CEMEX
- How did CEMEX fundamentally change the way it conducted its business?
They cited some of the sources of their own competitive advantage. They continued innovation in their business. They have high level of commitment to customer service and satisfaction. They acquired the digital evolution which is efficient production, distribution, and delivery processes through their sophisticated information systems and lastly their ability to identify high-growth market opportunities in developing economies.
- How does information systems contribute to CEMEX' competitive advantage?
The company enhanced their productivity and they were able to manage the company’s operations more efficient when the CEMEX acquired new information systems. The company achieved it competitive cost advantage over other competitors by making up a distribution infrastructure and centralized, computerizing the delivery network wherein every truck is monitored in real-time so that deliveries would be on time and they won’t be receiving complaints regarding their deliveries.
- What is social capital? How does CEMEX build social capital?
Social capital is all about helping the lower classes and the CEMEX Company should maintain their word, honor and reputation. All they need to enroll is to promise to be consistent about making weekly savings payments.
- How is the low-income savings characteristics of Mexican society characterized?
The Patrimonio Hoy system will become effective when the families have spare money left to save they can put it into the pool once a week or intervals. Members can bid for the pool by deep discount or win the pool through lottery. The pool is used for unanticipated family emergencies, education and housing.
- How are the entrepreneurial characteristics of the women in Mexican society tied to the CEMEX BOP strategy?
The women are the ones who have the entrepreneurial instinct in the family. Women are the ones becoming responsible for all the savings and she is the one who were able to allocate some money that eventually they used for housing purposes.
- What did the CEMEX initial market research in Guadalajara discover?
They discovered that in Guadalajara the social and economic profile of low-income communities are the biggest in numbers, second CEMEX is loosing its stronghold in the second largest city in Mexico and third the home of the people there all seems to be under construction. They also discovered that the homes are composed of clay and limestone. CEMEX had to find other ways for the growth in Guadalajara.
- What is the role of socios in the Patrimonio Hoy system? How important are they in the making the system successful?
The socios are the partners and they re the customers who were enrolled in the Patrimonio Hoy system. These socios are groups of people composed of three members in a group. It is structured to have only three people so that there is a discipline in the members and much easier to for payment. The groups are formed to help each other during emergencies.
- Why do you think it was important for CEMEX to position itself as a complete solutions provider vs. just another product provider?
It is important to place themselves into a new solution provider to make a new image that will be patronized by the people. If CEMEX will not plan any innovation with the old things that they are practicing and would jump to becoming a new product then people will tend to ignore their company because it does not have any other special abilities that differ from other companies.
- How is the social capital of Patrimonio Hoy promoters related to economic capital?
This system encourages more promoters to bring a lot of committed socios to them. The promters are there to invite people to join this saving-credit system to help the people and in return the promoter who is responsible for the new comer will have points or commissions.
- What, in brief, is the value of Patrimonio Hoy to a) it's promoter b) its socios & partners c) its suppliers and d) its distributors?
- Promoters of of Patrimonio Hoy are the ones who are recruiting or identifying prospective customers and they are the one who educate those who are not yet part of the Patrimonio Hoy system.
- The thing that they need to build with the socios is the trust since for the poor people; it will be hard to make them believe that they can build their houses for a short period of time. The socios and the partners are the one can be considered as the much loyal customers or members of the Patrimonio Hoy system.
- They negotiate with their suppliers in their three key factors. First is by generating a steady demand for materials. Second is they create consistent revenue stream and third is they are ensuring zero-risk collection of money.
- They negotiated with the percentage that the distributor will get but they still compromised that even the percent will drop by 3%, it will ensure them continuous business because of the steady demand for orders.
- What is patrimonio? Why is this important for the marketing efforts for the Patrimonio Hoy system?
Its innovative approach reduces significantly the cost and time needed by the poor to improve their housing in lesser time span. Patrimonio Hoy is a program targeting the housing needs of the low-income population by CEMEX, a major Mexican company and a leading global cement producer.
- How can Patrimonio Hoy offer a slightly higher price than its competitors and maintain a competitive edge?
They are targeting the Bottom of the Pyramid market and if they will just continue lowering their price and at the same time giving the benefits of the Patrimonio Hoy they cannot cover up for the privileges that they are giving the low income classes. They can also add service to the people so that this will cover for the slightly increase of prices.
- How does the concept of freezing prices encourage socios to do more business for Patrimonio Hoy?
It is encouraging the socios or the people because they know that the money that they are saving will still be enough when they decide to use it since the price would not fluctuate and will be constant. They would just have to contribute at a given period.
- Intuitively, doing with business with a low income group would be riskier than traditional lending models but it is profitable for Patrimonio Hoy. Why?
They established three important factors. First is the group commitment. Second is the social capital and third is the penalty fee structure
- What is the role of peer/community pressure in the Patrimonio Hoy lending model?
The Patrimonio Hoy will be having two individual or partners in one group if the partner was unable to pay for the amount that he promised then he will have a penalty of fifty percent and the late payments are also having a hard time of having a credit.
- How has Patrimonio Hoy changed the consumer behavior in Mexico?
They gave the low-income hope and chance that even though they have only low incomes they still have the rights of having a house and living in their own comfortable homes. The Patrimonio Hoy helped the people to save money for their future needs.
- What are the challenges of the Patrimonio Hoy program?
The challenges that they have is the consumer retentions. It is not because of the products and service but it is because of the virtue. When people are finish with building a part of their homes they will stop the construction. It is not always a 100% chance that they will still coninue extending or expanding their homes. It is a huge challenge for CEMEX to keep their clients up to the longest time they can to motivate them to continue building homes or rooms and continuing with the program.
- What does Construmex take advantage of the existing remittance market between U.S.A and Mexico?
The main purpose of Construmex is not for profit but for general awareness and for the education of the people and also for the marketing of the company. The Construmex allows the Mexicans living in the United States to send their money directly to cement distributors in Mexico.
- 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?
There are a lot of Filipinos who also want to have homes but they are not capable of building one. If they will be offering the Patrimonio Hoy here in the Philippines, they will offer new doors for the low-income Filipinos to have their own homes. Philippines and Mexican market are quite the same especially if they will both cater to the ones who are low in income.
- 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)
· Supply Chain Management
· Human resource information system
· Customer relationship management system
· Decision support system
· Knowledge management system
· E-commerce website
· Transaction processing system
· Order tracking system
· Inventory control
· Sales and Inventory system
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