Cast in concrete? 4 Global sales growth lessons from Cemex

Ed Marsh | Apr 15, 2015


The Cemex Way

Strat&Biz recently published an interesting article on Mexican/Global cement giant Cemex.  It's an interesting read, and some may assume that it's not pertinent to their industry/company size or some other metric that they think uniquely defines them.  But it's a great business study - and embedded in it are four important lessons about global sales growth that apply to any company.

Inorganic growth

in 1990 Cemex was a strong, regional player.  It's rapid growth only came once they acquired some international players.

Too many companies assume that their only viable path to global sales growth is organic and incremental.  That's certainly one route - rather conservative and gradual.  But success in some markets is based on relationships forged over years; others have large trade barriers for importers to overcome; and some required particularly intense local market knowledge.  JVs and acquisitions can be a great approach to market entry in those cases, and when it's accretive the impact can often be easily managed.  

Think that's an approach only for big companies?  Think again.  There's actually an industry around due diligence on small, international M&A.  Just because you're only a $20MM company doesn't mean you can't reasonably "buy" your way into attractive markets.

Localized products

Different markets are just that...different.  The products which are appropriate in one, are often not (at least without some localization) in another.  Companies need to recognize that and adapt appropriately.

And although price is one factor to consider, it's not the most important.

Export as a defensive move

When did Cemex get serious about global sales growth?  When NAFTA was looming and they realized that their local strength in Mexico wasn't likely adequate defense against a large North American competitor with easier access to the market.  Their solution was to grow beyond Mexico.

That's something US companies need to consider now.  As the USD strengthens, and import products are rapidly discounted in local USD pricing as a result, companies will face stiffer competition.  That's a perfect time to keep foreign competitors busy defending their home markets rather than just hunkering down and trying to resist margin compression!

Lessons learned abroad boost business at home

Cemex has a built a worldwide knowledge management system to share lessons which are learned in disparate markets but have value in others.  From expertise that shifts product sales into 'systems' & consulting (a form of ueber localization) to global sustainability achievements built on isolated practices, Cemex mines local market experience and acquisitions for lessons and practices that will enhance operations in other markets.  

While they've built a global network to support this, and systemically incorporated it into their corporate DNA, the opportunity exists for every company.  From looking to LatAm markets for insight to succeed with the growing Latino population in the US domestically, to more product specific use cases which can be adapted for domestic success, exporting not only drives global sales growth directly, but also helps companies sell more at home.  That's a win-win.