International and Global Business: Expansion of BHP Billiton in China and United Kingdom

The report discusses the expansion of BHP Billiton in China and United Kingdom. It highlights the macro-environmental and geopolitical forces for both countries, development of trade policies, potential risks, dangers and business opportunities. The report also provides an overview of the organization and the new service they will be launching.

Running head: INTERNATIONAL AND GLOBAL BUSINESS
International and Global Business
Name of the Student
Name of the University
Author Note

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Executive Summary
The purpose of the following report is to discuss about the major issues related to expansion of
the business markets of the international organizations. The organization that has been chosen
here is the BHP Billiton based at Melbourne in Australia. The brief introduction about the
company has been given in this paper. The new service they will be launching is the extraction of
copper more to export to other countries for the economic growth of the countries. The two
countries that have been selected for its business market expansion are China and United
Kingdom. It has also been discussed about the risks, dangers and opportunities that the company
can face while expanding into these two countries. The various issues related to their macro-
environment have been developed and highlighted properly. Some of the important current trade
policies of these two countries have been discussed here as well.

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Table of Contents
Introduction......................................................................................................................................3
Overview of the organization..........................................................................................................3
Identification of the two countries for the market entry..................................................................4
Macro-environmental and geopolitical forces for China.............................................................4
Macro-environmental and geopolitical forces for United Kingdom...........................................6
Development of trade policies of China......................................................................................8
Development of trade policies of United Kingdom.....................................................................9
Potential risks, dangers and business opportunities in China......................................................9
Potential risks, dangers and business opportunities in United Kingdom...................................10
Conclusion.....................................................................................................................................10

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Introduction
The following report deals with the factors that arise within the context of the business
expansion for the various international companies. There are many scopes for the organizations
to discover the various regions to which they can expand and be successful for the quest of the
profits. it is the duty of the higher management of the company to analyze the various issues
within the company to determine whether they can expand into the concerned markets or not. In
this paper, the organization that has been chosen is BHP Billiton, a very successful organization
in the mining industry. The countries to which the organization will expand into are United
Kingdom of Europe and China of Asia. The important issues in the expansion of the concerned
organization will be discussed here in this report. They will look to extract more copper from the
mines of these countries as a part of their new service.
Overview of the organization
The organization chosen for this paper is BHP Billiton. It is considered as the largest
organization in the mining industry within the country (Bhp.com 2018). The headquarters of this
organization is located at Melbourne in Australia (Bhp.com 2018). The organization serves its
customers all around the world (Ang, Benischke and Doh 2015). The various kinds of products
that the company provides to its customers are coal, petroleum, copper, iron ore, nickel, uranium
and natural gas. The chairman of the company is Ken Mackenzie and the name of the CEO is
Andrew Mackenzie (Bhp.com 2018). They use supreme strategies to provide their customers
with the best service. This helps them to build the customer loyalty and the trust of the
customers. They go through the needs of the customers very well and are very active towards
solving the issues and problems of the customers effectively. The supply chain management of
the organization is very strong indeed and this is very important for them to meet the

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requirements of their customers (Bhp.com 2018). They want to retain the sustainable business
environment they have already developed. This will increase their benefits as well. The
equipment performance of the company is quite strong as well (Ang, Benischke and Doh 2015).
Identification of the two countries for the market entry
The two countries that have been selected here for the market expansion of BHP Billiton
are China of Asia and United Kingdom of Europe. These two countries are very strong in trade
and commerce all over the world (Raff, Ryan and Stähler 2012). China has a huge population
and it is very evident that BHP Billiton will have a large customer base over there. Millions of
customers will be benefitted by their sincere services indeed. As China is trying to lift more
copper from the miones this will be a huge benefit for the country through the efforts of BHP
Billiton.The expansion of the company to United Kingdom will also be a big boost for the
company as well since UK has a large customer base for almost all the industries as well. The
expansion strategy has already been very much popular for the organization indeed (Raff, Ryan
and Stähler 2012). The cost efficient services of the company will make them more affordable to
the customers as well. The organization will likely to grow within the premises of the overall oil,
gas and mining industry. The new technologies will help the copper extraction process in the best
ways as well. The use of the technology within the company will improve the effectiveness of
their services indeed. The organization will look to increase its effectiveness in the countries as
there is a huge opportunity for making such a profitable business over there. The opportunities
will have to be utilized in the proper manner as well (Triandis 2017).
Macro-environmental and geopolitical forces for China
Political

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China is considered as one of the most powerful countries in the world. It is both from the
aspects of the population and the political powers. It is the permanent member of the Security
Council of the United Nations. BHP Billiton will need a strong infrastructure to engage the cheap
labor force for their services which they will be able to get in China. This will surely be helpful
for them indeed (Triandis 2017). The infrastructure will be improved with the help of the
technology properly. The political environment of the country is quite stable and that will really
be helpful for the company as well. The investment in China by BHP Billiton will really be
helpful for them as well.
Economic
China is considered to be the second largest economic force in the world. The GDP of the
country is very high and the economic growth of the country is very rapid and fast as well. Many
economic reforms have been made in the country and that has helped the country to gain the
investments from the foreign countries (Gorodnichenko and Roland 2012). The company will be
benefitted because of the rapid urbanization in the country as this will open the door for the
country as per the customer growth is concerned. Thus BHP Billiton will be able to gain the
competitive advantage indeed.
Social
The total population of the country is over 1 billion. The people who belong to this
country believe in the collectivism rather than individualism. This is why the company must be
able to cope up with these issues since the people in Australian companies believe in the
individualism (Gorodnichenko and Roland 2012). The rate of poverty is very high in China. This

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is why they will look to eradicate this social evil. The expanding companies will look for the
cheap labor in the China but the aging population will be barrier for them.
Technological
China has the largest online population in the world over 700 million people. This is why
it will be a great advantage for BHP Billiton to create awareness about their presence in the
country properly (Baden-Fuller and Haefliger 2013). These things will work very effectively for
the growth of the company indeed. They have aimed to become the global leaders in
implementing the science and technology properly for the benefit of the common people. The
internationally expanding countries will be benefitted by the use of science and online
technology and attract the customers.
Environmental
As BHP Billiton deals with the oil, gas and mining products they will need to focus more
on the environmental issues in China. Some issues like the air and water pollution, increase in
the industrial waste, change of climate, loss or biodiversity and other issues have been emerging
in the country (Baden-Fuller and Haefliger 2013). This might create a negative impact on the
environmental balance as well. This is why BHP Billiton should look forward to save the natural
environment of China amidst the rapid development of their economy. They should take green
initiatives to reduce the industrial wastes and use eco-friendly materials indeed.
Legal
There are a number of laws and regulations that should be maintained in this country by
BHP Billiton. The remuneration and benefits of the local Chinese employees, the labor standards

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and other serious issues should be mitigated properly for retaining the brand reputation of the
company (Jurevicius 2013).
Macro-environmental and geopolitical forces for United Kingdom
Political
One of the greatest strengths of the country is its political stability. However some
political debates have arisen because of the Brexit issue. The political chaos has been created in
some of the regions indeed (Camisón and Villar-López 2014). This can be a problem for the
expansion for BHP Billiton in UK. Apart from that, the company has a very bright future in this
country indeed. The legislations and the foreign policy of the country can affect the business
opportunities to some level.
Economic
The economic growth of the country in the last few years has not been that much and the
growth of the GDP is not that much as well. These are the direct effects of the Brexit. This is
why these things will have to be dealt with proper seriousness. The British government is taking
the necessary steps to improve the GDP of the country. BHP Billiton can also be benefitted by
the large customer’s base. The inflation rate will have to be managed by the government to
provide the best and efficient services (Camisón and Villar-López 2014). If the copper extraction
project gets the success in United Kingdom this might do very good for the overall improvement
of the
Social

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The consumer market in the United Kingdom is huge. The labor market and the health
care system will have to be utilized by BHP Billiton in order to engage the employees and
maintain their health standards properly (Lu 2018). The population of the country is
multicultural. The organizations can explore these opportunities effectively as well.
Technological
UK is generally considered as one of the fastest improving countries on terms of
technological innovation process (Jurevicius 2013). The people are much dependent on the
economy. This will surely cater to the development of the country and BHP Billiton will also be
able to use the fast graded technology for their benefit.
Environmental
The environmental issues should be looked after properly by BHP Billiton. As UK is a
fast progressing country, the negative effects on the environment should be decreased as well.
The weather conditions are challenging and this might create a barrier for BHP Billiton to
prepare their products (Rugman and Verbeke 2017).
Legal
All the legislations and legal regulations related to payment, working hours, anti-
discrimination policies among the people and other issues should be dealt with properly by the
organization as per the British Government (Wagner and Hollenbeck 2014). The Employment
Act of the country should be obeyed by the country. Minimum wages should be provided to the
labor force there indeed (Cremona 2017).

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Development of trade policies of China
 The import substitution strategy will be followed by China for the development of the
trades.
 The FDI policies will have to be discussed according to the several parameters as per the
WTO (Alfaro and Johnson 2012).
 The Trade Balance of the country had turned to deficit from the surplus.
 They wanted to stabilize the external demand for the opportunities of the trades.
 The stimulation of the internal demand will have to be given the priority as well.
 The financial crisis due to the global recession has been a prime factor in determining the
trade policies (Wagner and Hollenbeck 2014).
 The protection for the importing trades will have to be given as well.
 Some trade remedy measures have been launched in this scenario as well.
Development of trade policies of United Kingdom
 The exit from the European Union will have a long issue regarding determining the trade
policy of the country (MacKenzie 2015).
 The trade of the United Kingdom will prosper in the best ways for the benefit of the new
emerging organizations and the organizations that are expanding into the country.
 The free trade policy is thereby followed in the UK. The experts have raised their concern
over the use of this free trade policy as well (Saviotti 2018).
 The trade will look upon to be much innovative in structure and the experts will surely
make the strategies much innovative and competitive for the betterment of the
organization like BHP Billiton (Cremona 2017).

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Potential risks, dangers and business opportunities in China
 The cultural difference will be a major factor for BHP Billiton to do business in China
since the people in the country believe in collectivism approach. The Chinese leaders
always believe in the obedience of the employees without raising any questions. This is
not the proper approach of the Western based organizations.
 The operating costs in China are higher than the other Asian countries. This might create
a financial problem as well (Saviotti 2018).
 The living standards of the people will surely increase with the growth of the people
within the country for using the technology within the operations of BHP Billiton.
 There is a huge opportunity for the company to make capital investment indeed.
Potential risks, dangers and business opportunities in United Kingdom
 The economic downfall because of the Brexit issue and global recession has led to a
negative impact on the business operations China.
 The climate change can be a huge potential risk for doing business in China since the
company BHP Billiton operates in the climate industry (Gillespie and Riddle 2015).
 The corruption in the social and political levels is also an issue relating to the business
expansion of BHP Billiton.
 The growing population can be a big opening for BHP Billiton to make a successful
business in UK.
 The commitment of United Kingdom to emit low carbon in the environment will help the
company to build an eco-friendly business in the country (Gillespie and Riddle 2015).

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Conclusion
As discussed in the above discussion, it can be said that the company BHP Billiton will
have great opportunities for higher profits in the Asian country China because of the vast
resources available with a cheap labor market. The macro environment and geopolitical issues in
the organization have been discussed. The solution can be drawn that China could be the best
suitable marketplace for BHP Billiton to provide the above mentioned new services. As China
has a huge population, they will need to have that service to be provided with. This will increase
the growth of the entire Asian economy positively.

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