Rio Tinto Company Analysis

RIO TINTO COMPANY ANALYSIS i
ANALYZING RIO TINTO COMPANY LIMITED IN AUSTRALIA
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RIO TINTO COMPANY ANALYSIS ii
Executive Summary
Strategic management determines the success of a business. A successful business
has a highly skilled labor force and managers who are capable of making viable future
goals for the business (Poister 2010, p.246). An analysis of Rio Tinto and the Australian
mining industry has been done in this report.
Rio Tonto has been performing well not only n Australia but also in other five continents
in which it operates. The company employs over 47000 employs and contributes
significantly towards the Australian economic growth. The Australian mining industry
has been contributing significantly towards the nation’s economic growth accounting for
10 percent of the nation’s gross domestic product. The industry is oligopolistic as it is by
a few large companies, out of which the key ones are Rio Tonto and BHP Company.
Epiroc Drilling Solutions has recently launched the RCS 5 drilling system which is
expected to improve productivity and lower production costs for Australian mining
companies by automating their drilling operations. In a nutshell, Rio Tinto and Australian
mining industry contribute significantly towards the nation’s excellent economic growth
and better results are anticipated in the future.

RIO TINTO COMPANY ANALYSIS iii
Table of Contents
Executive Summary..................................................................................................................................ii
Introduction................................................................................................................................................1
The Company and the Industry Description..........................................................................................1
The Rio Tinto Company Limited Overview........................................................................................1
The Australian Mining Industry Overview..........................................................................................2
Analyzing the Australian Industry Market Structure.............................................................................3
Determinants of Demand and Supply for Rio Tinto Products.............................................................4
Demand Determinants.........................................................................................................................4
Supply Determinants............................................................................................................................5
Demand elasticity for Rio Tinto Products..............................................................................................5
Factors affecting Demand Elasticity for Rio Tinto’s Products.........................................................6
A recent Event Analysis...........................................................................................................................6
The Rig Control System Launch (RCS 5)..........................................................................................6
Likely Impact on Supply.......................................................................................................................6
Likely Impact on Market Quantity and Price......................................................................................6
Conclusion.................................................................................................................................................7
References................................................................................................................................................8

RIO TINTO COMPANY ANALYSIS 1
Introduction
Business strategic management determines the success of a business. Strategic
management involves assessing, analyzing, monitoring and planning business
operations with the aim of achieving the set objectives and goals (Keupp, Palmié and
Gassmann 2012, p.367). Due to globalization, the business world today has become
competitive as businesses have access to information and strategies which they can
apply to outdo their competitors and remain in operation (McMillan and Rodrik 2011,
p.17143). By use of strategic management, businesses can analyze their past activities
and current performance and make future goals and undertake the necessary decisions
towards achieving the set future goals (Wheelen et al 2017, p.55). A business should
keenly analyze its performance and make viable future goals for it to remain
competitive. This can be done by analyzing a business and its industry to forecast future
outcomes and make necessary goals and decisions based on the analyzed information.
Rio Tinto Company in Australia has been analyzed in this report with considerations of
its operations internationally since it is an international company which operates in
various nations. Also, the Australian mining industry where Rio Tinto Company operates
has been considered. An analysis of various factors about the industry such as its
revenue and contribution towards the Australian economic growth as well as its
employment rate and the growth rate has been done. The industry’s market structure
and the demand elasticity for the company’s products have also been discussed. The
analyzed factors provide crucial information for use in planning the company’s future
strategic goals.
The Company and the Industry Description
The Rio Tinto Company Limited Overview
The Rio Tinto Company Limited is an Australian-British Multinational Corporation that
was established during the year 1873 after investors joined together and formed a
group that ended up purchasing mine from the government of Spain in Rio Tinto at
Huelva in the nation of Spain (Australia, 2017). Since its establishment, the company
has grown at a fast pace through various means especially the merger and acquisition
formation and is currently among the most valuable top world brands with it's brand
value estimate being $3.1 billion which is quite a vast brand value beyond the reach of
many huge companies worldwide. The company’s primary focus is the minerals
extraction but it also involves itself in refining operations especially the iron ore and
bauxite refining. It deals with a wide range of commodities which include iron ore,
aluminum, copper, diamond, uranium, coal, gold, alumina, borates, bauxite, salt,
molybdenum, talc, and titanium dioxide. It operates in six continents with its major
operations being significant in Australia and Canada. The company is jointly
headquartered in Melbourne, Australian, and London, United Kingdom.
Rio Tinto is among the top metal and mining corporations in the world. In Australia’s
ranking of the top public companies, it is ranked position one out of the more than 2000
Australian companies in the list. In terms of net income, Rio Tinto is ranked position one
worldwide with estimated revenue of over $67 billion much of which is contributed by its