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The goal of this task is to analyze a given case study and assess the issues related to performance and relevance from a corporate entrepreneurial perspective.
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Corporate entrepreneurship can be defined as a procedure which carries on in the existing organization which may result into new ventures of business, the new product, processes or services development, also the strategy renewal as well as competitive stances (Michael H. Morris, 2002). CEMEX, one of the multinational companies in Mexico, was started in the year 1906 by the grandfather of Lorenzo Zambrano (both had the same name). Zambrano started working with CEMEX in the year of 1960 (Ghemawat, 2015).
CEMEX, different from its competitors, was one of the best examples of corporate entrepreneurship as CEMEX was led by Zambrano. Mexico, like several economies that were developing, still did not have much foreign direct investment (FDI). In addition, the majority of the company's investment was in the United States, having exports of more than 80%. Nevertheless, CEMEX bounded this pattern, as, during the 2000s, the company's majority of the sales was from overseas operations compared to other multinational companies in Mexico, additionally expanding its business to Europe and other countries of Latin American. This thoughtful strategy of expansion globally was thoroughly managed and directed by Lorenzo Zambrano, CEO of CEMEX. He managed from the year 1985 until the age of 70, when he passed away, in the year May 2014. Hence, the company emerged as the dominant global player during the past 20 years under the leadership of Lorenzo Zambrano, who with his corporate entrepreneurial insights used the distinctive capabilities in order to build a progressively distinctive company (Ghemawat, 2015). However, there were several issues that were posed due to concentrated leadership by Lorenzo Zambrano, that made the company face problems like debt crisis (Flannery, 2011). This report will study the strategies of CEMEX under the leadership of Zambrano, and further, assess the core issues faced by the company.
CEMEX’s competence is thoroughly tangled to the abilities that the company had built over the years, which includes operational effectiveness, leading the industry, sophisticated knowledge sharing all over the company, long-term development of community and customer relationship, as well as construction-oriented innovation (Ghemawat, 2015). The question that arises here is, how could CEMEX advance and manage such competence? When Lorenzo Zambrano, CEO of CEMEX, entered the company, it was a moderately expanded group of companies. However, Zambrano consciously wanted the entire enterprise to create value. He tapered the horizontal business scope to focus on augmentation of the geographic scope. Cement is usually considered as a product business which affords less scope for fetching the customers in a distinctive way; however, CEMEX engrossed hard in differentiating itself (Ghemawat, 2015). It established a unique cement business, that presented time-based delivery assurances, and formed Construrama, a network of outlets of construction materials (Ghemawat, 2015). There was definitely a 'CEMEX Way' (The Economist, 2001). The company's senior leaders dedicated themselves to foster and maintain the culture of CEMEX. As CEO of the company, Lorenzo Zambrano would check kiln and sales data on an everyday basis. The direct engagement of the top interpreted into a highly motivated, intensive, the enormously competitive work ethos for the whole company (The Economist, 2001).
CEMEX continued to generate the majority of profits from operations in Mexico. Until the years of the 1990s, the primary businesses of CEMEX were concrete and cement, who pursued the differentiation strategy. However, the company under the leadership of Lorenzo Zambrano utilized its idiosyncratic capabilities in developing new ones with the view to fetch the international business strategy. The global expansion of CEMEX turned the company from a small firm to a dominant global player.