Business Environment: BHP Billiton

Running Head: BUSINESS ENVIRONMENT 1
Business Environment: BHP Billiton

BUSINESS ENVIRONMENT 2
Table of Contents
Introduction......................................................................................................................................3
Organizational Background.............................................................................................................3
External Environmental Factors and Company’s Response............................................................4
Political and Legal Factors...........................................................................................................4
Economic Factors.........................................................................................................................4
Environmental Factors.................................................................................................................5
Falling Demand in China.............................................................................................................5
Frameworks and tools to resolve the challenges.............................................................................6
Use of Strengths to overcome Threats.........................................................................................6
Use of Opportunities to overcome weaknesses............................................................................6
Industry Specific Decision-Making Factors....................................................................................7
Diversified Revenue Streams.......................................................................................................7
Centralized Marketing Activities.................................................................................................7
Reduction in the operational emissions.......................................................................................8
Conclusion and Summary................................................................................................................8
References........................................................................................................................................9

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Introduction
Modern businesses cannot bear to avoid the environments in which they run their business
operations. To analyze this large and changing landscape, companies should keep an eye on
external environmental factors which affect the organizational business. There are some major
factors which influence the business operations primarily. These factors are such as government
and economic factors, consumer behavior, competitor strategy and public opinion. All of these
environmental factors affect the growth and success of organizational business. The major
objective of this report is to identify these environmental factors and provide solutions to the
challenges which these factors pose. In this report, BHP Billion Organization is taken as an
example to analyze the impact of external environmental factors. At the end, solutions are
provided to deal with the risks and challenges posed by external factors.
Organizational Background
BHP Billiton is a multi-national corporation that was founded in the year 1885 in isolated mining
town of Broken Hill. The company is operating its business in Anglo-Australian mining, metal
and petroleum business. It is dual listed public company which is headquartered in Melbourne,
Australia (BHP, 2018). It is positioned as the largest mining firm all over the world on the basis
of its market capitalization. It has become second largest organization in terms of revenue.

BUSINESS ENVIRONMENT 4
(Source: BHP Billiton, 2018)
Currently, it has $98.3 billion as their market capital and $33.95 billion as sales (BHP Billiton,
2018). As the largest organization in the industry, BHP Billiton operates in the manufacturing of
iron, copper, steel, gas, oil and aluminum. After the year 2014, the growth rate of the company is
declining due to some factors. The below-report will examine these factors of BHP Billiton and
provide the solutions to overcome them.
External Environmental Factors and Company’s Response
Political and Legal Factors
Political factors are one of the major external factors which impact the business and long term
profitability of BHP Billiton in a market. In resource industry, BHP Billiton is operating its
business being on the top position. Most of the natural resources are owned by the nation and
authorized by governments. In Australia, the political environment is in the favor of BHP
Billiton as it has a huge support from government. It is the biggest organization in terms of
market capitalization thus government supports as it leads to the development of nation as a
whole (Dobscha, Mentzer, & Littlefield, 2015). Under this factor, one of the major aspects is the
trade relationship between Australia and China and China is the major source of BHP’s products.
In order to response his factor, the organization has made its relationship better with China. It has
invested hugely in African region as political instability can cause issues in manufacturing in this