0©2013MConsultingPrep,Inc.1Cementisoneofmostcommonly-usedcommoditiesintheconstructionsector.Cement,alongwithaggregatesandwateraremixedalltogethertomakeconcrete,thecoreofeverymodernbuildingstructure.Becauseofitsexpensiveandcomplicatedproductionprocess,cementismoreofaconcerntoconstructionprojectsthantheothertwocommodities.Cementisoftenreferredtoasaheavyproductastransportationcostusuallytakesupalargeportionofthefinalcustomer-landedcost.Asaresult,cementisaverylocalindustry.Strategicallylocatedplantscanoutplaymoreefficientplantswithdisadvantagedlocations.Theproductionofcementcanbedividedintomultiplestepswithtangibleandfor-salableend-productateachstep.Exhibit1showstheextendedcementproductionvaluechain.AngkorCementisoneofthebiggestplayersinCambodiaalongwithotherinternationalandregionalproducersfromThailandandVietnam.Theaggressiveplanofthegovernmentinrecentyears,i.e:encouragingforeigninvestment,alongwithslowinfrastructuredevelopmenthasmovedthemarketoutofbalance.AngkorCementusedtohavethemonopolyinthemarketbeforetheentranceofforeignplayers.AngkorCementhasmultipleplantsscatteredindifferentareasinCambodia.MostofitsplantswerebuiltwitholdtechnologyfromChina.Thecompanyismostlyownedbythegovernmentandhasbeenlosingmoneylately.21.WhichofthefollowingstatementsbestdescribestheChairman’sclaim?A)ThechairmanwantsMcKinseytohelpAngkorCementcontroltherisingofinputcostsB)ThechairmanwantsMcKinseytofindoutwhetherAngkorcanbeturnedaroundornotC)ThechairmanwantsMcKinseytominimizeAngkorCement’slossinupcomingyearsD)ThechairmanwantsMcKinseytohelphimfindabuyerforthewholecompany2.Basedontheaboveinformation,whichoffollowingcorrectlyexplainswhycementisa“heavyproduct”?A)Cement’sphysicalweightperdollarvalueishighcomparedtoothercommoditiessuchassteelB)CementisphysicallyheavierthanothercommoditiessuchassteelC)Cementtransportationcostinthefinalcustomer-landedcostishigherthanothercommoditiessuchassteelD)AtypicalconstructionprojectneedsalotmorecementcomparedtoothercommoditiessuchassteelThechairmanexpress...
