Assignment Sample on Corporate Strategy
1. Introduction
This research analysis is based on corporate strategy by demonstrating the uses of concepts, tools, and other techniques of strategic management. The appropriate use of qualitative data analysis is imposed for evaluating critical analysis. The relationship between effective strategic objectives and operations is demonstrated for implementing appropriate resource planning. The strategic implementation focuses on evaluating the effective impacts over the culture of the CEMEX. The other firms such as stakeholders, social responsibilities, and ethical issues are formulated during the strategic decision-making procedure. The dimensions of strategic analysis are evaluated critically while identifying product and service innovations. Lastly, sustaining the competitive edge of CEMEX is evaluated with appropriate recommendations for future development.
2. Strategic Decision Making
Strategic decision-making theory
- Subjective expected utility theory
Subjective expected utility theory focuses on developing broad ideas for decision-makers to make choices between alternative strategies. As opined by Basieva et al. (2018), Subjective utility theory identifies uncertainties and consequences. The risk present is evaluated thoroughly for mitigating upcoming challenges and issues in the strategic plan. The subjective expected utility theory represents statistical estimations for broad elaboration.
- Prospect theory
The limitations faced in Subjective expected theory are analysed in Prospect theory and focuses on describing choices and outcomes accurately. As opined by Wang, Wang, and Martínez (2017), emergency responses are implemented as per the evaluation of the Prospect theory. The upcoming risks are predicted in Prospect theory that is used for making changes in plans effectively for avoiding uncertainties.
- Satisficing theory
The bounded rationality in the decision-making process is analysed and improved in the Satisfactory theory. As cited by Milutinović, Seipel, and Ahonen-Jonnarth (2021), complex perspectives in the decision-making process are simplified using the Satisfactory theory. The evaluation of limited information and time management is simplified in the satisfactory theory for reaching appropriate satisfactory levels without compromise.
- Operational challenges
Strategic decision-making initially is developed by focusing on the success criteria of the organisation. The day-to-day tasks and operations are operated according to the market requirements and other objectives. CEMEX is facing numerous challenges and issues for attaining survival in the market due to malfunctions and operations of the company. The CEMEX was identified for violating environmental laws of the United States. The shareholders of the company were not maintained properly and after that incident, the US Environmental Agency and Environmental watchdog group took effective measures on the company (Case study).
- Effective measures
The missions of the company and proper guidelines are implemented for setting development goals and structure for the company. The priority list of the company is prepared according to that for executing directions and actions for future development. However, the CEMEX is spending millions of moneys for installing effective modern air pollution control. As per the view of Intezari, and Gressel (2017), an organisation’s strategy analysis helps in developing appropriate decision making. The company failed in developing appropriate air pollution control in the company and due to which the company’s operation made a negative impact on human health. The company was fined for operating hazardous operations in the company. The CEMEX was fined £400,000 in October 2006 in the UK after its dust deposition action (Case study).
- Uncertainties
The CEMEX formulated actions plans and management for strategic perception failed in delegating appropriate roles. The uncertainties with external shareholders made an effective change in the culture and objective abilities of the company. Thus, for balancing earlier hazardous operations CEMEX focused on installing a dust abatement system in the company in April 2007. As opined by Nieto et al. (2019), the decision-making structure is enhanced by computing several effective statistical analyses. Hence, by demonstrating improving operations of CEMEX to the court, the organization appealed for a reduced fine amount to £50,000. After the successful installation of a dust abatement system the overall emission of the company reduced by 80% and it resulted in an effective growth measure for the company. CEMEX’s effective measures and practices were focused on providing a safe environment for humans and imposing concern to human health (Case study).
- Long term strategic plans
The long-term goals set by the company for implementing strategic decision management were disrupted. As long-term goals of strategic decision management focus on implementing eco-friendly operations and the services and products served should maintain zero waste. Protecting the environment and conserving the resources for developing an eco-conscious business is an essential objective of long-term goals of strategic decision management. After operating for several years after installing a dust abatement system, CEMEX had to go through new tests conducted by Unified Air Pollution Control. The test was conducted from June 10 to August 5, 2008, in California for testing the level of chromium VI produced by the company (Case study).
The reported test that was conducted resulted in revealing that there is a high level of chromium VI present, which is also known as hexavalent chromium. Hexavalent chromium is considered an active agent chemical that causes cancer. The harmful chemical agent directly affected the elementary schools and other departments effectively. Due to which CEMEX had to go through severe challenges however, after battling for numerous years in May 2017, the company successfully denied all allegations officially. The company’s narrow beaches and impacts on the environmental aspect were successfully removed and it started to operate in 2017 successfully (Case study).
- Environmental challenges
The organisation’s climate-based risks were demised with appropriate strategic decision making and develop transparency in the company. CEMEX adopted a carbon strategy that focused on producing low-carbon transitions and enhancing its internal operations. CEMEX focused on identifying effective impacts on the environment and imposing financial task forces for resolving them gradually. As per the view of Judge, and Talaulicar (2017), organisational operations and functions get improved by implementing strategic decision management. The CEMEX made a revolutionary improvement by involving digitalization in the industry. The digital platform helped the company in attaining potential customers and regenerate the financial scenario effectively.
CEMEX faced numerous challenges and issues due to the failure of imposing appropriate strategic decision management. Thus, CEMEX initially developed self-reliance functions and operations in the company for accessing every small aspect of the entire business. The digital solution helped CEMEX in generating effective control over and due to which the company could identify malfunctions beforehand and resolve them.
- Digitization
Automation technology has become one of the essential aspects of CEMEX for tracking and management procedures. Thus, it effectively enhanced the strategic decision-making process of the company and helped in growing the company effectively. As cited by Wu et al. (2017), the strategic key factors are the initial steps for attaining development and growth. The cash flows and other operations of CEMEX enhanced additionally after digitization and accordingly, strategic decision-making capabilities improved. The business insights of CEMEX were developed due to detailed information access. The company’s sales force and other services embedded for customers improved gradually.
3. Three-Dimensional Strategic Analysis
Financial strength
CEMEX has an international landscape that demonstrates the purchases and sales of the other companies that are related to the same industry. The CEMEX is financially stronger as compared to other companies and as result, it helped in acquiring numerous big companies. Venezuela is considered as one of the largest companies in the cement industry however it was acquired by CEMEX in 1994. Apart from that, CEMEX has successfully purchased numerous big plants in the year 1995 which helped CEMEX in gaining its financial status. As a result, CEMEX developed as the third-largest cement company from 1997-1999. As per the view of Omopariola, and Windapo (2017), competitive advantages and management strategies develop the financial strength of the company. The company focused on expanding new major purchases in various countries for developing its financial strength. However, after the acquisition of one of the largest cement companies in the US, CEMEX successfully developed its standard and attained a position at one of the largest cement companies (Case study).
CEMEX made numerous international purchases and finally, the company took a major step in the financial field. The company made an acquisition of $5.8 billion to a London-based company and become a worldwide leader. The financial base and strength of the company improved day by day and then it resulted in leading the market effectively. Recently, the company had developed a digital confirmation system in the purchasing structure of the company. As opined by Ramesh, and Ravi (2017), production and manufacturing growth are attained by implementing market experiences. Therefore, CEMEX developed an automated purchasing service for their customers and the service does not require high requirements. The company developed new opportunities for improving financial standards and payment procedures.
Relative market share
The collaboration made with third-party firms present in the market helped the company in performing sustainability assessments. As a result, the environmental, social, health, and safety standards were maintained properly in CEMEX. Thus, the relationship with internal and external stakeholders is enhanced with improvement in ethics and safety in business. As cited by Thurman (2018), various market attributes and policies determine the market share. Due to which CEMEX obtained a powerful financial standard in the market which directly impacted the business structure of the company. The working structure and supplier sustainability program of CEMEX focuses on developing the value chain’s consistency. The sustainability principles, policies, and other relevant practices collaborated with global efforts made an enhancement in the market share of CEMEX. Critical suppliers and business partners of CEMEX have made an essential impact in the core business as the purchases of the market and operations are interlinked.
The complex dynamic competitive edge of the cement industry enhanced the market value and operations gradually. The import and export capacities were imbalanced due to the additional involvement of new entrants in the market. The prices and sale stricture of the market of CEMEX was affected gradually due to numerous emerging factors. The pricing strategies and employee aggression made an essential impact on the market share and accordingly if the requirements are not fulfilled by CEMEX. The possibility of losing sustainable market share increases and thus the growth rate also decreases simultaneously.
Relative Market Strength
CEMEX has an essential market strength due to its reliable products and effective services. CEMEX has developed certain fields such as accessibility, sustainability, and architecture. The responsible social initiatives enhanced the brand reputation and due to which CEMEX obtained additional market value. The company developed several sustainable communities for enhancing architecture scenarios. The self-financing cells of the CEMEX develop low-income facilities for executing typical home building processes. The initiatives executed by CEMEX helped in attaining potential customers and enhanced the networking structure of the products. The technical assistant imposed on the networking structure, optimizing time management and spaces for developing new houses. These effective services and products of CEMEX developed the market position of the company and attained a strong base (Case study).
4. Product and Process Innovation
Product and process innovation is essential for all companies to improve working effectiveness and to build a strong brand image near target and new consumers. Product innovation is a strategic technique to improve the quality of goods and services in a new significant way to include new characteristics. Process innovation is another effective procedure that can be described as a significant development in the production and delivery of goods.
Product innovation technique
Product innovation has included effective development in technical matters, raw materials and required goods, software techniques, user-friendly functional activities. This effective technique can be segmented into three appropriate sections, as follows.
- New products
New products and effective utilization activities of those newly implemented goods can be an effective procedure to enhance product innovation. Based on customers’ requirements, their using process and demand of existing goods can be a huge reason to include innovation in products (Xie, Huo and Zou, 2019). Including software technologies in old goods and developing working effectiveness will enhance product innovation in existing markets or new markets on an international level.
- Provision of service
The addition of new functionalities in existing customer service of old goods and implementation of new services is an appropriate way to enhance product innovation. Effective customer services can be helpful to upgrade product demands and new requirements should become necessary for consumers.
- Development in the utilization of products
Developing the utilization process in exciting goods as per the requirements of consumers is an effective strategic way to upgrade product innovation. According to Xie, Huo and Zou (2019), considering minor changes in the technical specification is an effective part of product innovation. These changes in utilization procedure are mainly focused on customers’ requirements and meeting those demands efficiently.
Process innovation technique
Process innovation can be stated as the inclusion of effective changes in technical factors and enhancement of software purposes. This innovation in the process has covered cutting down production and delivery expenses. A significant increment in the quality of goods and delivery of developed products are the main objectives of process innovation. This beneficial procedure can be distinguished in two appropriate sections, as follows,
- Production procedure
Innovation in the production system has been implemented through proper technique, new materials and inclusion of software techniques. As opined by Najafi-Tavani et al. (2018), the application of modern technologies of automation procedures can be helpful to reduce time and cost in production. Moreover, production in less time and expenses can be an effective path to enhance the profitability of a company.
- Delivery procedure
Delivering goods to consumers should be made more efficiently to meet the demands of customers. Delivery should be covered in less time and efficiently to improve consumer services (Najafi-Tavani et al. 2018). Additionally, unique strategies should be implemented at the time of receiving payment from consumers in a global pandemic situation.
Strategic implication and analysis
Cemex company has taken initiatives to develop digital technologies in serving consumers to achieve better performance. Moreover, this company has guided customers to build up sustainable cities keeping an effective alignment with UN social development goals 9 and 11 (Cemex.com, 2021). Implementation of new innovative models to bring effective improvements in products, processes and customer services has been maintained by this CEMEX company. As stated by Rahmah et al. (2020), the management of this company has focused on understanding consumers demands and perceptions to stimulate the path of gradual improvement. Customer experiences have been abruptly developed in the year 2019-20 that has guided CEMEX to achieve 68 NPS points in 2020 (Cemex.com, 2021).
Cemex organization has tried to implement a win-win model to meet customers profit with organizational development (Cemex.com, 2021). Effective inclusion of win-win models has helped to achieve higher profit in the session of 2019-20. With proper innovation in product and process, employees of this company have become available to deliver 24*7 hours consumer services (Romero et al. 2019). Maintaining proper rules and restrictions in pandemic situations, Cemex has delivered required goods and raw materials to their existing consumers and with modern promotional activities, they can gather a huge number of new consumers. Focusing on artificial intelligence and automation technology, this organization can sustain production systems more quickly in less time duration.
Innovation in products and solutions, the company has enabled efficient sustainable infrastructure for urban citizens of the UK. Additionally, Cemex has followed UN social development goals 13 and 15 by contributing an effective focus on climate action and life on land (Cemex.com, 2021). The construction group of this organization is trying to meet SDG 12 to enhance productivity and foster a supply chain with innovative and creative ideas (Cemex.com, 2021). Cemex has kept an eye on unique steps to manufacture raw materials in company premises and utilization of effective solutions in cement production.
Self-chemical admixtures of raw materials have concreted the loyalty of existing and new consumers towards this company. According to Witell et al. (2017), this organization has maintained the supreme quality of raw materials and delivered effective goods by keeping a positive connection with modern technologies. In the year 2020, the company will have delivered 53% of cement manufactured from its own company (Cemex.com, 2021). Moreover, they are focusing on increasing the percentage of self-made cement to achieve sustainability in the global market.
5. Sustaining Competitive Advantage
Cemex has become capable of sustaining competitive advantages and has created a highly competitive environment for rival companies Heidelberg Cement, Votorantim Cimentos and Unibeton Ready Mix. There are several key steps to enhance sustainable competitive advantages, those are essential to reinforce productivity improvement (Mishra, 2017).
1) Cemex has to understand the target market and segment those consumers based on several factors while focusing on delivering effective customer service.
2) Develop a clear understanding of consumer demand and establish an appropriate strategic path to grab the attention of new and existing customers before rival companies.
3) Cemex has to work on key factors to redevelop value proportion in making the pricing system, brand development and consumer services good.
4) Management of Cemex company has to be aware of their strengths and weaknesses and construct a good business model to get proper support from customers and stakeholders.
Organizational structure has positively impacted Cemex organization by implementing higher effectiveness and helping existing employees potentially. Moreover, global policies of business have been included to maintain consistency in the working environment (Cemex.com, 2021). Management has provided good incentives and working rewards to stimulate the working performance of employees of all sectors. Moreover, incentives and rewards have played an effective role to inspire and motivate workers to conduct efficiently and deliver huge productivity to Cemex in long-term development. According to Kimura (2019), diverse workplace and employee engagement have worked to sustain competitive advantages inside this organization. Additionally, leadership effectiveness has created an efficient organizational culture by maintaining alignment with the training and development of employees.
Politics has a moderate impact on Cemex company to sustain competitive advantages, rules and regulations implemented by the UK government have created various opportunities for this company to gather stakeholders and maintain CSR strategies. Along with this, the UK government has guided this organization by delivering donations and sponsorships to upgrade working effectiveness (Radjenović and Krstić, 2017). Moreover, local political leaders and women empowerment groups have worked as passive promotional workers to increase the productivity of these organizations. Besides that, the anti-corruption group has effective control over Cemex to govern corruption activities and notify management about those (Cemex.com, 2021).
Stakeholders have an effective influence on this organization to develop sustainable competitive advantages. Good relationships with shareholders and proving them beneficial rewards have helped this company to gather a huge number of local stakeholders. Heidelberg Cement, Votorantim Cimentos and Unibeton Ready Mix are unable to maintain good relationships with stakeholders and due to less interaction with higher executives’ stakeholders have lost their patience (Cemex.com, 2021). On the other hand, chief executives have conducted virtual and live meetings with shareholders in a regular manner.
Cemex company has focused on social responsibilities, based on their corporate social responsibilities organizations has a positive social impact on their working performance. As opined by Beekun and De Carvalho (2021), the management of this company has promoted four effective pillars of social developments and enhanced consumers engagement in those promotional activities. Focusing on the employment crisis, Cemex has promoted education and learning development with new technological trends and achieved good employability in the following years. Additionally, a strong infrastructure and a highly mobile system have helped to maintain sustainability (Cemex.com, 2021). Moreover, environmental innovation with social entrepreneurship has guided competitive advantages over Heidelberg Cement, Votorantim Cimentos and Unibeton Ready Mix. Environmental protection, a healthy and safe culture for employees, stakeholders and consumers have supported Cemex to achieve advantages to maintain competitive sustainability.
Ethical issues of Cemex company have helped this company to gather competitive advantages in the building materials industry of the UK. According to Özcan, Mondragon and Harindranath (2018), higher executive and management has focused on the health and safety factor of employees and ground-level workers. These safety factors have guided proficiently in maintaining better relationships with workers. However, due to the COVID-19 pandemic situation, this company has paid ground-level workers and insisted them to work sagely and maintain health issues.
5.1. Recommendation
According to the discussion on sustaining competitive advantages, Cemex company can maintain a much better situation in the building material industry from nearest rival competitors Heidelberg Cement, Votorantim Cimentos and Unibeton Ready Mix. However, it can be recommended that Cemex should maintain good company policies through overall factors (Beekun and De Carvalho, 2021). Control over organizational structure will easily develop the effectiveness of working performance of employees. Due to effective working performance, companies will sustain good relationships with consumers by meeting their requirements. Additionally, sustaining a good bonding with the UK government, local leaders and political groups can be beneficial to achieve free passive promotional activities.
Besides that, shareholder relationships should be maintained efficiently and this company will deliver good benefits to investors to achieve a huge number of local stakeholders. Along with the above recommendation, Cemex has to control CSR highly to stay one step ahead of rival companies. Besides that, maintaining proper ethical issues, safety and health factors will be beneficial to attract a better percentage of workers in the following years. Although Cemex can beat competitors at a high rate, with this recommendation the company will have fruitful working performance throughout all sectors.
6. Conclusion
Based on this report, Cemex company can maintain good relationships with stakeholders and consumers. Controlling over good working performance, this organization has created competitive advantages from competitors Heidelberg Cement, Votorantim Cimentos and Unibeton Ready Mix. The strategic decision-making process and three-dimensional strategic analysis of financial Strength, relative market share, relative market strength have been covered in this report. Moreover, innovation on product and process techniques has been implemented to expand the limits of this company.
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