Business Strategy of BHP Billiton in Australia
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Added on 2020-04-01
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This study focuses on the business strategy of BHP Billiton in Australia, its competitive advantage, internal and external analysis, and more. The company's main strategy is to expand its upstream assets and develop unique products in the market. The study also highlights the PESTLE analysis and SWOT analysis of the company.
Business Strategy of BHP Billiton in Australia
Added on 2020-04-01
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TABLE OF CONTENTSEXECUTIVE SUMMARY.............................................................................................................1Introduction......................................................................................................................................1Company profile..............................................................................................................................1Competitors of BHP Billiton.......................................................................................................2BHP competitive advantage............................................................................................................2Australia steel industry....................................................................................................................3Business strategy of BHP in Australia.............................................................................................3Internal analysis...............................................................................................................................4External analysis..............................................................................................................................6PESTLE analysis.........................................................................................................................6Swot.............................................................................................................................................7CONCLUSION................................................................................................................................7REFERENCES................................................................................................................................92
EXECUTIVE SUMMARY Business strategy is all about the plans that a business prepares in order to accomplish itsdesired goals and objectives. The present study carried out is based on BHP Billiton which is anAustralian company that deals in mining, metal, and petroleum related products. The keycompetitors of the company are Arconic Inc, Rio Tinto limited and Vale S/A. Adoption ofadvanced technology aids in providing the competitive edge to businesses and it has been foundthat BHP Billiton strictly relies on advanced tools. The entire industry employs around 90,000people and has generated revenue of $11bn in the year 2014-15. Australia’s share in the worldsteel production has fallen as compared with the past. The main strategy associated with BHPBillion emphasizes on expanding its upstream assets so as to develop unique products in themarket. Another key strategy of the company focuses on exploration, undertaking advancedtechnology. The entire study carried out has supported in knowing about the business strategy ofBHP Billiton. Further, the business is operating efficiently in the market due to the presence ofeffective strategies.INTRODUCTIONBusiness strategy can be defined as the overall action plan developed by organizations toaccomplish their long and short term goals. In the modern era, the market where the businessoperates is full of challenges and this, in turn, acts as hurdle while carrying out overalloperations[ CITATION Ste14 \l 1033 ]. For analyzing the external environment of the businessPESTLE as one of the tools is undertaken the tool consists of factors such as political, social,legal, economic, environmental and technological that influences business performance. In orderto deal with these factors, the company has to prepare effective strategies that will maintain itsperformance. The present study carried out is based on BHP Billiton which is an Australianmining, metal, and Petroleum Company headquartered in Melbourne. The key products ofcompany include iron ore, petroleum, copper, nickel, and uranium, etc. The entire researchfocuses on business strategy of the BHP Billiton along with the macro and micro environmentalanalysis. COMPANY PROFILE BHP is a leading resource company that is indulged into the process of extracting andprocessing mineral, oil and gas. The company renders its products and services with the help ofmore than 60,000 staff members all around the globe[ CITATION BHP17 \l 1033 ]. The entire1
product range of the business is sold worldwide. The ultimate objective of the business is todevelop long-term value with its shareholders by carrying out development and marketing ofnatural resources. BHP Billiton is one of the main manufacturers of major commodities such ascopper, metallurgical coal and the iron ore. The key strategy employed by the business is lowcost, long life resources as per its business needs[ CITATION Rob09 \l 1033 ]. In order to growthe overall value of the company focuses on six key areas which are latent capacity, costefficiency, technology, onshore US, major projects, and exploration. By focusing on all these keyareas business wants to focus on its future growth and this, in turn, it is acting as thedevelopment tool for the company in every possible manner. Apart from this, the operationalmodel of the business is quite effective that has allowed business to gain the competitive edgeover its rivals. Competitors of BHP BillitonBHP Billiton operates in the market which is highly competitive as there are manyplayers operating in the industry. The key competitors of the selected organization are ArconicInc, Rio Tinto limited and Vale S/A[ CITATION DBH16 \l 1033 ]. All these companies areoperating in the same sector, and are offering products as per the actual need of the targetmarket. In order to efficiently deal with the issue of intense competition, various strategies havebeen undertaken by the business that enhances its market performance in every possible manner.The main competitive strategies employed by the business are low-cost commodities anddiversified product portfolio. It has been identified that the range of metal and mining products offered by the companyare sold at low cost and this, in turn, attracts customers. In short, cost leadership as one of themain strategy has been considered by the business for its long-term survival in the market. Dueto the high level of competition the company focuses on this strategy and it has helped inmaintaining the leading position of the firm in the market where it operates[ CITATION Mea13 \l 1033 ]. Apart from this, the diversified workforce present within the company also acts as themajor strength of the business in the Australian market. Therefore, this is the main competitivestrategy undertaken by BHP Billiton. BHP COMPETITIVE ADVANTAGELarge numbers of factors are present that have allowed BHP Billiton to gain competitiveadvantage. The main factor is diversity where different types of employees have been hired2
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