1.
Cement is a heavy product, so if being exported, it will be burdened with a big expense of transportation and lead to increase its cost. Moreover, when being exported, it can be added tariffs from importing countries. The importing countries often impose the tariffs to increase cost of imported goods, protect domestic producers, and also to promote the international companies to directly invest into the countries. By investing directly from the foreign countries, it helps to increase jobs, competition with domestic companies, and stimulus of economic development, so the countries often encourage foreign direct investments, rather than imports.
For features of the Cemex, it efficiently developed a system of information technology which could control the production and distribution of cement, which other companies could not be more competent than. The system helped Cemex to be good at customer service, information technology, marketing, and production management. Based on the advantage, Cemex could transfer its skills to an acquired company to improve its performance. Clearly, the acquisition was faster to execute than to establish its own operations.
2.
The system of information technology of Cemex helped to be lower costs and better customer services, so it would bring the system to host countries. Concurrently, it also brought the efficient production. Moreover, as a foreign direct investor, Cemex brought to host countries capital, management sources, and jobs.
It seemed there was Cemex's dispute with the Indonesian government because Cemex had been promised a majority position in the state-owned cement company, but without being fulfilled. Perhaps that was why the Indonesian government was suspicious of the company's intentions. Surely, the dispute affected Cemex's operation in the Indonesian market.
I don't know if Cemex tried to stay in the Indonesia. However, I think a promise also has a value as a contract. Breaking the promise cannot be accepted, but it happened, so Cemex should pull out.
Opening Case: Foreign Retailers in India
1.
For a big amount of the population, the Indian retailing market has a big potential to develop, which was estimated of $500 billion at the time of publishing the textbook. Moreover, the amount of companies which have participated in the retailing market was only 6%. The proportion was too small if compared with the corresponding proportion of China, Brazil, or the United States.
The poor road system was a challenge for the companies because it would lead to the distribution only based on the single trucks which would not gain economies of scale and scope. Another challenge was lack of support of left-wing politicians because they believed the large retailing companies would cause a loss of jobs and small retailers.
2.
Advocates of investment of the large retailing companies believed the companies would positively affect on the India's distribution system such as decreasing the logistic costs. The companies would invest cold storage facilities and warehouses to avoid damages of agricultural products which would bring benefits to farmers. Furthermore, India needs foreign direct investments as a way to develop its economy.
However, the style of coalition government often had changes to avoid its own political risks, which would be serious challenges for investors. Moreover, I think India is a country of complex culture and religion which could have disadvantage effects for businesses.
