Market Analysis of BHP Billiton

This report provides a market analysis of BHP Billiton, a global resources company. It includes a SWOT analysis, PESTLE analysis, market segmentation analysis, and target market recommendations.

Marketing Management
Marketing Analysis
AQF Level 8

EXECUTIVE SUMMARY
The present report introduces about the BHP Billiton company and this is dealing in the
Iron ore, natural gas, petroleum, copper and nickel & uranium. This report mainly reflects
Australian ownership share of the BHP Billiton Marketing AG through BHP Billiton Limited is
58%. “Top- up tax” paid to ATO under the Australia's Controlled Foreign Company rules on
profits of BHP Billiton Marketing AG (Singapore branch) for period 2006-2014 was A$945
million. BHP Billiton company developed the effective or better strategy in order to deal with the
strong competitors at marketplace.
Apart from it, there has been study about the market analysis of the BHP Billiton by
using the internal and external analysis. At context to the internal analysis, SWOT analysis
conducted to identify the strengths, weaknesses, opportunities and threats of company in a
detailed way. At macro level, PESTLE analysis determined the political situation of country and
its impact on the organisational productivity, economic situation, social factors, technological
changes and the advanced technology, legal rules and regulations which arise the complexities in
conducting business and environmental factors. BHP Billiton makes segmentation on the basis of
geographic and target the different markets.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
1) INTRODUCTION.......................................................................................................................4
2) MARKET SITUATION ANALYSIS.........................................................................................4
2.1 SWOT Analysis ...................................................................................................................4
2.2 PESTLE Analysis..................................................................................................................5
2.3 Stakeholders..........................................................................................................................7
2.4 Collaborators.........................................................................................................................7
2.5 Competitors...........................................................................................................................7
3) MARKET SEGMENTATION ANALYSIS...............................................................................7
3.1 Geographic Segmentation.....................................................................................................8
3.2 Demographic Segmentation..................................................................................................8
3.3 Behavioural Segmentation....................................................................................................8
3.4 Psychographic Segmentation................................................................................................8
4) TARGET MARKET RECOMMENDATION............................................................................9
5) CONCLUSION...........................................................................................................................9
References .....................................................................................................................................10

1) INTRODUCTION
Market analysis is attractive and dynamics of special market within special sector. This is
mainly business that shows information related to market in which it operates. It is qualitative
and quantitative assessment of market. The market analysis investigates market size, both in
value and volume, different customer segments, economic environment and competition in
context to barriers to entry and regulation. BHP Billiton is known as a trading entity of the BHP
Group Limited. It was founded in the year 2001 and served in all over the world. This is an
Anglo- Australian multinational mining, petroleum and metals company in Australia. The main
purpose of conducting this report is to do the market analysis of the company. This will be
discussed in the light of marketing situation analysis in order to properly examine the internal
and external factors. Appropriate and effective way to segment market about the specific product
has been analysed in a detailed manner in the body of the report (Alalwan and et. al. 2017).
2) MARKET SITUATION ANALYSIS
Market situation of plan consists of research as well as analysis of target market, business
challenges, competitors’ differentiators of company and rivals. This should contain best and clear
explanation of present state of marketplace. Before preparing marketing strategy, this is
necessary to conduct situation analysis to identify business health. This kind of analyse served as
useful tool for identifying strengths and weaknesses of business and opportunities and threats,
which can impact on health (Amado and et. al. 2018). Other than this, macro- environment
mainly restricts as well as growth potential.
2.1 SWOT Analysis
The SWOT Analysis is a study that is undertaken through company to determine internal
strengths and weaknesses and its external opportunities and threats. It is helpful in examining the
competitive position of firm and develop the strategic planning (Cervenka et. Al. 2016). SWOT
analysis of BHP Billiton are discussed below:
Strengths Weaknesses
 This has developed culture between
dealers and distributors where dealers
promote goods of company, but also
 Organisational structure is compatible
with the business model, this is limiting
the expansion in product segments.

invest in the training to sales team.
 BHP Billiton is successful at
conducting the new projects and
generated the better capital returns
expenditure through developing the
new revenue streams.
 Less investment in the new
technologies. Provided scale of the
expansion and various geographies firm
is planning to be expand. There is
requirement to put money on the
technology for integrate processes
across the board.
Opportunities Threats
 There is an opportunity to develop level
playing area for all players in industry.
This represent better opportunity for the
BHP Billiton, to drive its benefits in the
new technology and gain, the market
share in new product category.
 The stable free cash flow gives the
opportunities for invest in adjacent
goods segment. With the more cash in
the bank, an organisation can invest in
the new technologies and new goods
segments.
 Rising the raw material can be pose
threat to profitability of BHP Billiton.
 Changing the customer purchasing
behaviour from the online channel
could threat to present physical
infrastructure that driven the supply
chain model.
2.2 PESTLE Analysis
It is strategic management framework used for determining, examining, organising and
monitoring the external factors which can have influence on company present and in future. This
examines the opportunities as well as threats because of Political, Economic, Social,
Technological, Environmental and Legal factors in order to inform the planning as well as
decision making (Troiano et. Al. 2016). Regarding this, PESTLE Analysis of BHP Billiton
mention below:
Factors Explanation
Political factor BHP Billiton is global resources firm that is

mainly susceptible to the political factors. They
can have main impact on the key drivers of
company like growth options, license to
operate and project pipeline.
Economical factor BHP Billiton is sensitised to economic factor
of the exploration expenses, energy costs,
operational costs, labour cost and operational
costs. These could impact adversely on
expansion plans of company, profitability and
development projects.
Social factor This factor needs firm to support the local
communities financially and give effective
resources for the infrastructure like housing,
schools and roads (Fernández-Morales,
Cisneros-Martínez and McCabe 2016).
Technological factor BHP is based on technical factors of the
exploration, discovery and mining. It relied on
use of the technology for purpose of
exploration. Investment in the technology is
necessary expenditure for business.
Legal factor BHP Billiton has faced the legal liabilities in
rulings to causing the environmental damage at
Southwest Copper operations which impact on
the financial performance.
Environmental factor BHP company follows the public policies and
regulations related to environment consisting
1997 Kyoto Protocol, recycling and renewable
energy, European Union Emissions Trading
System etc. This company follows practice of
the zero harm and sustainable development

(Cortez and Johnston 2017).
2.3 Stakeholders
Stakeholder is an independent party with whom those make wager deposit money. The main
stakeholders in a company are its staff members, suppliers, investors and customers. In context of
BHP, its stakeholders consist of local communities, shareholders, and investors, employees’ unions,
contractors, and customers, media, government, partners and NGOs Hadi, (Abdullah and Sentosa
2016).
2.4 Collaborators
The collaborators are third parties that directly work with company to assist or support in
development or implementation of strategy. This consist of vendors, consultants and warehouses.
BHP Billiton has good brand image at marketplace, and it has global collaboration with the
international universities in order to accelerate deep understanding of capture and storage (CCS) in
range of the subsurface locations (Hollensen 2019). Its current partners are American Red Cross,
The Brookings Institution, Commonwealth Scientific and Industrial Research Organisation
(CSIRO), Desert Support Services etc.
2.5 Competitors
Competitors of company are those trying to sell the same goods or services to similar
people. The competitors of BHP Billiton are Tronox Mineral Deposits, Rio Tinto and Oil States
International. While examining the rivals is necessary, this should not take priority over
underserved requirements of company internal and external consumers. As BHP Billiton is a
global resources firm. Firm is producer of the different commodities consisting iron ore,
uranium, copper and the metallurgical coal (Martínez-López et al. 2018).
3) MARKET SEGMENTATION ANALYSIS
Market segmentation is procedure of dividing market of the potential consumers into the
groups, segments and based on characteristics. Segments developed are composed of the
customers who will similarly respond to the marketing strategies and who share the traits like
same needs, interests and locations (Dangelico and Vocalelli 2017). There are four types of a

market segmentations: demographic, psychographic, geographic and behavioural. these types of
the market segmentation are discussed below:
3.1 Geographic Segmentation
This is a common strategy that serve the consumers in specific area or when the target
audience has various preferences based on located area. This consists of grouping the potential
consumers through country, region, state and city. The potential consumers have requirements,
interests and preferences which are varied based on geographic, understanding climates of
consumer groups that aids in identifying where to sell as well as advertise. As BHP Billiton
conduct its business all over the world. It was the third biggest Melbourne company in terms of
revenue (Olimovich, Kudratovna and Sayfitdinovich 2020).
3.2 Demographic Segmentation
This is popular and main kind of the market segmentation. This is the market
segmentation based on age, race, gender, religion, ethnicity, income level etc. It can mainly be
segmented into the different markets which assists a company to target its consumers in an
accurate manner. BHP Billiton can make the segmentation on income level.
3.3 Behavioural Segmentation
This is form of the marketing segmentation that mainly divide the people into various
groups which a particular behavioural pattern. The users may share similar lifecycle stage, buy
specific goods and have the same reactions to messages. This kind of the segmentation consists
with purchase behaviour, occasion, benefits required and customer loyalty. In context to this kind
of segmentation, customer loyalty is more necessary. The focus of BHP Billiton is to provide
high quality of services to its customers so that they can be loyal towards company and
enhancing the organisational productivity (Sadeghirad et al. 2016).
3.4 Psychographic Segmentation
It is primarily, used in the marketing research as market segmentation form that divides
customers into the subgroups based on psychological characteristics consisting conscious beliefs,
priorities and motivations in order to explain as well as predict the consumer behaviour. This is
mainly the process of developing the cluster of consumers which share the same characteristics
and after grouping them together. These kinds of clusters will develop customers subsets based
on interests, social class and lifestyle (Shaytura and Kozhaev 2016).

Justification
From the above discussion, this has been examined that the market segmentation of BHP
Billiton is on the Geographic basis. It operates on a global scale with more than 30 locations all
over the world. In each continent, except Antarctica, there is mine or office (Valenzuela et al.
2017). The geographic segmentation has been chosen because at the different locations, there
could be more resources availability, large number of customers and suppliers. This basis of
segmentation is helpful in providing the benefits to business in context to increase sales and gain
profitability.
4) TARGET MARKET RECOMMENDATION
Target market is a group of the consumers within serviceable business available market at
which the main aim of business marketing its resources as well as efforts. Target market is subset
of total market for specific service or product. The better strategy of BHP Billiton to have is
capabilities, commodities and assets in order to develop the high returns and long-term value.
BHP Billiton can target the high-income level people and the large size projects which will be
profitable in future. On the other hand, target market is based on what product is, such as
petroleum goods will not aimed for energy firm (Ismagilova et al. 2017). Organisations such as
energy Australia use the coal to power the stations would be targeted through BHP Billiton when
selling the coal. Other than this, petroleum would be more focused on selling to organisations
which supply the oil to public or small firms. The rationale behind using these target market is
that company has the proper availability of the resources and provide it effectively.
5) CONCLUSION
In conclusion, from the above mention report, the marketing analysis is necessary for
examining the market situation of the company. In order to analyse the market, there has been
internal and external factors are considered like SWOT Analysis and PESTLE Analysis. SWOT
analysis is related to examining the internal factors and determine the strengths, weaknesses,
opportunities and threats of company in a detailed manner. On the other hand, PESTLE analysis
has been conducted for examining the macro environmental factors which impact on the
organisational productivity and profitability. There has been marketing segmentation analysis of
firm conducted based on different segmentation types. For instance, Psychographic
Segmentation, Behavioural Segmentation, Geographic Segmentation and Demographic

Segmentation in a detailed manner. This helps in examining the proper segmentation of the
market effectively. The recommendations about the target market has been covered
comprehensively so that it can be helpful in the future to increasing the growth and profit level.

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