Lafarge in Asia

Published 01 Jan 2001
Reference 4975
Topic Strategy
Region Asia
Summary

The case is set in the context of the restructuring of the cement industry in SE Asia, post 1997 currency crisis. Western cement giants, jostling for the number one position in the industry, had long had ambitions to gain a foothold in this highly profitable industry as part of their globalisation strategies. Taking advantage of the 1997 crisis, they moved in to make numerous acquisitions in the region and as a result, by 1999 controlled almost 60% of total capacity. The case examines these events from the standpoint of one key player, Lafarge, and examines the strategic thinking and approach to acquiring assets in the region, and its future options in the new competitive context.

Teaching objectives

The case describes the acquisition strategy of a western global company implemented in SE Asia. It may be taught in conjunction with two other cases that respectively examine the same restructuring process from the viewpoints of another Western acquiree, and an important local player. It allows discussion of both the strategic considerations behind the acquisition moves, and the actual process necessitated by this different cultural context. It can be used to understand what advantages pan-Asian and global competitors can create by cross-border integration, as well as the limitations of these strategies.

Keywords
  • RD0901
  • AR2001
  • CEMENT INDUSTRY
  • INDUSTRY CONSOLIDATION
  • MERGERS AND ACQUISITIONS
  • GLOBALISATION
  • STRATEGY
  • COMPETITIVE ANALYSIS
  • CROSS-BORDER INTEGRATION
  • COMPETITIVE DYNAMICS