Q What is the value that Cemex brings to the host economy Ca

Q: What is the value that Cemex brings to the host economy? Can you see any potential drawbacks of inward investment by Cemex in an economy?

Q: Cemex has a strong preference for acquisitions over greenfield ventures as an entry mode. Why?

Solution

Answer:

1- Cemex is the largest cement manufacturer of Mexico and it has become one of the largest global industries of cement and construction. The cemex brings greater benefits to the host economy by bringing large share of FDI, modern technology and efficient management to make host companies improve their performance to earn huge profits.

Mostly there are no any potential drawbacks of inward investment by Cemex in an economy as it develops local companies of host countries.

2- Cemex has a strong preference for acquisitions over greenfield ventures as an entry mode because Cemex acquired companies in host countries as they were already setup and have good knowledge of local market needs and demographics which helped in establishment of global level markets for Cemex. So Cemex preferred acquisitions over grrenfield as it was less risky and more profitable.