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Seminar in Management

“Strategy Formulation in Multinationals

Corporate while Deciding for

Expansions”

A thesis submitted in fulfillment of the requirements of MBA degree

Supervised by: Dr. Sania El Galaly

Submitted by: Kamel M. Saifalnasr Kamel Abdullatif

Count of words: 3016 words

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TABLE OF CONTENTS

ABSTRACT 3

KEYWORDS 4

INTRODUCTION 5

LITERATURE REVIEW 7

RESEARCH METHODOLOGY 20

CONCLUSION 21

REFERENCES 22

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Abstract

Strategic management is about managing the future, the word “strategic” as we used to hear it

always referred to something with long term impact or implementation. And therefore effective

strategy formulation is crucial, as it directs the attention and actions of an organization and

individuals in that firm, even that in many cases actual implemented strategy can be different

from what was initially intended, planned or thought. But this is normal especially in

multinationals as their exposure is very different and very wide.

Add to this the case of expansion, what if they decided or just started to think how to expand? A

lot of questions would follow like why to expand? How to implement the expansion? Where to

expand? And most important what is our strategy for the expansion and how we gonna formulate

it?

Today, firms need to strive with competitive challenges and barriers related to innovation,

proactive responses, knowledge accessibility, etc. by means of effective and dynamic strategy

formulation.

The purpose of this paper is to investigate the strategy formulation process for the firms that are

seeking after expansion. In order to evaluate the process we gonna define each aspect of the title

and demonstrate the link between strategy formulation, multinationals corporate and expansion

decisions.

The findings of the study offer multi-perspective reflection on strategy formulation. Such

reflection is assumed to enable us as “Students” and managers in the future to proactively

evaluate the potential outcome of the chosen strategy.

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Keywords

Strategic Management, Strategy Formulation, Corporate, Firm

Expansion, Expansion Strategy, Decision

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Introduction

Strategic management is a complicated process that once implemented can lead to higher profits

and ease the obtaining of the competitive advantage.

Today’s dynamic external environment puts a huge pressure on every manager’s shoulder when

it comes to create the best strategy on which the entire company has to rely on and especially in

deciding for expansions and the intended strategy to pursuit that expansion .

To deal with these constrains a lot of thinking has been done in the past years and many

approaches that can be used in the development of the strategic management process have been

identified.

Within this context one can easily see the utterly importance of well designed strategy.

The formulation phase is just one of those elements without the strategy cannot work in practice.

Thus, the assessment of strategy formulation becomes crucial for both practitioners and

researchers in order to conduct and evaluate different formulation processes. Judging from the

literature, formulation of a particular strategy can be only be examined reactively, by examining

the strategy outcome after a period of time.

However, practitioners need greater confidence that their chosen strategic expansion decisions

are going to lead to successful results. Starting from this point, we strive to elaborate upon a

proactive assessment tool of strategy formulation processes that ensures high quality in process

and outcome.

I was interested in how the managers are filling about this important step in the strategic

management process, so I developed a questionnaire that was applied to a sample of managers in

CEMEX where I work as “Sales Executive” while I was investigating some particular aspects

about the formulation of strategy in CEMEX.

This paper is structured as follows: it starts with a literature review on the strategic management

process that is followed up by a thorough presentation of the formulation phase. During this

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stage the research questions are being hypothesized and a brief description of the research

methodology follows.

The paper continues with a discussion of the most relevant findings of the survey and ends up

with some conclusions regarding the advantages and the drawbacks of the strategy formulation

process within the expansion stages.

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Literature Review

During time, many scholars tried to define the strategic management. We have reached by now a

considerable number of definitions regarding strategic management, yet there exists little

consensus about the similarities of such definitions. Ohmae’s (1982) ideas of strategic

management offer a simple but robust initial definition. He draws attention to three key groups –

the corporation, the costumer and the competitors. Strategic management might be defined,

therefore, as the pursuit of superior performance by using a strategy that “ensures a better or

stronger matching of corporate strengths to customer needs than is provided by competitors”

(Ohmae, 1982: 91). Other remarkable contribution to the development of strategic management

theory is that of Pettigrew and Whipp (1993) who also make the point about the importance of

properly linking strategic and operational changes. Strategic intentions should be broken down to

what they call actionable pieces, made the responsibility of change managers. Joyce and Woods

(2002) consider strategic management as being a difficult process in part because it requires

contradictory qualities and skills in dealing with paradoxical demands of situations. Indeed,

strategic management is not one of the easy tasks managers have to accomplish. Moreover, the

success of the strategy will rely on the ability of every strategist responsible of the

implementation. In fact, Charles Handy, an influential management writer explains the role of

the each management type and points out how the qualities and skills of different types may be

present in single individuals, who have to bring together in complementary ways to deal with

strategic tensions they confront (1991). Handy uses Greek myths and gods to personalize the

four manager types that he describes in his book “The gods of management” (1991). The

strategic management process consists of the following steps: (1) analysis of the external and

internal environment; (2) strategy formulation; (3) strategy implementation and (4) strategy

evaluation (Borza et al., 2008). Some authors make a clear distinction between strategic

management (which is a term used especially in the academic world) and strategic planning (a

term that was coined within the business world which is associated with the formulation phase).

Figure 1 shows the specific elements that comprise the strategic management process. Figure 1:

The strategic management model Source: adapted from Wheelen and Hunger, 2006: 11

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The strategic management process starts with an analysis of the internal and external

environment of the company. The role of this analysis is to determine which are the strategic

factors that determine the future direction of the company. The external environment consists of

those elements that are not controllable by the managers that form the context in which

companies evolve. On the other hand, the internal environment includes the variables within the

company (for example organizational structure corporate culture and the resources of the

company). This first step usually ends up with the development of the SWOT analysis which will

briefly include the strengths and weaknesses from the internal environment and the opportunities

and threats from the external environment. As Figure 1 shows the strategic management is a

continuous process that contains also a feedback phase suggesting that while the companies goes

through all the steps it is possible to correct some of the decisions taken earlier or even changing

the desired strategy. Strategy implementation deals with establishing the annual objectives,

policies, programs, staff motivation and resource allocation in order to facilitate the strategies.

During this phase, the strategists will try to determine every employee and manager to work

together in order to transform the strategies into coherent actions. The following decisions are

taken within this phase (David, 2008: 263): the creation of an organizational culture that will

sustain the strategy; the creation of the marketing budget; the establishment of company budget;

the development and use of the informational systems and the correlation of employees’ salaries

with the company’s performance. Strategy evaluation offers managers valuable information

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about the way in which the strategy proved its efficiency. Managers will compare the results with

the goals established during the first phases of the process. This is a step absolutely necessary

because actual success of the current strategy is not a guarantee of the future success. The

dynamics of the external environment will determine changes in the context in which companies

act. Strategy evaluation includes the following activities (Borza, 2008: 19): (1) the analysis of the

internal and external factors on which the strategy has been developed; (2) the assessment of

company’s performance and (3) implementing corrective actions. Strategy formulation consists

of determining the organization’s mission, goals, and objectives and selecting or crafting an

appropriate strategy (Figure 2). Strategy formulation involves much research and decision

making, yet it is primarily a process to answer the question, “How are we going to accomplish

our goals and get where we want to go?” Before this question can be asked, however, the goals

and objectives must already have been determined. Essentially, crafting the strategy can be

thought of as a continuous effort to develop a set of directions, draft a blueprint or draw a road

map. Strategy formulation is influenced by many factors, including:

(1)Evaluating the internal and external organization (especially the projected future

environment);

(2)Establishing the predetermined mission and goals of the organization;

(3)Setting the organization’s strategic policies or guidelines; and

(4)Assessing the needs, values, and skills possessed by those who develop the strategy. The same

factors influence development of the strategic objectives (Alkhafaji, 2003).

Most large organizations these days have mission statements. Usually a mission statement is

defined as being a formal expression of an organization’s purpose. This may be distinguished

from the strategic vision, which is a description of a desired future state, and strategic goals,

which are specific outcomes that contribute to the achievement of the mission in the

circumstances that prevail or are emerging (Joyce and Woods, 2002). The importance of the

mission statement is that it leads to focus and persistence by the organization and these things are

generally assumed to be important for organizational achievement. It may also be argued that

mission statements and strategic visions are important for motivating and inspiring managers and

employees within an organization. The development of mission statements and strategic goals

can be useful as one approach to developing systems for evaluating strategic effectiveness

(Figure 3). In the devoted literature the terms objectives and goals are used interchangeably

(Sadler, 2003). Strategic objectives are normally ones to be achieved over the medium or long

term. They may be financial such as a certain increase in earnings per share or non-financial such

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as a percentage increase in market share. In theory they should be capable of being quantifiable

and hence susceptible to measurement. Strategic decisions are ones that are of fundamental

importance to the business, but will not prove to have been right or wrong for some considerable

time. Strategic decisions are normally such that they are irreversible or at least can only be

reversed at considerable cost. In the context of company strategy, policies are rules or principles

that are regarded as an integral part of the company’s success model; they are practices or ways

of doing things, often long established, that are seen as indispensable parts of the company’s

According to Bogner and Thomas (1993), there are two competing models of strategy

formulation. The objective model is based on economic concepts (i.e., supply and demand,

competition factors, etc.). The model begins with a company objective, which will finally be

affected by competition. The competition will have an impact on strategy formulation process.

The industry structure (combined competitors) will directly impact the formulation process,

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which in turn will affect resource allocation decisions. This process will continue until an

external factor (i.e., technological change) will disrupt it, at which time a new objective model

will be formulated. The second model is the cognitive model. It exposes a flaw in the objective

model (i.e., the inability to capture the significance of the changes causing the objective

formulation process to begin again). The cognitive model follows the sample principles as the

first model. However, it also consists of a collective view of objective strategies, which are

consolidated into one formulation process. This process is to define one’s one place in the

industry and cognitively organize one understands of competitive strategy (Bogner and Thomas,

1993).

The second part of the research title is the multinational corporation or worldwide enterprise

which is an organization that owns or controls production of goods or services in one or more

countries other than their home country. It can also be referred as an international corporation, a

"transnational corporation", or a stateless corporation.

The actions of multinational corporations are strongly supported by economic liberalism and free

market system in a globalized international society. According to the economic realist view,

individuals act in rational ways to maximize their self-interest and therefore, when individuals

act rationally, markets are created and they function best in free market system where there is

little government interference. As a result, international wealth is maximized with free exchange

of goods and services.

To many economic liberals, multinational corporations are the vanguard of the liberal

order. They are the embodiment par excellence of the liberal ideal of an interdependent world

economy. They have taken the integration of national economies beyond trade and money to the

internationalization of production. For the first time in history, production, marketing, and

investment are being organized on a global scale rather than in terms of isolated national

economies.

Anti-corporate advocates criticize multinational corporations for entering countries that have

low human rights or environmental standards. In the world economy facilitated by multinational

corporations, capital will increasingly be able to play workers, communities, and nations off

against one another as they demand tax, regulation and wage concessions while threatening to

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move. In other words, increased mobility of multinational corporations benefit capital while

workers and communities lose. Some negative outcomes generated by multinational corporations

include increased inequality, unemployment, and wage stagnation.

The aggressive use of tax avoidance schemes allows multinational corporations to gain

competitive advantages over small and medium-sized enterprises. Organizations such as the Tax

Justice Network criticize governments for allowing multinational organizations to escape tax.

For example, British Petroleum, General Electric, Toshiba, and Wal-Mart are multinational

corporations with extensive business activities that span across the globe. Sometimes financial

analysts use the term, multinational enterprise because a government could form a joint venture

with a corporation, and the definition of an enterprise implies a broader meaning.

A multinational enterprise's goal is to earn profits. Therefore, they enter the international markets

and foreign countries in the pursuit of profits. Every international enterprise has a choice. It

could export to another country or relocate production outside their home country. For instance,

many U.S. corporations relocated manufacturing outside the United States, although the U.S.

suffers from a high unemployment rate since the beginning of the Great Recession.

Financial analysts and economists divide the world's markets into mature economies and

emerging markets. Mature economies are competitive, and a company entering this market

would face narrow profit margins. Some examples include the United States and Europe. On the

other hand, the emerging-market economies are countries that recently opened their markets to

international trade and finance. They can be very profitable but entail greater risk. For example,

China, India, and Mexico are removing their government controls of their markets, and they

allow international investors and corporations to invest in their economies.

A government that attracts foreign investment must change its laws to reflect three requirements.

First, a government establishes an open-marketplace that means a government allows free

markets and allows the free movement of capital, labor, and technology. Thus, a government

relaxes its control over its market. Second, a government allows strategic management. Thus,

companies can develop new products and services, and compete with other companies.

Furthermore, a multinational enterprise could tailor its goods and services to accommodate

different cultures and tastes. Finally, multinational corporations need access to capital because

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international activities require financing. Hence, a country must allow the free movement of

money, and corporations are free to issue more stock, bonds, or receive bank loans without

government interference. Consequently, a firm has twelve reasons to relocate production to

another country, rather than to export.

Reason 1: A foreign government offers subsidies and tax breaks to a company. Some countries

such as Dubai (United Arab Emirates) and China have free-trade zones, where companies pay

little or no taxes, experience few regulations, and can freely export their products and services to

the international markets. Consequently, some governments offer incentives to companies

because they want to create jobs and reduce unemployment and poverty rates.

Reason 2: A company gains access to technology from another country. For example, India has

talented computer programmers and engineers, who work for relatively lower wages than their

counterparts in the United States and Europe. Consequently, a company could relocate to India to

tap into their skilled workforce.

Reason 3: An enterprise that moves its factories to a foreign country automatically avoids trade

restrictions, like tariffs and import quotas. Government does not apply trade restrictions to

products and services produced within a country.

Reason 4: A company relocates its manufacturing facilities to reduce transportation costs. For

example, sugarcane is bulky and expensive to transport. Consequently, sugar producers locate

the sugar mills close to the sugarcane fields. Then they extract and purify the sugar and ship it to

distant markets.

Reason 5: A business gains access to new markets and more consumers. For instance, the Coca-

Cola Corporation produces and sells its carbonated soda products in most countries around the

world, boosting its consumers.

Reason 6: A company could diversify its business and manufacturing by expanding into foreign

markets. Some foreign markets grow quickly, while other markets experience weak growth.

Consequently, the business could earn a return on its investments.

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Reason 7: A company needs an important raw material for production. For example, battery

manufacturers need lithium to produce laptop batteries. They started mining and refining

facilities in Bolivia because Bolivia possesses half the world's reserves for lithium.

Reason 8: Businesses and companies reduce their production costs. Consequently, many U.S.

manufacturing companies moved to China and Mexico to take advantage of the lower wages and

comparable productivity.

Reason 9: A company outsources its production to another company, usually located outside the

country. For example, Microsoft outsourced its production of X-box consoles to Flextronics, a

Singaporean company. Then Flextronics outsourced the production to a Chinese manufacturing

plant. Consequently, outsourcing can lower a company's cost, granting it a cost advantage over

its competitors.

Reason 10: A company investing in a foreign market today may lead to future investments. For

example, a company opens a subsidiary in Moscow, Russia. After establishing the subsidiary, the

company can open branches in other Russian cities or enter other Russian speaking countries.

Reason 11: A company that produces in a foreign market reduces economic exposure. Economic

exposure is changes in economic factors, such as inflation, interest rates, and exchange rates

affect a company's profits. One important factor is fluctuating exchange rates. A company could

experience wide swings in profits if it produces in one country and exports to another. However,

if the company produces and sells within the same country, fluctuating exchange rates would

impact less because the company's revenues and costs are denominated in the same currency.

Thus, a company's profit could remain stable in a foreign market.

Reason 12: Many companies relocate subsidiaries to politically safe and business-friendly

countries, such as the Bahamas, Dubai, and Singapore. These countries have low taxes and few

regulations.

Multinational enterprises are more complicated than businesses that remain in their home

country. First, the businesses transfer resources, such as machines, equipment, and labor between

different countries. Next, they ship products and services to other countries. Consequently,

companies need excellent management in logistics, and specialists who monitors a country's

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different laws and regulations. Second, international enterprises are exposed to exchange rate

risks and credit risks. Thus, a company's profit can quickly change due to fluctuations in

currency exchange rates, or a company cannot get credit to finance operations in a specific

country. Finally, enterprises have other exposures, such as country risk. For example, when

Hugo Chavez became president of Venezuela, his government began nationalizing companies.

Any international enterprise in Venezuela can experience the seizure of its assets without

compensation.

A country risk is the risk of investing in a particular country as political conditions rapidly

change. For example, the Republic of Kazakhstan was a former state of the Soviet Union that

became an independent country in 1991.Country's president, Nursultan Nazarbayev, opened its

economy to free markets in early 1990s.Consequently; Kazakhstan made great strides towards a

market economy and attracted billions in international investment because the country contains

vast petroleum and mineral wealth. After the 2008 Financial Crisis, the Kazakh government is

gradually reviving the Soviet rules, practices, and regulations. Unfortunately, the Soviet legal

system is very bureaucratic, slow, and arbitrary, and suffers from corruption and political

favoritism. Moreover, the Kazakh government nationalized several foreign-owned companies,

and international investment began plummeting in 2012.

One of the oldest tools yet important to managers and top management in evaluating their

expansion strategy is the BCG growth share matrix, The Boston Consulting Group, a leading

consulting firm, developed and popularized a portfolio analysis tools that helps managers

develop organizational strategy based on market share of businesses and the growth of markets

in which businesses exist.

The 1st step in using this model is identifying the organization’s strategic business units (SBUs).

A Strategic business Unit is a significant organization segment that is analyzed to develop

organizational strategy aimed at generating future business or revenue.

Exactly what constitutes as SBU varies from company to company. In bigger organizations, and

SBU could be a company division, a single product or a complete Product Line.

In smaller organizations, it might be the entire company.

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Even though they vary drastically in form each SBU has the following characteristics:

It is a single business or collection of related businesses.

It has its own competitors.

It has a manager who is accountable for its operation.

It is an area that can be independently planned for within the organization.

After identifying the SBUs, the next step is to categorize each SBU within one of the 4 Matrix

Quadrants:

STARS – Star SBUs have a high share of a high growth market and typically need large amounts

of cash to support their rapid and significant growth. Stars also generate large amounts of cash

for the organization and are usually segments in which management can make additional

investments and earn attractive returns.

CASH COWS: SBUs that are Cash Cows have a large share of a market that is growing only

slightly. Naturally, these SBUs provide the organization with large amounts of Cash, but since

their market is not growing significantly, the cash is generally used to meet the financial

demands of the organization in other areas, such as the expansion of a STAR SBU.

QUESTION MARKS: These categories of SBUs have a small share of a high growth market.

These are “question marks” because it is uncertain whether management should invest more cash

in them to gain a larger share of the market or deemphasize or eliminate them. Management will

choose the 1st option when it believes it can turn the question mark into a star, and the 2nd

option when it thinks that future investments would be fruitless.

DOGS: SBUs that are dogs have a relatively small share of a low-growth market. They may

barely support themselves; in some cases, they actually drain off cash resources generated by

other SBUs. These are the SBUs which are likely to be shortlisted for deemphasize or

elimination.

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PITFALLS of the BCG Growth Matrix Model:

The matrix does not consider factors like:

Various types of Risk associated with product development

Threats that inflation and other economic conditions can create in the future.

Social, Political and Ecological Pressures.

Before jumping to the next part which is listing the expansion strategies let’s mention some of

the risks attached to the expansion and growth.

The risks of business are real; otherwise everyone would grow their business. Risks fall into

many categories including: personal, business and competitive.

By acknowledging the risks, you can seek out solutions, learn from others who have faced the

same challenges, and gain confidence in forging on with your business expansion strategies.

Managing Risk

1. Personal Risks: Stress, No Family Time, Loss of Control.

If you think that business expansion is not going to affect your loved ones, and your own health

and personal finances, and that they can be separated from the ongoing pressures of growing

your business - you are misinformed. Safeguard against poor health by getting regular exercise,

eating well and spending quality time (vs. quantity time) with your family members.

Choose your business partners just as wisely as you choose your friends/family. Bringing on

business partners and signing covenants can feel to an entrepreneur like they are losing control

and independence. Would you like to own 50% of a multi-million dollar business, or 100% of a

$100,000 business? If you cannot grow without taking on a new partner then the three questions

to ask yourself when evaluating a potential partnership's worth are:

Is it a good fit strategically?

Is it a good fit operationally?

Could you spend a week on a boat with this person(s)?

2. Business Risks: Instability, Ineffective Management, Financial Loss.

Business growth brings pressures to a system that may not have had the time/experience to get

geared up for increased production or services. New timings of payables/receivables may create

financial strain. Customers may feel underserved. Employees may be uneasy about all the

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changes. The owner(s) and management may not have the right skills. This is a good time for a

soul-searching examination of strengths and weaknesses. Do you have enough of the right stuff?

3. Competitive Risks: Unknown Markets, Aggressive Competitors, Unfamiliar Terrain.

Growing is the next big challenge for a business owner - it's exciting and new. That part is

familiar. Pushing your existing product into new markets, or new products into existing markets

will be unfamiliar and may have unanticipated results. Also as you push up against bigger

competitors, don't be surprised if they fight back! Think about outsourcing, bringing in

temporary executive savvy in expansion, training your staff in new technology/methodology or

starting a new company with new equity, rather than existing cash flow.

Now, let’s summarize briefly 7 strategies to expand to the global markets:

1. Increase your sales and products in existing markets. This is obviously the easiest and most

risk-free way to expand. This tactic may require a bigger location, different pricing strategies,

new/improved marketing techniques - but it will be in a customer group with whom you already

have a relationship. If you get off track, your present customers will let you know!

2. Introduce a New Product. You have a successful product/service that you have been offering

for some time and have been collecting data, customer feedback and doing the tinkering on your

newest product. This is a normal evolution in business, not just an expansion tactic. When

positioned as adding value and being responsive to customer needs, this can be a relatively risk-

free way to expand.

3. Develop a New Market Segment or Move into New Geography. Both of these areas require

cost outlays and uncertainty. Moving your products into new categories or demographic

segments requires market research, beta testing and new marketing strategies, i.e. a message for a

16-year old will differ that one for a 60-year old. Management of new remote locations may

absorb significant time and attention. While the risks are more, the payoffs are large - and for

most businesses looking to expand, these two methods of expansion are inevitable.

4. Start a Chain. A restaurant, retail or service business that's easily reproduced and can be run

from a distance is all you need to launch a chain. But, you must be cognizant of what made the

first location a success - was it location, your staff or you? If it is just you, then duplication is

only possible through detailed operations plans and sharing staff between locations. You will

need to duplicate the plan of your first location while meeting increased customer demands.

Starting a chain gives your current staff a crack at "management" duties, training opportunities

and an opportunity to expand their horizons.

5. Franchise or License. While it's a quick way to grow, a franchise agreement can cost

(minimally) $100,000 to prepare. You will need to be a good teacher, be able to prepare the

training manuals (preferably in more than one language), be very organized and willing to travel.

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Licensing can carry less risk, but demands giving up a certain amount of control. Licensing a

patent, trademark or industrial design means that you sell manufacturing, distribution or

production rights.

6. Join Forces / Strategic Alliance. A merger or acquisition combines the best of two companies,

expands your customer base, increases intellectual capital and delivers operational efficiencies.

The trick is finding the right partner. These partners may be new distributors, but be forewarned

large retailers exact heavy performance expectations. Can you perform to the letter of your

promise? Can you meet high standards of quality (ISO, or the like) and adapt your procedures to

meet just-in-time delivery? Due diligence and strong contractual arrangements are essential here.

7. Go Global. You can decide to go global in a number of ways. Growing markets, rising

consumer spending, improved business climate--sometimes the only place to find these things is

overseas. Doing business internationally can take the form of exporting, licensing, a joint venture

or manufacturing, but whatever form you choose, the basic business rules apply: assess customer

demand, gain legal and accounting assistance, protect intellectual property and obey regulations.

More difficult to understand than the regular business affairs may be the cultural nuances -

ignore them at your peril. In some countries, particularly those in Asia, a local partner is virtually

a requirement. Your first stop should be your target country's economic development agency,

which can help marshal local resources to get you on your way, possibly with a small financial

boost. Be patient. Growing your business globally can take more than one "sightseeing trip" to

the region.

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Research Methodology

In order to see how the managers think about one of the most important stages in the strategic

management process I have developed a questionnaire that was addressed to a number of 28 managers

in CEMEX. The questionnaire comprised two sections: the former included factual questions, while the

latter included 12 questions about different elements of the formulation phase of the strategy, such as:

company visions, the SWOT analysis, the goals of the company and company’s values. The questionnaire

was administrated in person during Jan and Feb 2016. Due to the type of questions it was absolutely

necessary to have managers replying to the questionnaire. A very high proportion of the respondents

held the position of manager (85%) and the rest declared that they had the necessary data needed to

complete the survey. The respondents had an average age of 47, the youngest being 33 and the oldest

being 58 years old. Among the respondents 11% of them were female while 89% were male. CEMEX

company that was included in the survey sample had an average lifetime of twenty years. The company

had a number of employees around 1000.

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Conclusions

The strategic management has been defined as that set of decisions and actions which may lead

to the development of an effective strategy or strategies to help achieve corporate objectives.

Strategy formulation is the second step of the strategic management process that comes naturally

after the analysis of both internal and external environment. The work presented in this paper

identified the elements of strategy formulation phase within CEMEX in specific. A simple

questionnaire was developed and used to test validity of the successful expansion strategy

formulation. Simplistically, one might assume that strategic thinking is followed by strategic

planning and then embedding in the organization. Rather than this sequential perception,

however, we consider that the phases are managed as interrelated in parallel over the course of a

strategy formulation process. Our study points out the fact that although there were many

managers who developed a vision for their company and also established a strategy for their

company, only few of them revise their strategy. We can also conclude that, despite the fact that

some firms have incorrectly developed and implemented their strategic management process

based on insufficient data, they have also chosen not to revise it periodically. This may lead

towards very unpleasant situations or even situations that can put the firm’s survival at risk,

especially when going to decide for expansion as we witnessed that the corporate strategy is very

attached to the strategic decisions like expansion.

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[13] Pitelis, Christos; Roger Sugden (2000). The nature of the transnational firm. Routledge.

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[14] http://www2.econ.iastate.edu/classes/econ355/choi/mul.htm

[15] Roy D. Voorhees, Emerson L. Seim, and John I. Coppett, "Global Logistics and Stateless

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[16] Doob, Christopher M. (2013). Social Inequality and Social Stratification in US Society.

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[17] http://yaleglobal.yale.edu/about/globalinc.jsp "GlobalInc. An Atlas of The Multinational

Corporation" Medard Gabel & Henry Bruner, New York: The New Press, 2003. ISBN 1-56584-

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[18] Case study: The Relationship between the Structure/Strategy of Multinational Corporations

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[19] Ken Szulczyk. “Expanding into Foreign Countries.” Money, Banking, and International

Finance. Boundless, 21 Jul. 2015. Retrieved 28 Feb. 2016 from

https://www.boundless.com/users/233416/textbooks/money-banking-and-international-

finance/multinational-enterprises-3/multinational-enterprises-24/expanding-into-foreign-

countries-61-15159/ce less money can be spent for public services.

[20] BCG Matrix https://managementinnovations.wordpress.com/2010/06/10/strategy-

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[21]Bob Wright. “Community Futures British Columbia“ http://www.cf-

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