Strategic Planning In Business is Essential

Strategic planning has become incredibly important in business nowadays. Every organisation should conduct internal and external analysis in order to comprehend the environment in which it operates and how best to use its resources for strategic planning.

MANAGEMENT

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Contents
INTRODUCTION......................................................................................................................1
Current strategic plan of BHP Billiton.......................................................................................1
External factors that will impact the organisation in 2025........................................................2
Internal environment in preparation for 2025............................................................................3
Organisations strategic objective for 2025.................................................................................3
New Strategic model..................................................................................................................3
Suitable strategy for organisation’s 2025 objectives.................................................................4
Strategy development process....................................................................................................4
7-S model of BHP Billiton.........................................................................................................5
Organisations strategic issues....................................................................................................5
Key strategic stakeholders..........................................................................................................6
CONCLUSION..........................................................................................................................6
REFERENCES...........................................................................................................................7

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INTRODUCTION
In the modern day business, strategic planning has become very much essential. Every
company should do internal and external analysis so as to understand the environment that is
present around the business and the way in which they can utilise their resources for strategic
planning. Both internal and external environment is going to change till 2025 and it the role
of the strategy makers to analyse these changes effectively. This is necessary for strategic
development process within the organisation. BHP Billiton is an Anglo-Australian
multinational mining, metals and petroleum dual-listed public firm that is headquartered in
Melbourne, Victoria, Australia (Lusty and Gunn, 2014). In terms of market capitalisation it’s
the world’s largest mining firm and in terms of revenue it is the third largest firm by revenue.
This report analyses the internal and external environment around the company till 2025. It
evaluates the current strategic plan of the company as well as the strategic objective made by
the company for 2025. It also assesses the firm’s new strategic model. Strategic development
process and the issues related to organisation’s strategy have been highlighted along with the
strategic stakeholders that are going to get affected by it.
Current strategic plan of BHP Billiton
BHP Billiton has developed itself into a highly profitable company. The current strategy of
the firm is to own and operate the large, future expandable, low-cost, long-life strategies and
achieve them with the help of upstream assets. It is diversified by geography, market and
commodity. Company has diversified and large amount of assets throughout the world
(Hajkowicz, Cook and Littleboy, 2012). They are working on low cost options for value
creation and long term growth of the organisation. Following this strategy company aims to
achieve higher productivity and sustainable future for the company. At the same time
company is planning to implement technologies and apply the capital for increasing the value
of the resources as well as extract maximum benefits from it.
The strategic model is utilised by the organisation is to improve the business operation by
increasing the effectiveness of the resources. Multi-functional team are created within the
organisation so as to bring efficiency in the business process. Creation of such teams helps in
bringing best of practices within the organisation which is necessary for the improvement in
the processes that are performed within the organisation (Sykes, et al. 2016). Company aims
to build a bigger business by improving the production capacity of the company. Automation

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and technological advancements remains to be to be the base for increase in production.
Current strategies of company are aiming to boost the long-term shareholder value.
Company is aiming to build partners that will help in increasing their base in the local
regions. Internal and external cooperative planning has helped them in improving the stability
of their business. Investors have been raising issues related to sustainable development of the
company (BHP Billiton, 2013). Their current strategic model also aims at improving the
skills of their human resource by building strategic platforms and taking use of different types
of strategies (Kirsch, 2010). Corporate social responsibility has been their priority but they
will have to improve their CSR strategies so as to improve their image. They have a plan to
grow the value of BHP inside their stakeholders so that they do not only remain a high profit
generating company but also a firm that is capable of looking the society they serve for. Their
strategic planning has six areas of focus which includes cost efficiencies which focused on
further gains. Other is latent capacity that aims to provide attractive returns and produce
limited risk. Third are Major projects that will help in generating value for the company and
increase the returns of the firm. Fourth is exploration that aims at giving positive outcomes
which will reduce the risks for future well. Fifth aim of the strategic plan is to improve the
technology which will be helpful in improving the safety, unlocking resources and lowering
the cost. Last and sixth aim is to Onshore them which will help in increasing the value and
flexibility of the firm (Dhakal, 2014).
External factors that will impact the organisation in 2025
In 2025, external environment in the country is going to be changed from what is now. World
politics is becoming multipolar where new political powers are increasing in different parts of
the world. At the same time the decisions such as Brexit will start showing its effect on the
business in that region. By 2025, there are more tie ups that is going to get created among the
countries this is going to benefit firms like BHP. BRICS like associations will become the
need of the global economy. By 2025, more number of companies is going to come in
different industries and hence innovation is going to be the base for gaining the larger market
share. Since the global prices are coming down hence companies will have to look for the
plans that helps in reduction of the product’s cost. The cost of fuel is going to rise at
extremely high levels and some of the OPEC countries are going to become petroleum
deficient (Fonseca, 2010). There is a constant decrease in the numbers of people that s having
higher pay scale hence the purchasing power of the people will decrease till 2025. It is also to

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be noted that more unemployed people are going to get created in various parts of the world
hence companies will have to make sure that their future human resource plan aims to create
more employment opportunities. It is estimated that till 2025 most of the businesses is going
to be working with fully-automated technologies (Mattera, 2015). It might have the impact on
the job creations as the technology seems to replace human beings.
Technologies such as data analytics is going to take the major role in the decision making
process. Apart from this, technologies such as Internet of Things is going to have impact on
the business processes as more connected world is going to get created due to this. It is also
expected that more than 70-80 % of the business will be done through modern day
technologies (Hogan and Lodhia, 2011). Legal environment of the company is changing and
by 2025 the rules governing the business is going to become more strict especially related to
mining. Since BHP deal in the business of mining hence company will have to ensure that
they have used the best of technologies so as to improve their business process so as to
reduce the concerns related to environment. Most of the countries are aiming to become
carbon neutral company hence the responsibility of BHP is going to become much bigger.
Internal environment in preparation for 2025
In order to prepare for 2025, BHP Billiton has taken different types of steps so as to improve
the resources of the company. The strategic plan that company has made for itself clearly
states that company aims to bring new technologies in their business process so as to improve
the working mechanism and bring effectiveness in their business processes (Prior, et al.
2013). The advancements in the technology are made by the company at every level and each
business processes. By 2025, more people are going to be the part of the company’s
stakeholder base especially they have plans for making stronger relationship with customers
and investors. They are also preparing for making a lot safer workplace environment where
people can work with lot of safety.
In the process of preparing for 2025, they are planning to make strategic alliances with other
big and small companies. This might be followed by some of mergers and acquisitions in
many parts of the world (Kemp, 2010). This will help them in tackling the emerging
challenges in front of the company. They are building strong business value that will help in
reducing the challenges related to legal and environment concerns.

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Organisations strategic objective for 2025
BHP’s strategic objective for 2025 seems to aim at improving the safety measures taken by
the company. They also aim to lower down their production cost by adopting different types
of strategies (Bonn and Fisher, 2011). At the same time company aims to increase the overall
output of the firm. Along with this company also aims to bring more sustainability in their
business approach and enhance their resource base so as to do business for the long term.
New Strategic model
The new strategic model which has been identified for the BHP is strategy map model which
shows the organisation strategy at the single go which will reduce the communication issues.
This has been found that strategy map is appropriate for company as it include the financial
and non-financial measures which are used to monitor strategy which is required for the
execution and performance (Perkins, Grey and Remmers, 2014).
Strategy map
The above given strategy map is the new strategy model can be followed by the company
with the motive to bring improvement in the operations of the company. It is further required
Internal business process
Learning and growth
Customer
Financial Reduction in
production cost
Improving customer
experience
Increasing
productivity
Advance
Training to
employees
Recruiting
right staff
Increasing loyalty
Sustainability
Enhacing the
education in
employees

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to meet the future objectives of the company due to which this strategy map is set according
to the future objectives of the company.
Suitable strategy for organisation’s 2025 objectives
In order to achieve the desired strategies those are made by the company for itself in 2025.
The suitable strategy is making technological advancements. By doing technological
advancements company is going to achieve efficiency in their business process which is very
much necessary for effective utilisation of resources. This will help in bringing sustainability
in the business processes. At the same time with the help of new technologies company can
provide safety to the employees as difficult and risky jobs can be done by machines (Franks,
et al. 2011). At the same time it will help the employees by alarming them about any risk that
might create in the business process.
Strategy development process
The major aim of the strategy development process is to find and create both long and short
term opportunities for the firm. The first step in the strategy development process is to
analyse. In this process of strategy development company must analyse the situations that
actually demands for strategic planning. This analysis is done for understanding the changing
mood of the market and the customer preferences (BHP, 2016). After the analysis of all the
aspects related to strategy is done, company must be able to design the strategies
appropriately with the help of all the tools they have and the data they have generated from
different research. Since the designing process has to be precise hence every aspect related to
changing scenario and business forecast must be used.
After analysis and designing there is an implementation process. In this process company
actually implements the strategy. In this process company needs the help of different
stakeholders especially their employees. Implementation has a greater role in the increasing
effectiveness of the organisation. There must be an implementation plan that should aim at
putting everything at right positions. A strategic team must be able to think of the areas that
could produce challenges in the implementation process and remove it to make it successful.
In the last the review must be done of the whole strategy so as to check the effectiveness of it
(BHP, 2018). This is necessary for making the changes in the strategy. Review must be done
with the help of feedbacks. These feedbacks can be taken from different stakeholders at any
time. After reviews again analysis is done on the strategies and accordingly changes are done.

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7-S model of BHP Billiton
They have used company’s value in each of their business aspects.
 Skills: They are developing skills of their employees as per the changing requirement
of the firm. The training process is continued along with implanting values in the
employees.
 Strategy: BHP Billiton is making changes in their strategies according to the changing
business environment. Company includes values in each of the strategies they have
made for themselves so as to gain competitive advantage (Proactive investors, 2017).
 Structure: The organisational structure is hybrid and is defined in such a manner that
flow of information remains smooth. Responsibilities at each levels of the
organisational level have been clearly defined.
 Systems: Company is used all the modern day IT systems so as improve their work
process. They are using formal procedures for measurement, resource allocation and
rewards.
 Shared values: In the making of strategies company has utilised different types of
shared values so as to bring effectiveness in the business process.
 Style: Their leadership is strong and take decisions firmly even the decisions related
to daily management is taken with consent with all the stakeholders (BHP, 2018). The
style of leadership is both autocratic and democratic and depends on the level of
strategy made within the organisation.
 Staffs: Staffs of the BHP are highly skilled and are from different parts of the world.
There is a specific personal development approach used by the organisation so as to
improve their skills. Along with this company aims to build companies value within
the staffs.
As stated in the sustainability report of BHP, company has made serious efforts in terms of
shared values. They are helping farmers and have opened medical centres for communities.
They have a plan for fatal risk controls along with security and emergency management.
They are working with the stakeholders so as to improve business conduct.
Organisations strategic issues
There are many strategic issues faced by BHP Billiton. Some of them are:

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 Competition: There are large numbers of stakeholders that have come up in the
mining industries. This will reduce the overall share of the company in the market.
 Resource scarcity: With the amount of resource depletion that is going on in different
parts of the world, the mining industry is under serious threat (BHP, 2018).
 Reduction in per unit cost: There is a constant decrease in per unit cost of resources
which has reduced the profit share of the company.
 Market volatility: There is huge reduction in the returns of the offerings in the market
and constant increase in the prices of raw materials has further increased this threat.
Key strategic stakeholders
In the execution of plans there are large numbers of strategic stakeholders which becomes
essential for the company. Some of these stakeholders are:
 Employees: In the implementation and execution of plans the role of employees
becomes very much essential. They will have the role in adding value to their
business.
 Investors: Since huge investments will be needed in their upcoming projects hence
investors will have to make arrangements for the investments (BHP, 2018).
 Decision makers: In the strategic implementation process, the role of the decision
makers becomes very much crucial.
CONCLUSION
From the above based report it can be concluded that BHP Billiton aims to make large, future
expandable, low-cost, long-life strategies that will help in long term growth for the company.
Current strategic planning aims to build multi-functional team along with advanced
technologies. The internal and external environment of the company till 2025 is going to
change a lot. They are making changes in their technology so as to be prepared for 2025 and
achieve organisational objectives. Analysis, designing, implementation and review are the
four steps of strategy development process. Competition, Resource scarcity, Reduction in per
unit cost and Market volatility are some of the strategic issues faced by BHP.

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REFERENCES
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