide

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market, partly due to obvious wave of consolidation & purchases, which has taken
place over past 18 years as shown in figure.  While estimations are made that
market size of $395 billion was in 2017, by 2025 it is expected to hit $682 billion at a
Compound annual growth rate of 7.8 % (Business.cornell.edu, 2018).

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