Intrnational Business strategy - Essay Example

By May 2000 they had expanded into several developed countries through acquisition. In May 2000 they planned to aggressively expand into emerging economies in South East Asia, Africa and Middle East. Their initial focus was India, China, and Brazil. However, they always wanted to have 100% stakes or at least the controlling stakes in any nation. Some of their earlier acquisition strategy was not profitable because their approach was to have a global strategy. They always aimed at total control but this may not always be desirable in all emerging markets.

In emerging markets, the established MNCs would generally make an early entry especially in the high-performance industrial segments (Ghemawat & Hout, 2008). India may be an emerging economy but there are already 28 competitors and the eight largest companies take care of two-thirds of the total demand of 100 million tons. CEMEX stands a better chance in China where the technology is obsolete and the size of the market is large. In China they can adapt and innovate in a big way. However, entering the emerging economy does not provide cost advantage any more.

It is essential to have higher value-offerings and better customer services. CEMEX has been focusing on markets with high population and strong growth potential. Besides, they want to lead the market or have at least 25% control of it. This may not always be the right strategy as Cummins has entered India and China with a local partner with equal partnership (Ghemawat & Hout, 2008). Cummins is not interested in full management control and their focus is on good partner sharing the same values.

This enables them to take advantage of the local knowledge and standing of the local partners. This helps the MNC to create value beyond profits. Local partners are beneficial as they help to overcome the barriers to language and local customs. CEMEX’s past acquisitions brought them as close as 100%