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Global Business & Market Strategy: CEMEX - China Market Entry Proposal
Global Business & Market Strategy: CEMEX - China Market Entry Proposal
Global Business & Market Strategy: CEMEX - China Market Entry Proposal
Global Business & Market Strategy: CEMEX - China Market Entry Proposal
Global Business & Market Strategy: CEMEX - China Market Entry Proposal
Global Business & Market Strategy: CEMEX - China Market Entry Proposal
Global Business & Market Strategy: CEMEX - China Market Entry Proposal
Global Business & Market Strategy: CEMEX - China Market Entry Proposal
Global Business & Market Strategy: CEMEX - China Market Entry Proposal
Global Business & Market Strategy: CEMEX - China Market Entry Proposal
Global Business & Market Strategy: CEMEX - China Market Entry Proposal
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Global Business & Market Strategy: CEMEX - China Market Entry Proposal

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Executive Summary: Based on analysis of the latest People's Republic of China Five Year Guideline (2011-15) and CEMEX's current operations, two western Special Economic Zones were identified as …

Executive Summary: Based on analysis of the latest People's Republic of China Five Year Guideline (2011-15) and CEMEX's current operations, two western Special Economic Zones were identified as presenting significant business opportunities for CEMEX, one of the world's largest cement producers.

3P (people, planet, and profit) criteria and a CAGE distance framework (culture, administrative, geographic, and economic differences) were applied during the market research and analysis stages in order to identify lucrative market opportunities for CEMEX to enter and gain competitive advantage in the western Chinese market. Based on these findings a strategy was recommended for a market entry into western China.

Uncertainty analysis was used to determine likely failure points, recommendations were made on mitigating those risk factors, including the identification of several regional markets that were over-served.

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  • Typo corrected on this slide - AB
  • HERE of small to mid-sized firms that have pre-established relationships with the CPC government officials at local and national level.   Chinese construction materials market is forecast to be worth $335.5Bn, a rise of 36.6% since 2010 Housing, Roads, Railways, Bridges and Ports, Housing, China’s need for consistent and quality ready-mix and cement products
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  • Transcript

    • 1. CEMEXChina Market Entry Strategy Team 3z Alexandra Brooks, Steve Chaky, Ruben Pedroza, Sharon Singleton, Scott Wilbur September 7, 2012
    • 2. Introduction - CemexI. Global Cement Firm Operating in 50+ CountriesII. Entered China Market in 2007III. Operating 6 Plants as of 2010IV. Primary Business Segments  Cement  Ready Mix  AggregateI. Global Brand – High End Specialty Products  EXTRA - bagged cement  Impercem - waterproof cement,  Promptis and Hidratium - ready-mix  Insularis - 100% lightweight structural concrete with superior thermal insulation
    • 3. Situational Analysis I. Fragmented Market - 3,000 SMBs II. Market Size $335.5Bn by 2015 III. 2 Markets identified  Ongoing maintenance of Roads and Infrastructure (East)  State-Sponsored Investment in Infrastructure (West) o Thousands of km of Road o Portion of 36M housing units scheduled by 2015
    • 4. Market Entry StrategyI. Review Five Year Plan (FYP) to determine which provincial markets to enter  Construction growth in western tier 3, 4, 5 cities  Need long term plans o Target west and future FYPsI. Joint venture with controlling interestI. Triple Bottom Line - Use 3-P Strategy ii. People iii. Planet iv. ProfitI. Use western provincial bases to move farther west, and into other central Asian markets
    • 5. Targeted New Markets #1 Market Entry#2 Market Entry Contingency Market Entry  Massive size of China and they need infrastructure
    • 6. 5 Year-Plan determines provincial marketsI. Guanzhong- Tianshui& Kashgar-Xinjiang SEZs • Less market saturation of cement • Few to no multinationalsII. Guanzhong- Tianshui • Proximity to 3 other zones in 200m radiusII. Kashgar- Xinjiang • Future manufacturing hub • Western most railway head • Central China / Asian expansion hub • $1.5 billion in infrastructure next 3 yearsIV. Not a level playing fieldV. Relationships will be more critical then initially anticipated  Guanxi and interpersonal relations  Government and contractors  Ex-pats network
    • 7. Joint VentureI. Be modest and deliberate with western investmentII. Understanding the motivations of working with a Chinese partner (in a JV) be it SOE or Private.  SOE priorities are full employment, fairness and stability  ProfitIII. JV contract written with a buyout clauseI. CEMEX becomes a “Chinese firm for China”  CEMEX for Every China  Co-branded
    • 8. Use 3 P Strategy to gain marketdominance I. People • Job creation • Retaining top talent • Developing new talent • High caliber company that supports local values • Labor rewarded I. Planet • Low pollution plants • Energy efficient plants • High quality cement made locally I. Profit • Brand high profile projects that grow awareness • Brand quality perception is imperative
    • 9. Use “bases” to control neighbor markets I. Use 200 mile radius to compete in other developmental zones II. 3 P Strategy expandable as market concentricity increases III. Use local relationships to link communities, manage rivalries and make successful bids IV. Marketing interchangeable, past success in China is future opportunity
    • 10. Western China production exported intoother Asian markets I. Central Asia’s new silk road II. New markets III. Lower transportation costs IV. Interchange of ideas V. 3 P across borders and new arbitrage
    • 11. China TakeawaysI. A Changing SocietyI. Guanxi and RelationshipsII. Sheer Size and ScaleIII. The Sky is High, the Emperor is Far AwayIV. The Importance of Government

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