The Cemex Way

The Cemex Way

Introduction

This report focuses on analyzing the factors that impact CEMEX to achieve double digit growth as well as some relevant problems and recommendations. The result reveals that innovation leads to faster growth (the basic for sustained double digit growth).

Many factors provide answers as to why CEMEX? innovation can be successful, what aspects its innovation has reflected. These factors including customer-focused innovation, pay attention to the strength of information technology, pay attention to market expansion, innovation upon positioning, innovation that focuses on core business, innovation towards social capital building, and leadership. In addition, these factors will be interpreted in sequence.

Innovation Is the Key to Achieve Sustained Double Digit Growth

Simply put, innovation means a new way of doing something, while from an organizational perspective innovation is defined as the successful introduction of a new thing or method such as valued new products, processes, or services (Luecke & Katz 2003). Innovation leads to faster growth (the basic for sustained double digit growth), and should be the key strategy for the first decade of the twenty-first century (Montt 2008). Companies have to keep innovative in order to gain sustained double digit growth because if companies do not innovate, when customers stop buying their products, processes and services, sales, revenues, shareholder returns, and stock price will drop, and then key employees leave, more customers may stop buying such companies? products, processes and services, and this will further cause sales to drop (Stark 2000).

CEMEX has always kept themselves innovative in operating their business. It can be said that CEMEX? success of gaining sustained double digit growth is a result of their constant innovation. For instance, they renovate the way of delivering concrete by using information technology, which solved the problem of late delivery of concrete that could cause loss to both CEMEX and its customers; the company?s new communication network that is built based on information system significantly improves the efficiency of operations; the Patriomonio Hoy program is the company?s another innovation to pull more customers (located in the low-income family market) into its customer database. Hence CEMENT has been doing their business in new ways through appropriate innovation, which has led to the result of double digit growth for many years.

There are almost no companies that gain sustained double digit growth without certain degree of innovation. For example, Michael Dell?s innovation in PC industry has brought him great success. Dell's sell-direct and build-to-order business model and strategy had provided the company with the most efficient procurement, manufacturing, and distribution capabilities in the global PC industry and given Dell a substantial cost and profit margin advantage over rival PC vendors (Thompson, Strickland & Gamble 2005). Well-known companies like Toyota, McDonald?s, Wal-Mart Stores, Inc, Electronic Arts, are all famous for their innovative spirit that has brought them sustained double digit growth for many years.

The next several sections will focus on why CEMEX? innovation can be successful, what aspects its innovation has reflected.

It is customer-focused: Bain & Company had conducted global management studies to ...