Discuss about the Environmental Analysis of BHP Billiton.
BHP Billiton is the world’s largest mining corporation and is also among the Australia’s biggest company in terms of market capitalization. The specified company is engaged in the manufacture, innovation and growth of iron core, oil and gas, diamonds, silver, zinc, lead, coal and copper and various other natural resources. The corporation is also a lead market holder in terms of value-added flat steel goods. BHP Billiton mainly involves three businesses, namely, minerals, petroleum and steel. The company is headquartered in Melbourne, Australia, whereas the other chief offices are in London, Johannesburg, Singapore and in other developed cities.
The following study will outline the strategic planning of BHP Billiton. The study will examine the company’s vision statement, mission statement and its formal organizational objectives. It will also demonstrate the appropriateness of the organizational objectives and will discuss why these objectives are applicable. The discourse will also portray the internal and external analysis of the organization by implementing appropriate strategic management tools.
The BHP Billiton is the world’s largest excavating corporation and is also among the Australia’s major company in terms of market capitalization. The specified company is betrothed in the manufacture, invention and development of iron core, oil and gas, diamonds, silver, zinc, lead, coal and copper and various other natural resources (Baaki and Moseley, 2011). The corporation is also a lead market holder in terms of value-added flat steel goods. BHP Billiton mainly involves three businesses, namely, minerals, petroleum and steel. The company is headquartered in Melbourne, Australia, whereas the other chief workplaces are in London, Johannesburg, Singapore and other developed cities. Due to the merger between the two mining businesses, Broken Hill Proprietary (BHP) and Billiton in 2001, the BHP Billiton becomes an international listed company that specializes in diverse mineral possessions. The company is now grounded in 25 countries and operated in the wide range of mining commodities.
After the merger in 2001, the company is continuously gaining strength in their competitive position in different mining commodities section. The Financial Times Global Top 500, in December 2012 listed BHP Billiton at rank number 4, amongst the world’s top companies in terms of market value. With a market value of US$ 247,500 million, it reached to a position that eludes the efficacy of the organization’s strategy (Better strategic planning, 2012). The company is dedicated and developed its performance on the sustainable growth and procedures towards safety, environment, health and safety. The main resolution of the business is to generate long-term stakeholder value over and done with the discovery, development, attainment and marketing and management of the natural possessions. BHP Billiton main policy is to own and activate large, long-life; inflatable, upstream resources decimalized by the commodity, low-cost, characteristics and market.
A business has to continually adapt to the changing business environment to meet to meet the competitive business condition. But there are some cores standards that must keep on steady mode that could be responsible for direction in the procedure of intentional decision-making. A vision statement is generally expressed in the company’s mission statement (Bullington, 2009). It is about the core principles that the corporation is dedicated to. It is the core determination and the visionary goals that will chase to fulfill the company’s mission. BHP Billiton pulls out all the stops and attempts to develop long-term value across the discovery. The specified company aims in the growth and conversion of the natural resources and for the endowment of innovative customer and market-focused explanations. The company is determined and dedicated towards a long-term approach of investing low-cost, superlative, elastic and export-oriented operations that reflect the divergence around the market and geographic areas (Grier, 2014). BHP Billiton has a very disciplined and customer oriented plan and wants to be the company of excellence by generating and developing maintainable values for their contractors, workers, shareholders, consumers, business partners and suppliers. The company aspires in giving zero damage to publics, their host group of people and the ecological condition and wants to strive in order to achieve the leading industry practice.
BHP Billiton could develop a vision statement that could provide a specific and fixed direction to the corporation for the next eight to 10 years, along with noting an assurance towards to honesty, transparency, frankness, and other such values. As a vision announcement is a vehicle that communicates the organizational purpose and values to all the key holders, BHP Billiton could make a vision that maintains the trust of the stakeholders.
A mission statement helps an organization to focus and analyze in what really matters to itself and to its stakeholders. The mission statement is always important for the organization in all types of public, private, family-owned, profit or non-profit. The main reason that the mission statement is such high importance is its guidance to daily operational strategy. It also works as glue that binds the organizations together.
BHP Billiton main intention is to be corporation of choice. The business aims in maintaining a position where it can creates supportable value for their shareholders, workers, customers, commercial partners, and host publics (Hitt, 2011). The specified corporation aspires in giving no harm to the citizens, their host communities and the environment they are operating in. BHP Billiton has developed and grounded its philosophies to oversee safety, communal, economic, and ecological events that are important to the way of business they are operating. BHP Billiton active mission declaration describes the corporation important and unique purpose. The mission proclamation of the corporation proclaims the organization in what it intends to accomplish and how it identified the market in which it is operating. The mission statement of the BHP Billiton clearly indicates how it is unique and its scope of operations.
In this changing business environment and industrialization, BHP Billiton should set a clear, realistic mission and should work determinedly to make sure that everyone, from the managers to middle man to the lower staffs understands what it really means.
BHP Billiton value statement is to frequently engross with its key stakeholders to appreciate the areas of attention and to speak their potential anxieties about the company processes. The company maintains the minimum mandatory health, community and environment, safety procedures for the workers. The company is enduring commitment towards the sustainability and ethical behavior. The company value in putting health and safety first for the workers and the citizens and are determined in being environmentally responsible for the communities. BHP Billiton also makes a valuable involvement towards the local societies by giving contributions and offerings and their personal time in exercising to a series of events (Johnston and Bate, 2003). BHP Billiton is among the world’s foremost businesses due to its principled values and business performs and supremacy standards.
Value statements play as key player to the organization strategy procedure. The basic structure blocks of morals such as honesty, respect, reliability, and specialized behavior that is mutual and industrialized for the mission announcement (Lambertini, 2009). BHP Billiton should try to enhance its value statements in such a way that it could provide guidance to the organization mainly in finding the way to reach the major goals and aims of the operations.
Almost all the large corporations, irrespective of its type, use a standard approach in developing its objectives. The main motive of every objective in the company is to create a chart of the organizational goals. BHP Billiton also develops its objectives and approach that are specific, measurable, achievable, and are result focused. The specified company main objective is to recruit more from the host communities in order to attract more caliber individuals that are committed towards the success of the organization (Gru?nig, Ku?hn and Ku?hn, 2005). The company strategy has unchanged over the years that have allowed them to bring superior limitations throughout the monetary and commodity series. The objective of BHP Billiton has increases the flexibility of its cash flow by dropping its introduction to any product and currency and also enables the company is providing more expectable and healthy financial enactment.
The strategy of BHP Billiton is grounded on various diversifications, namely, by product, layout and market. In order to succeed more, the firm need to recruit more workers and should build a stronger bench of employees that portrays the values and commodities in which they operates.
Internal Analysis and External Environment Analysis
The main reason of SWOT investigation is to portray the organization’s key strength, weakness, opportunities and threats from the accomplished internal and external environment (Ogbonna, 2006). The following SWOT examination will interpret the findings into deliberate actions so that the business can operate chances and guard against its threats.
- BHP Billiton is a multinational mining business that has an expanded range of products. The specified business is one of the major dealers of uranium, copper, lead, silver and aluminum. The company has a strong market position and also has good reappearance on possessions owned.
- BHP Billiton has expanded revenue course and has strong fiscal place. The operation for the marketing is all done centrally (Yoon, 2010).
- The company has got a very strong and solid international brand image and name.
- BHP Billiton has a strong workforce with over 45,000 workers.
- The company is regarded as one of the largest petroleum and mining company.
- The customer social responsibility activities and events of the company have enhanced the brand image of the company.
- BHP Billiton needs to improve the degree of the gross edge and the long-turn monetary return on the equity.
- The company is a little bit weak in corporate communications as employees of some centers don’t act proactively in the corporate inquiries (Yoon, 2010).
- BHP Billiton is currently facing some human resource issues that have its negative impact on the operations.
- Some of the past cases of the accidents have often led to criticism.
- BHP Billiton has got several schemes in hold that needed to be executed. The continuous projects can be a significant source of revenue that can be operated in a lucrative manner.
- The corporation can improve and solid its product position by persuading innovative advertising solutions and by using modern means tools (Yoon, 2010).
- The BHP Billiton has huge opportunity in expanding its operations in Coal and Copper sector.
- The specified company could also tie up with other global companies and also has the opportunity in acquiring other related small companies.
- The company is facing threats from the continuously rising cost of the suppliers along with the labor costs.
- BHP Billiton is also facing political threats in many countries regarding its infrastructure access.
- The specified company hugely depends on the China’s requirement for the physical resources and the global downstream could unswervingly impression the sales and productivity of the BHP.
- Another major threat for BHP Billiton is immense competition in the mining sector and reduction in demand of several countries.
Porter’s five forces
This analysis delivers a planned assessment of the modest external environment relating to BHP Billiton (Drucker and Maciariello, 2008). The strategy allows the chance to measure the foundations, asset and impression of the reasonable forces.
Bargaining Power of Buyers
- Not many alternatives are accessible in large amounts that can reduce the negotiating influence of buyers.
- BHP Billiton mainly attentions on recalling the long-term relationship that leads to decrease the influence of price increase.
Bargaining Power of Suppliers
- BHP Billiton is hugely impacted due to the bargaining power of suppliers in raw materials, energy shipping, energy costs and labor (Schmidt, 2009). As the multinational company ensures in reducing the volume through improved processes, the general cost of the dealers have amplified. There are insignificant alternates accessible to BHP Billiton that improves the strong negotiating power of the providers.
Threat of New Entrants
- The risk of new contestants is very low because of the near death of natural resources. Being the largest mining company, and with latest technology, it will take a while for the new entrants to upgrade their level.
- Other threat is the drop of price in the commodity that has slowed down the demand of iron ore from China (Clarke, 2003).
- In regard of the geographical sites, BHP Billiton has got the best biological resources places than the other participants.
Threats of Substitutes
- The danger of alternates to BHP Billiton is quite little as there are not several substitute materials available in the market for the natural resources (Schmidt, 2009). The corporation is powerfully placed due to its expanded portfolio of natural possessions.
Intensity of existing rivalry
- The intensity of the competition among the sellers is very tough. This is the chief fact that many other mining corporations are competing to get the reserves available in the world (Ward and Peppard, 2002).
- In despite of strong competition, BHP Billiton remains the favorite due to its strong brand image and profit making potential.
The strategy analysis of the company indicates that BHP Billiton is varying renowned Mining Corporation that has a characteristic marketing method which gives the business a modest advantage over the competitors. Being present as the world’s largest producers of iron-ore and coal, the corporations other produces includes oil and gas, diamonds, silver, zinc, lead, and copper. The company has got a significant crude oil and natural reserves holdings.
It has been found in the study that company is engaged in manufacture, innovation and growth of iron core, oil and gas, diamonds, silver, zinc, lead, coal and copper and various other natural resources. The corporation is also a lead market holder in terms of value-added flat steel goods. BHP Billiton mainly involves three businesses, namely, minerals, petroleum and steel. The study also analyzed that BHP Billiton main point is to be corporation of choice. The corporation aims in maintaining a position where it can creates maintainable value for their stockholders, staffs, clients, business partners, and host societies. The specified corporation aspires in giving no damage to the citizens, their host communities and the environment they are operating in. The study also demonstrated that the strategy of BHP Billiton is grounded on various diversifications, namely, by service, layout and market. In order to succeed more, the corporations need a stronger workers that replicate the values and commodities in which the corporation operates.
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