To plan marketing and management strategies for businesses, it is important to perform a situations analysis. One such analysis, a SWOT analysis, examines "strengths, weaknesses, opportunities and threats" within a particular business or field. The cement industry is an example of a field for which a SWOT analysis would enhance marketing and management strategies.
The cement industry has many strengths to be considered. Cement is, literally, the building block of the construction industry. Almost every building constructed relies on cement for its foundation. The cement business is a $10 billion industry, measured by annual cement shipments. There is also a strong reputation behind the cement industry. Cement is a solid material and consumers rarely have complaints about the product. Regional distribution plants have also made cement widely available to any type of buyer.
The cement industry is not without its drawbacks. The cement industry relies on construction jobs to create a profit. But the cement industry heavily relies on weather. About two-thirds of cement production takes place between May and October. Cement producers often use the winter months to produce and stockpile cement, to meet demand. Another weakness is the cost of transport; the cost of transporting cement is high and this keeps cement from being profitable over long distances. In other words, shipping cement costs more than the profit from selling it.
The cement industries has opportunities as well. One such opportunity is the cement industry's efficiency. The cement industry has recently streamlined its production efforts, using dry manufacturing instead of wet, which is heavier and more time-consuming. The cement industry has also invested about $6 billion in expansion efforts to meet unmet cement needs. Projections show that by 2012, the cement industry will have 25 percent more production capabilities.
The nature of the economy have uncovered a number of threats to the cement industry. The cement industry greatly relies on construction. The current economy has lessened the number of construction jobs, which in turn hurts the cement industry. The cement industry controls the majority of the United States market, but not all of it. About 11.5 metric tons of cement are imported annually to support the unmet need. If other countries can produce and ship cement for a reduced price, the U.S. cement industry is in danger. The U.S. government is also attempting to regulate the cement industry's waste. The Environmental Protection Agency has introduced regulations for the cement industry to cut down emissions.
The cement industry SWOT analysis indicates that the industry has been greatly affected by the economic downturn. However, with investments, the industry believes it can rebuild and increase production. This will lessen the need for foreign imports. The industry has become very renationalized because of the high costs of transporting cement. However, the regional market caters to all types of jobs, from residential to commercial projects, just within one region. And the shortened profitability period of cement has allowed cement producers to stretch production across the year, to avoid overwork from May to December.