Analysis of Strategies Used by BHP Billiton

The report analyses the strategies used by BHP Billiton, including their mission, vision, core competencies, successful strategies deployed in the past, current strategies, and analysis of strategies used. It also includes a micro and macro environmental analysis, leadership and organizational culture style, and SWOT analysis.

Running head: MANAGEMENT
Management
Name of the Student
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Author note

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Executive Summary
The report has helped in the analysis of the strategies which have been used by BHP Billiton
in which there are different kinds of strategies applied by the company in an efficient manner.
Furthermore, the current strategies have been identified which mainly focused on innovative
growth and the porter’s generic forces strategies which helped and assisted the company in
becoming more innovative in becoming more efficient in the market which is competitive in
nature. Furthermore, the macro and micro environmental analysis has helped the company in
becoming more aware about the different issues and solved them in an efficient manner.

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Table of Contents
Task 1 3
Introduction 3
Deployment of Strategies by BHP 3
Mission, vision, core competences 3
Successful Strategies deployed in the past 3
Current strategies 3
Analysis of Strategies Used by BHP Billiton 4
Task 2 4
Criticism or Failure of Past Tactics 4
Task 3 5
Micro and Macro Environmental Analysis of BHP 5
PESTEL Analysis 5
SWOT Analysis 5
Porter’s Five Forces Model Analysis 6
Task 4 6
Leadership and Organizational Culture Style of BHP 6
Conclusion 7
References 8

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Task 1
Introduction
BHP is one of the multinational metals, mining along with petroleum dual listed
public organization which is headquartered in Melbourne, Victoria situated in Australia
(Bhp.com, 2018). The revenue which has been earned by the company was US$38.285
billion till the year 2017 and the number of employees working in the organization are 65000
till the year 2017 and the areas served by the company is the entire worldwide.
Deployment of Strategies by BHP
Mission, vision, core competences
The main mission of the company BHP is to the organization of the choice of the
different customers. The main aim is to create sustainable value for the different
shareholders, employees, business partners along with the host communities. Furthermore,
the main vision of the respective company BHP is to aspire for causing zero harm to the
different individuals along with the host communities along with the environment as this will
help them in striving to achieve leading industry kind of practice in the entire market.
Moreover, the different kinds of core competencies of the firm are to outlining the different
strategies to grow value and this will help the company in gaining competitive advantage in
the market as well. The operating model will allow leveraging the expertise in the long-term
development of the firm and this is allowing the firm to make better practices which will help
in sustainable development of the firm effectively.
Successful Strategies deployed in the past
The different kinds of strategies which have been adopted by BHP in the past is by
maintaining in the position in the entire market is relative to the dedication as to create long
term value to shareholders, corporate governance along with the main focus is on the
communities and environment wherein they have their operations and this is the innovative
approaches in gaining strong customer base in the entire market as this will attract more
customers in the competitive market (Banumathi and Nadarajan, 2016, p.995).
Current strategies
There are various current strategies which have been adopted by BHP Billiton in
order to become more effective in nature and gain more profits in the future as well.
Recently, this has been announced by BHP there has been enhancement of strategy which has
enhanced the shareholders returns and value in the near term as well (Bratton and Gold,
2017). The main aim of the company is to increase the copper and shale asset as this will
create surge in the revenues once the price of the commodity improves. Furthermore, there
will be innovation technique which will be applied by the company in an efficient manner
with proper innovative usage of technologies. Lastly, in the present scenario, the company is
investing in high return growth opportunities to generate the capital will be deployed as this
will help in providing huge returns to the company in a positive manner which will improve
the overall growth and efficiency of the firm in comparison to the other competitors in the
market (Leiber, Stensaker and Harvey, 2018, p.12).
Analysis of Strategies Used by BHP Billiton
There are various kinds of strategies which are being used by the BHP Billiton which
has helped them in being more successful in the different approaches which are being

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adopted by them efficiently. The two kinds of growth strategies which have been adopted by
them are as follows:
Michael Porter’s Generic Forces
This is one of the growth strategies which has been adopted by BHP wherein the cost
leadership strategy was adopted by them. This was seen and analysed that the cost leadership
strategy as this is critical in nature as there are various external environmental threats that can
negatively impact the company and this will have huge negative impact on profit margins of
BHP despite of the huge demand of the customers in the market. In order to implement the
respective strategy, the organization needs to minimize the costs across the entire value chain
and this will be done by them through proper diversification of the products and services
which were being sold by them (McDONALD, 2015).
Growth Strategies
The other strategy which was being adopted by the BHP Billiton was the growth
strategy in which this has been seen that the growth of the company is essential which helps
in the overall growth of the firm. With proper innovative strategies, BHP tried to enhance the
returns of the shareholders and value in the near term as well. Furthermore, the main motive
and aim of BHP is to improve the productivity level along with maintaining the level of
momentum as well. Moreover, this has been seen and analysed that quality portfolio of the
company is being based on assets which will help the company in receiving medium level of
the growth-related options and techniques as well (Sen and Rajagopal, 2017).
Task 2
Criticism or Failure of Past Tactics
There were different criticisms or failure which was being faced by BHP Billiton and
the company suffered huge loss in the past as well. Firstly, this was seen that BHP faced a
major issue in the year 2015. In 2015, this was being noticed that there were different
unreported documents which showed that mining company was aware of the different threats
from the worst environmental damage, however there was no such action which was taken by
them. Six months before dam which was containing millions of mining waste in liters in
which more than 19 people were killed and the company BHP which was dealing in mine did
not take any such action for reducing the risk in an effective manner (Waring, 2016).
The main allegation which was being faced by BHP Billiton was that the company
was aware of the worst damage that could have been taken place, however they were not at
all successful in reducing the same and this affected the overall image of the company in an
ineffective manner as well (Theguardian.com, 2018). The main issue which was being
criticized for BHP was that the company did not focus on the safety of the individuals and
they only prioritized the profit-making approach and this was creation of criminal case
against the joint venture along with the parent companies (Hill, Jones and Schilling,2014).
The other incident which occurred in BHP Billiton was regarding the dispute within
the management of the organization faced with the trade unions regarding the benefits and
payment provided. The workers who were working with BHP Billiton protested and there
was a strike of more than few weeks in Chile and the strike helped the employees in
benefitting themselves from the lowering the cost and this helped the employees in
performing well as well (Dalal and Malik, 2015, p.12).

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Task 3
Micro and Macro Environmental Analysis of BHP
PESTEL Analysis
With the help of the PESTEL analysis, this will assist in understanding the various
kinds of factors which will have huge negative or positive impact on the operations of the
respective company.
Political Factors is one of the major aspects in which it has been identified that BHP
tries to remain neutral in the different countries in which the company is having their
operations. This helps in focusing that they choose not to contribute towards any kinds of
funds of the political party or elected kind of officials in the country (Yadav and Kumar,
2015, p.685).
Economic Factors is the other aspect in which this has been noticed that in case of
BHP, as it is in oil market, the company will be facing various kinds of disputes in the market
when this is related to the prices of oil barrels. The main reason is the instability in the market
and there is huge uncertainty in the entire market as well (Shafritz, Ott and Jang, 2015).
Social Factors is the third aspect in which BHP is well aware of the different kinds of
social issues which can affect the stability of the firm during construction along with
operation of the different firms. This means that the company needs to have remedial
measures in order to reduce the different threats and maximising their benefits efficiently
(Shafiq, 2017,p. 730).
Technological Factors is the aspect in which innovation is essential when it is oil
business and competing in the entire market place. BHP has technology related park which is
based in Australia in order to focus more on technology and this helped the company in
staying ahead in comparison to the other competitors in the market as well (Santos and
Laczniak, 2015).
Legal Factors is the aspect wherein BHP has different resources along with stakes in
different countries and the company must keep in track the various regulations and laws when
they are considering the different other countries. The health and safety laws which are being
adopted by BHP are up to the standard and this helps the company in becoming successful
(McDonald and Wilson, 2016).
Environmental Factors is the other aspect in which BHP aims in delivering long
lasting benefits to the environment along communities for improvement of the different
natural resources. The respective program has helped the company in becoming successful in
their approaches (Yadav and Kumar, 2015, p.685).
SWOT Analysis
With the help of the SWOT analysis, the different kinds of strengths, weaknesses,
opportunities and threats are being identified which will help the company in understanding
their position and try to make the weaknesses and threats as their opportunities and strengths.

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Figure 1: SWOT Analysis
(Source: Created by Author)
Porter’s Five Forces Model Analysis
Rivalry among the various competitors is high between BHP and other competitors
as there are two major kind of rivals in the market which is ALOCA INC. and VALE S/A.
The position of BHP is highest among competitors as the company has invested in various
resources in the world.
Threats from new entrants is the other aspect which is low as the advancement of the
technology which is being used by the firm is huge and the innovation in gas and oil market
is exceptionally excellent.
Threat of substitutes is medium in nature as BHP lies in somewhat small because the
company has more than one resource and this makes the organization sustainable in nature as
well. there is diversification of the different resources and this helps the company in
becoming successful as well (Yadav and Kumar, 2015, p.685).
Bargaining Power of the Suppliers is medium in nature wherein the suppliers of
BHP are affected in a large manner by supplies of labour, energy, materials along with cost of
energy and this has reduced the overall costs of the suppliers of BHP.
Task 4
Leadership and Organizational Culture Style of BHP
The organizational culture of BHP Billiton is efficient in nature and this helped the
company in employing more efficient employees in the organization as well. The leadership
style which is being followed by BHP is the transformational leadership which helped the
company in being more effective in building proper reputation in the firm. Proper
development programs have been taken into consideration by BHP to improve the overall
Strengths
he position in the market is strong and the returns onT
assets is good
he revenue stream is diversified due to strong fi nancialT
position
CSR activities helps in enhancing the brand image
Weaknesses
he intervention of the government causes inefficienciesT
of the operations
he different failures and past criticisms have been leadT
to huge failure of the company
Opportunities
Acquisition of the different small fi rms
roper e pansion of the operations in coal and copperP x
Associations along with ti e ups with different global
organizations
Threats
here is huge reduction in e port demand in variousT x
countries as there is huge in house production
ntense amount of competition in the entire marketI
SWO
T

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function of the management and employees and gain profitability in the entire market as well
which helped the company in becoming more successful in the different kinds of training
approaches.
There is proper inclusion of the diversity in the workplace in which all the employees
are being provided with same kind of respect and this helps the company in gaining huge
competitive advantage. The diversity along with the talent management are the other aspects
which are required to gain more efficiency in their approaches of becoming successful and
effective. Lastly, BHP tried to retain the different employees in the organization by creating
unique culture of hiring locally and training the employees in an efficient manner.
Conclusion
Therefore, this can be concluded that there are different issues which was faced by
BHP in the past and this affected the brand image of the company. However, on the other
hand this was noticed that BHP which is in the oil industry has tried in analysing the different
issues in an effective manner and this helped the company in gaining huge success and there
were no such issues which affected the overall profitability of the firm.
On the other hand, with the environmental analysis, this was noticed that there were
different pressures from the external environment which is required to be analysed and
identified effectively. The organizational culture along with style of leadership is effective
and this helped the company in becoming one of the effective competitors in the entire
competitive market.

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References
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Theguardian.com 2018. BHP faces billions in compensation after mine dam collapse, say
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