Market Analysis of BHP Billiton: Strategies, Controversies, PESTLE and Porter Five Forces Analysis

This paper discusses the market analysis of BHP Billiton, including strategies, controversies, PESTLE and Porter Five Forces analysis. The organizational culture and leadership style of the company are also analyzed.

Introduction to management

Introduction to management
Executive summary
In this paper the discussion will be made on the market analysis of BHP Billiton. So, by taking
into consideration this company proper analysis will be made by considering the various
strategies in context to the company. In this report there are various tools which will be taken
into consideration like Pestle analysis, porter five forces and Swot analysis. These tools are
considered so that actual position of the company can be analyzed. Also there are various issues
which will be discussed in context to the BHP Billiton. So, these strategies will help the
company to achieve large market share in the competitive market.

Introduction to management
Table of Contents
Executive summary.........................................................................................................................1
TASK 1............................................................................................................................................1
Introduction..................................................................................................................................1
Strategies deployed by BHP Billiton...........................................................................................2
Mission, vision and core competencies....................................................................................2
Strategies which are deployed in past......................................................................................2
Present strategies which are considered...................................................................................2
Porter generic strategy..............................................................................................................3
Growth strategy........................................................................................................................3
Task 2...............................................................................................................................................3
Controversies faced by BHP Billiton...........................................................................................3
Task 3...............................................................................................................................................4
General environmental analysis (Pestle analysis)........................................................................4
Porter Five forces analysis...........................................................................................................6
Swot analysis................................................................................................................................7
Task 4...............................................................................................................................................9
Organizational culture and leadership style.................................................................................9
Conclusion.......................................................................................................................................9
References......................................................................................................................................10

Introduction to management
TASK 1
Introduction
BHP Billiton is known as one of the largest companies in the trading sector. This is also
known as Anglo- Australian multinational company which focuses on the mining based industry.
Headquarter of the company is in Australia and the company was originated in 1885. The
company has attained the largest rank of the largest mining company with respect to the overall
market capitalization. BHP Billiton was originated in the year 2010 and in context to this the
company also focused on the merger with the companies like Anglo Dutch Billiton Plc (BHP,
2018).
Strategies deployed by BHP Billiton
Mission, vision and core competencies
The mission statement of the company is related with creating sustainable value for the
shareholders, employees, contractors, suppliers and customers. The company focuses on Zero
policy that do not harm the individuals and the environment so that goals can be achieved. The
vision of the company is related with the ways that can aim at generating the value in context to
the activities of the company (Valle, 2016). The company emphasizes on future development and
conversing the natural resources. By considering the long term based strategies it has been seen
that company focuses on enhancing the customer’s satisfaction. The company also focuses on
providing market sustainable solution to the customers so that growth can be attained (Demir,
Wennberg and McKelvie, 2017).
Strategies which are deployed in past
There are various strategies which are considered by the company in the past. One of the
strategies which are considered by the company in the past is related with offering highest level

Introduction to management
of value to the customers. The company has considered this strategy so that it can be simple to
enhance growth and grab the attention of the customers towards the activities of the company.
Present strategies which are considered
BHP Billiton has considered the new growth strategy in the present era so that it can be
simple to achieve profits in the competitive market. The latest strategy focuses on enhancing the
overall return of the shareholders and also their value. The expectation of the company is to
focus on implementing the growth strategy so that positive impact can be made on the overall
productivity level of the company.
The emphasis is also given by the company on Shale and Copper based assets so that it
can be easy to grow in top line and bottom line areas. The policy related to dividend is also
developed by the company so that commitment level can be enhanced in the market. It will also
help in maintaining the goodwill in the market. Also there are various strategies which are
considered by the company.
Porter generic strategy
This is one of the strategies which are considered by the company so that it can create
broad differentiation in context to proper development in the market. This strategy will also help
to attain growth in the competitive market.
Growth strategy
The growth strategy is considered by the company in which the focus is given on
enhancing the value. The creation of value is considered as the essential strategy that will be
implemented by the company in a proper manner. The company also aims at various types of
areas which helps the company to achieve growth in the market. BHP emphasizes on enhancing
the productivity and also maintains their momentum. In context to different products the
investment can take place that will help to unlock the latent capacity of the assets. The quality
portfolio of the company is based on the assets which will help to provide growth related
options. Also the company considered global technology function which is implemented so that
resources can be unlocked in a proper manner (Hill, Jones and Schilling, 2014).

Introduction to management
Task 2
Controversies faced by BHP Billiton
BHP Billiton has faced many problems in context to disasters. It has been analyzed that
company faced the issue related with the disastrous dam disaster which took place in the year
2015. When this incident took place it has been seen that waste was spread in the nearby areas of
the operations. So, the company considered various new strategies so that these types of issues
do not take place in future. It has also been investigated that there are many cases or the
problems which took place in BHP Billiton. Also the commitment which was made by the
company to reduce the production waste in the garbage was not maintained. This has negatively
affected the overall share price of the company and also affect can be seen on the image of BHP
Billiton (Hyndman and Hyndman, 2016).
The second controversy which is related with the company is coal mines in Columbia.
According to the investigation it has been seen that the coal mines of Cerrejon has led to
violation of the human rights of La Guajira Community. By considering these impacts, the
human activists and the land defenders involved in the BHP annual general meetings every year.
Also the company ensured of proper investigation of the situation so that it can be changed and
also the commitment did not get reflected in the agreement with La Guajira community (Powell,
2015).
So, in context to these issues it has been seen that the company restructured its overall
priorities like emphasis is given on the employee capabilities and also the social license has been
acquired for operation in volatile environment.
Task 3
General environmental analysis (Pestle analysis)
There are various factors related to the PESTLE ANALYSIS and these factors influence
the strategic drivers in context to BHP Billiton. The factors which are related to Pestle analysis
are political, economic, social, technological, legal and environmental. This framework helps in
analyzing the external environment which can influence the entire activities of the BHP Billiton.
Political factor

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BHP Billiton is considered as the company with global resources which is also vulnerable
in context to political risk factors. It has been seen that company has been considering the
activities in context to basic resources in 10 nations and also considers various political risks.
The political risks also impact the entire prices of the products and services offered by the
company (Grant et al., 2014).
It is necessary for the company to evaluate the political constancy and the value of the
basic resources in context to the Australian economy by considering the legal framework. Also
the political environment of the company has a support from the government. As the company is
considered as the largest company in context to market capitalization and also it has been seen
that government supports the overall development of the company.
Economic factor
The economic factor will impact the overall activities of the company in Australia. The
impact will also been seen on the overall profitability which can consist of saving rate, inflation
rate and also foreign exchange rate. BHP Billiton is vulnerable in context to the economic
factors like energy costs, materials and also labor costs. The fluctuations which take place in this
can give adverse impact on the overall growth of the company and also on the expansion
projects.
The company also emphasizes on the present strength in the commodity prices that are
connected to health of the global economy. Also the company is vulnerable to currency
assessments and common economic perils that can reduce the demand of the commodities which
can lead to increase in the supply chain and low prices can also affect the overall profit of the
company (Epstein, 2018).
Socio cultural factors
The company is vulnerable in context to all the social issues in the relation of business
owners. Also the features supported the neighboring communities related to financial and supply
resources for infrastructure like housing, roads and schools. There are also new mining and
projects related to infrastructure that requires proper approval so that overall development cost
can be enhanced (Grifell-Tatjé and Lovell, 2018). The company has also considered creating its

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own status in the Chile by focusing on that changes related to workers conditions and also
quality of life in neighboring city of Antofagasta.
Technological factor
BHP also focuses on the technical aspects of resourceful mining, exploration and also
possession of energy. It has been analyzed that company rely on the use of technology inventions
for discovery and exploration of the mineral and energy resources. Also the biggest investment
for the company is related with technology. Also the investment in technology will impact the
two strategic drivers related to company like project pipeline and excellent assets. The important
part that is related with technology is earth moving machinery, trucks and cranes (Gunningham,
2017).
Legal factor
The legal system of various countries can influence the policies which are created by the
company. It is important for the company to analyze the factors that can improve the activities in
the industry. The legal factors in context to the company are Anti-trust law, discrimination law
and employment law (Rothaermel, 2015).
Environmental factor
The environmental factors which can be developed of the countries plays an important
role in creating the policies of the company. The company has already faced various disasters
related to environment in the past which has also given impact on the activities of the company.
So, it is important for the management to consider the overall standards related to environment
so that activities can be completed smoothly (Adler et al., 2017).
By analyzing the overall external environment it has been seen that activities of the
company can be affected due to the changes that are taking place in the external environment.
Porter Five forces analysis
With the help of Porter five forces analysis it has been seen that competitive forces are
easy to be evaluated. It is important to analyze the competitive factors. There are five forces like

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Bargaining power of the buyers
It is moderate to low and the rate of the products that are offered to them can be different
according to the entire demand. The long term based customer relation can also help to enhance
the entire prices (Meyer, Neck and Meeks, 2017).
Bargaining power of suppliers
The company has been affected by the large number of suppliers present in the market.
The power is also based on materials, energy costs and shipping costs. When the activities are
enhanced then direct impact can be seen on the supplier based power of the company (Hubbard,
Rice and Galvin, 2014).
Threat of new entrants
The threat which the company faces is related with the new entry into the market. The
prices are reducing of the product and loss in the demand of iron has also affected the entry of
the new competitors. If focus is given on infrastructure of the company it has been seen that it
reduce the effect of new companies (Dobbs, 2014).
Threat of substitutes
The substitution rate in context to the company is low as it has been seen that it requires
more finance. Also the company is considered as the biggest company. The diverse portfolio of
the company is also taken into consideration as an essential part of the entire activities (Kunz,
2016).

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Swot analysis
Strength
BHP Billiton is considered as a largest company so that main strength is related with the
large market share. The company is known as one of the largest traders of uranium after Olympic
Dam Mine. The company also has the largest source of copper which is Escondido Mine. The
company is considered as the largest producer of nickel and also sixth largest aluminum
manufacturer on the global platform (Shen et al., 2009).
Weakness
The weakness possessed by the company is related to bring improvisation in the long
term financial return and gross margin in context to competitors. The company focuses on
dealing with many human resource issues that can consider the appointment of CEO and also to
train the mining employee. The company is also understaffed this creates issues and it also
means that the company is weak in the area of recruitment and selection. The company is also
weak in the overall communication process as there are no practical and innovative responses
given to the investors.
Opportunities
The company is considering the innovative marketing answers by considering the
techniques related to social marketing and innovative outdoor advertising. The campaign also
focuses on enhancing the brand and creates customer awareness of the company activities. the
company also committed to reduce the greenhouse gas emissions.
Threats

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The company is also facing the rise in the cost related to the suppliers and it is mainly
related with shipping costs and energy costs. Global inflation and human resource problems are
also the problems that are faced by the company in the present era. In the Australian market, the
company achieves negative outcome and decisions from the states related to access the public
infrastructure. Also it has been seen that the activities of the global platform can be affected
because of the environmental demand.
Task 4
Organizational culture and leadership style
In the company it has been seen that talent management activities are also related with
managing the employees and retaining them in the workplace. The company has a huge demand
for the experienced employees and also the talent management programs are considered so that
employees can be retained in a proper way. The proper analysis of the talent is important in the
overall process of creating the global network with the employee. The company has focused on
maintaining the talent of the employees so that positive outcome can be achieved. Also the
company focuses on maintaining the forward looking approach so that talent can be developed in
a proper manner (BHP, 2018).
The culture of the company is good as there are leaders who know how to manage the
activities of the company. The company builds the culture of diversity and inclusion and has
considered various types of talent on global platform. The company is able to give their best as it
is based on the diversity of the workforce and also on the various perspectives related to
diversity. The talent management and diversity based culture is developed by the company and it
also considers the needs of the employees so that employees can give best towards the entire
activities of the company. Through this it can be easy to accomplish goals and objectives in an
effective manner. Also the company takes into consideration the transformational leadership
style.
Conclusion
Therefore by analyzing the paper it has been concluded that the company faced many
problems in the Australian market. The factors which are externally related have given impact on

Introduction to management
the routine activities. Also the industry analysis of the company can help to create better position
in the market. In context to internal analysis it has been seen that the company has a good
position in the market. The organizational culture of BHP Billiton has boosted the effective
leadership development and also enhanced the overall process of the activities. This has also
offered the company with a proper talent of the employees who give best towards the overall
activities of the company. It has been seen that if employees are efficient then it can be simple to
accomplish the goals and objectives. The company can also achieve success in the competitive
market which can help to grow and earn profits.

Introduction to management
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