CEMEX

1. How did CEMEX fundamentally change the way it conducted its business?

The company improved profitability through by efficient operations. The company

also shifted from selling products to selling complete solutions. With this new

strategy, CEMEX has established a very strong brand and has managed to translate

it into extraordinary profits from a commodity-driven business.

2. How does information systems contribute to CEMEX' competitive advantage?

The company has gained a significant competitive cost advantage over its

competitors by setting up an excellent distribution infrastructure and centralized,

computerized delivery network.

3. What is social capital? How does CEMEX build social capital?

Social capital is a concept in business, economics, organizational behaviour, political

science, public health, sociology and natural resources management that refers to

connections within and between social networks. Though there are in fact a variety of

inter-related definitions of this term, which has been described as "something of a

cure-all"[1] for the problems of modern society, they tend to share the core idea "that

social networks have value. Just as a screwdriver or a college education human

capital can increase productivity(both individual and collective, so too social contacts

affect tthe productivity of individuals and groups". (http://en.wikipedia.org/wiki

/Social_capital) CEMEX build it by supporting the poor people in Mexico.

4. How are the low-income savings characteristics of Mexican society characterized?

People in Mexico with low-income savings don’t have right to use any government

property or allowance. Because low-income families don’t receive regular paychecks

and government grant, within a community, neighbors, families, and friends get

together and form “tandas” or pools formed “tandas” by establishing connections

from their neighbors, friends, and relatives. As the system was huge and complicated

several problems occur in the system.

5. How are the entrepreneurial characteristics of the women in Mexican society tied to

the CEMEX BOP strategy?

The women are the one who joins in the “tanda” or pools. Women are the key driver

of saving in families. As the researcher Patrimonio Hoy, he showed or revealed that

70% of those women who were saving were saving money in the tanda system to

create homes for their families .

6. What did the CEMEX initial market research in Guadalajara discover?

CEMEX discovered that fianancial problem is the most difficult to overcome,

methods of Guadalajara were different from that of other places. If the members did

not pay the agreement therefore the delivery for that will be delayed. The members

can also lose credibility.

7. What is the role of socios in the Patrimonio Hoy system? How important are they in

the making the system successful?

Socios are the actual customers who enroll in Patrimonio Hoy. They form a group

with a limited to three persons only and the reason for that meeting is to have a

stronger relationship to others and be easily in payment discipline .

8. Why do you think it was important for CEMEX to position itself as a complete

solutions provider vs. just another product provider?

Because it’s complete solutions target the large low-income market which is the

majority of Mexico. That the consumer will buy their products and the competitors will

not be able to compete with them.

9. How is the social capital of Patrimonio Hoy promoters related to economic capital?

That the prices of CEMEX like the raw materials are frozen throughout the payment

period regardless of whatever happens to the economy.

10. What, in brief, is the value of Patrimonio Hoy to a) its promoter b) its socios &

partners c) its suppliers and d) its distributors?

1. Promoters do it for a social cause to build social capital and to earn

money by making a living out of it.

2. Patrimonio Hoy helps the poor build homes that might have been a distant

dream otherwise. By offering such value-added services, Patrimonio Hoy has

been successful in earning the trust of the socios.

3. Distributors operated on 15% average margin from the sale of building

materials. Patrimonio Hoy has effectively created a pull for cement, and

CEMEX on the supply side pushes it, enabling the push-pull strategy for

cement sales.

11. What is Patrimonio? Why is this important for the marketing efforts for the Patrimonio

Hoy system?

It is an inheritance or legacy, which saves the property.

12. How can Patrimonio Hoy offer a slightly higher price than its competitors and

maintain a competitive edge?

He can autamates the processes and make it a cost.

13. How does the concept of freezing prices encourage socios to do more business for

Patrimonio Hoy?

They have concerns that thy might encounter in the future and the money they might

use wasn’t enough to do such project.

14. Intuitively, doing with business with a low income group would be riskier than

traditional lending models but it is profitable for Patrimonio Hoy. Why?

Doing such large business but the it has a low price can still have a high income,

because their target people has a huge population in that certain place.

15. What is the role of peer/community pressure in the Patrimonio Hoy lending model?

The group as a whole will pay a late fee of an additional 50% per late socio.

16. How has Patrimonio Hoy changed the consumer behavior in Mexico?

By having this solution the people in Mexico will change their thoughts as they can be a

huge part of the company and the can increase the company’s profit.

17. What are the challenges of the Patrimonio Hoy program?

First, the customer retention is a huge problem because of after a room is done, the

probability of customers returning to build another is not 100%. Second, the socios

cannot afford weekly payments for raw materials and mason fee for construction at

the same time.

18. What does Construmex take advantage of the existing remittance market between

U.S.A and Mexico?

With the distributor of their projects.

19. CEMEX Philippines is exploring the possibility of replicating the Patrimonio Hoy

system in the Philippines. What are the parallels between the Mexican and the

Philippine market?

That here in the Philippines the government or other officials will disagree with Hoy’s

system, because in a certain wants of individuals, their similarities is the people

which low – income people is greater that the high income people.

20. As an IT practitioner looking at the Construmex business model, what IT-driven

systems can you propose to make CEMEX more competitive? (name 10-15)

Inventory system,Payroll system,Supply Chain system,Human Resource

system,Customer Relation Management system, Ecommerce,Fleet Management

system,Manufacturing system ,Procurement system.