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Lafarge-Aget Heracles - Case Study Example

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Lafarge-Aget Heracles

Lafarge- Aget Heracles is one of the leading producers of cement. The company has not been able to witness rapid growth within the industry. Some of the problems which are acting as major setbacks to the growth of the company are inability to offer a differentiated product line, huge freight costs added with under utilization of capacity. Out of these problems, the most vital being the inability of the company to offer diverse products which might become one of the principal causes leading to a huge loss of market shares. The company needs to address this problem and the consequences it may suffer as a result of this persistent problem. To strengthen its competitive edge in the market, the company needs to innovate its product line with the help of sophisticated technologies. Though other problems also needs proper resolution, but in this report we limit our scope of study to the analysis of one of the most crucial problem faced by the company which is inability of offering a differentiated product line.
One of the biggest problems challenging Lafarge - Aget Heracles is their inability to differentiate their product line. The need of a differentiated product line was constantly felt within the cement industry and Aget, being one of the major players of the industry, was very much aware of the fact. To build a niche in the market, it was becoming necessary for Aget to innovate its product line. The need of environment friendly cement mixtures and specialty cement was becoming ardent. To ensure rapid growth in an industry, businesses need to adopt strategies to render higher customer satisfaction and offer value-added products and services. Aget was falling back on this aspect. Looming under its huge cost structure, it was felt that Aget was not keen on implementing innovation strategies. This was becoming an absolute necessity for Aget in order to strengthen its competitive edge in the industry as a whole.

Aget was not able to develop its existing product line or offer new products and was becoming unable to meet the changing needs of the customers. For example, government institutions were demanding certain kinds of cement mixtures and specialty cements which would be environment friendly and would not contribute to the depletion of natural resources. With the development of the infrastructure industry in various regions across the world, for example in the middle-east, the demand for a special type of cement was becoming more and more apparent which would ensure greater durability to the infrastructure. But like other cement manufacturers across the world, Aget seemed to underestimate the need of an innovative product line as it ...Show more

Summary

The report identifies the underlying problems that are retarding the rapid growth of Lafarge-Aget Heracles in the competitive market. Out of the several issues challenging the future growth of the company such as huge transportation costs, underutilization of capacity and fuel problems, the one identified for subsequent analysis and can be regarded as the most important threat to the company's growth is the inability of the company to have a differentiated product line…
Author : jazminstreich
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