Strategic Analysis of Adani Group: BMO6511 Strategy Workbook

This report presents a strategic analysis of the Adani Group, a multinational conglomerate with diverse business interests, including logistics, resources, and energy, with a focus on its operations in the mining industry. The analysis employs various strategic tools, including PESTEL, SWOT, and Porter's Five Forces, to evaluate the external and internal environments. The PESTEL analysis examines the political, economic, social, technological, environmental, and legal factors affecting the company's operations, particularly in Australia. The SWOT analysis identifies the company's strengths, weaknesses, opportunities, and threats, integrating them to formulate strategic recommendations. Porter's Five Forces framework assesses the competitive intensity within the mining industry, focusing on the threat of new entrants, the bargaining power of buyers and suppliers, the threat of substitutes, and competitive rivalry. The report also includes an overview of the company's financial performance and market position, providing a comprehensive assessment of its strategic landscape and challenges.

1
STRATEGY
WORKBOOK
BMO6511
Strategic Management &
Business Policy
Research Business ……………………………………….
Student ……………………………….. id ……………………………..
Student ……………………………….. id ……………………………..
Student ……………………………….. id ……………………………..
Student ……………………………….. id ……………………………..
Chosen Analysis:
PESTEL □
SWOT □
Porter 5 FORCES □
Industry Supply Chain □
If you do this assignment as an individual you select the one
analysis tool that you feel is the most relvant to apply, and you
must explain why.
If this is handled by a group, all four analysis tools must be be
used.
Word Count: Individual 1,500 Group 2,500
ASSESSMENT
ONE
STRATEGY
WORKBOOK
BMO6511
Strategic Management &
Business Policy

WORKSHEET 1: Over view of the Business
Adani is a multinational conglomerate of India which is located in Ahmedabad, Gujarat. The company was established in the year 1988 by
Gautam Adani as a commodity trading business. The group varied businesses included logistics, resources, agribusiness, energy, real estates,
defence, fincial service and aerospace. The vision of the company is to achieve a passoniate commitment to social responsibilities towards
fostering, suatinable, communities and integrated development just to improve the value of life (Adani Australia, 2018c). To reach at this
position, the mission of the company is to perform the duties as an organizer to provide the advantage to the people without any difference of
caste or community in the field of community health, education and advertising of social and economic welfare.
It has been evaluated that the company is growing in the continuous manner. The Annual turnover of the organization in the last five years are
10624.61, 12875.27, 11017, 8249.26, 2404.20 in the year 2015, 2016, 2017, 2018, 2019 respectively. The net profit for the last five years is -
225.23, 1530.62, 2229.63, -39.40, -504.55 in the year 2015, 2016, 2017, and 2018 (Adani Australia, 2018b). The organization acheieve the high
success just because of its employees. As the organization is operating in high revenue or in different fields that means it is a big corporation that
have more than 50 employees.
Geographic operations scope – The company mainly located in Ahmedabad, Gujarat but it operates at the global level as it operates in Australia,
Singapore and the other international locations. The company operates in the Conglomerate Industry (Adani Australia, 2018b).
2

There are many main competitor of Adani Group in Australia such as Coles, Wesfarmers, BHP, Rio Tinto and the others who operates the
business in cole mines as well. In Australia, the company provides the services of energy, infrastructures as it operates in the business of coles
amd mines (Mining Global, 2015).
3

Worksheet 2: External Environment PESTEL analysis
4

Economic Factors
It has been seen that the company will directly affected from the economic factors such as inflation, incomes, and investment decision of
government. In the country Australia, the rate of risk is high in terms of borrowing and investment. Australia is a large mixed market economy
with the GDP of A$1.69 trillion in the year 2017. The company can grow in the market as the government has more capability to invest in the
mining industry. In the year 2016, there were over 370 operating mine sites across the borders just because of heavy investment of the
government towards it. The economic factor defines the positive situation for the company in the terms of high growth (Export Gov., 2018).
5

Political/Legal Factors
The political factors state the legal decisions taken by the government towards the industry. The government of Australia is highly supportive
towards the mining industry just to develop the economy. As per the news, the mining company of Australia gives the money to the political
parties as the donation to get the favorable result for expanding the business. The government of Australia takes the favorable decision for the
mining industry. The main motive of mining industry is to spread the business in Queensland under the democratic process. Although, it is not
ethical but it is beneficial for the mining companies to operates the business in the market (Innis, 2016).
6

Socio-cultural Factors
It is observed that the growth in population in the rural areas affects the infrastructure of the industry. In the year 2016, the growth rate of
population in Australia is 1.5% which is increasing in the country or in rural areas due to which the requirement of healthy environment is
required to live (The conversation, 2018). The increasing number of people needs the space to live due to which the infrastructures of the
companies are affected. Health is also a major issues for the companies as the people does not lives near the mining industry due to high smoke
and the other particles.
7

Technological Factors
Australia is known for adopting new technologies at a faster rate than the other countries. The advance technology helps the industry to operate
the business effectively and smoothly. As per the report, technology is set to revolutionize the Australian mining sector. The Minerals Council of
Australia (MCA) states that in the next five years more than 77% of jobs in the country mining sectors will be altered by technological
innovation due to which the productivity is increases upto 23% (Evans, 2019). Technology factors helps to increasing the productivity of the
company.
8

Global Factors
Mining Industry is the global industry as it delivers the energy, and the other resources. Mining industries are the big company which is operated
as per the specific projects in different locations that is why; political trends are the major trend that affects the Australian markets. The decision
taken by the government of any country towards the industry directly affects the results of the organizations.
9

Demographic Factors
It has been observed that the social factors affect the mining industry as the increasing population affected the operations. Increasing population
affects the operation of industry as the people need more space for live free due to which the industries has to build or operate in small areas so
that the people live free.
It is observed that more energy is consumed while changing the lifestyle of people. The cost of energy is increasing due to high consumption of
them by the consumers. Raising the cost of energy is the biggest financial threat for the mining operations. Finance is the major component in
the mining industries as it requires the heavy investment in one project (Mancini, and Sala, 2018).
10

Worksheet 3: Identifying Opportunities and Threats
Factor Opportunity (O) or
Threat (T)
Why? Impact?
High, Medium or Low
Source of further
information?
Political Decision Opportunity As discussed above, the mining
industries give the charity to
government to spread the
business and the government
took the decision in the favour of
mining industry. That is why;
Adani Group has the opportunity
to spread the business (Adani
Australia, 2018).
High News Report
Technology Opportunity Advance technology improves Medium A general Website
11

the productivity of mining
industry due to which it can be
said that the organization has the
opportunity to increase the
productivity and earns the more
revenue or builds the brand
image in the market.
Enhancing life
style
Threat As per the above discussion, it is
observed that the changing
lifestyle increasing cost of
energy consumption and that is a
biggest threat for the mining
industry
High Science Data journal
Competitors Threat It is a threat for Adani Group
because there are several
Medium Competitive report
12

companies who operate the
mining business in Australia
such as BHP, Rio Tinto and the
others.
13

Worksheet 4:
Internal Analysis: strength and weakness assessment test
Strengths Why is this a strength? Weaknesses Why is this a weakness?
Strong brand
Image
Australain government gave the
final approval for construction to
operate the business of coal mine.
It is one of the six companies of
Australia that are approved to
operate in Queensland just because
of its strong brand image in the
market (BBC News, 2019).
Unfamiliar with the Australian companies It is observed that the company gets the approval
from Australian government but it does not know
about the other companies techniques of operation
that is the major weakness.
International
presemce
Adani Group is operated in
different locations in the world.
Fluctuation in Commodity Prices It is observed that mining companies operates the
business in high amount. Adani also operates at the
14

The business of Group in mine
industry in India, Indonesia,
Australia, Bangladesh, Southeast
Asia and China.
global level due to which the fluctuating prices of
commodity will affects the productivity of the
organization.
15

Worksheet 5:
Integrated SWOT
Analysis
Strengths
Strong presence at international level
Strong Brand Image
Weaknesses
Unaware about Australian companies
Fluctuation of commodity prices
Opportunities
Exapansion
Earn Revenue and
market share
It is observed that the company has strong
presence at the international level due to which
it can expand the business in another locations
as well.
As the company has strong brand image in the
market due to the approval of government of
The company has to analyse the competitive
environmebt by implementing the tools. After
analysing the techniques to operate the business, it
has the opportunity to expand the business by
beating the competitors.
The company has to always update about the
prices and it also has to predict the future prices.
16

Australia then it can be said that the company
expand the business and also earns the high
revenue. Using the brand image, the company
can grasp the high market share in the market.
Prediction is the best way to operate and earns the
high revenue and market share.
Threats
Risk of rasing
consumption cost
Competitors
By expanding the business at the international
level helps to build the strong relation with the
suppleirs due to which the company can reduce
the cost of energy consumption.
It is observed that the strong brand image helps
the company to compete with the competitors.
The company has tio understand the behavior of
the market while entering into it so that the
weakness of unaware about the organizations will
be reduces. The threat of the company can also
reduces by reducing the weaknesses as to
understand the market behavior, the company
build the relations with the suppliers due to which
the chances of raising the cost is decreasing.
Fluctuation the prices affects the organization but
if the company implement the prediction strategy
than the weakness will reduces and the company
can also gain the competitive advantage
17

(Zinovieva, Kuznetsova, Dorfman, Limarev, and
Limareva, 2016).
18

Worksheet 6: Industry Environment: 5 force analysis
19
THREAT OF NEW ENTRANTS
Low
BUYERS’ BARGAINING POWER
Moderate
SUPPLIERS’ BARGAINING POWER
High
SUBSTITUTES AND COMPLEMENTS
Low
COMPETITIVE RIVALRY
High

WORK SHEET 7 – OFFER COMMENTS ON YOUR ASSESSMENT
THREAT OF NEW ENTRANTS
It has been seen that the threat of new entrants is low as it requires the huge amount of capital to invest to establish the business due to which it is
difficult for the organization to enter the industry. It is also difficult to take the government approval that is why; the degree of threat of entrants
is low.
THREAT OF SUBSTITUTES
It has been analyzed that threat of substitutes is low as the process of operating the business of mining industry is natural. There is no other item
that can replace the coal mines or energy. It can be said that it is difficult to replace the coal mines or impossible that is why; the organization
has less threat of substitutes (Dibrell, Fairclough, and Davis, 2015).
SUPPLIER BARGAINING POWER
The negotiationg power of suppliers is high as there are very limited suppliers of mining industry due to which they have high demand in the
market.
20

BUYER BARGAINING POWER
Bargaining power of buyer is moderate as there are also other companies in the market that attract the consumers towards their organization by
providing the low prices or implementing other strategies. This states the high bargaining power of consumers. The mining companies are
limited in the market due to which the consumers have the limited choice to buy the services thus, the bartering power of customer is reduces. As
there are both the situations in the market that is why; it can be said that the bargaining power of buyers is moderate.
COMPETITIVE RIVALRY
21

It has been found that there are large number of competitors in the Australian market due to which the competition among the companies is high.
The main competitors of the company are BHP, Rio Tinto and the others. Each and every organization implements their own strategy to attain
the advantage in the competitive environment. Although, mining companies are limited at the global level but in Australia there are various
companies that operates the business in mining industry due to which the threat of competitors for the organization is high.
22

Worksheet 7: Assessing Competitive Dynamics
On each scale, place a circle around the number you consider as the closest position to the two extreme position labels for each scale
For example: - If you consider in item 1 that there are ‘no barriers’ or almost ‘no barriers’, then circle number 1 or2 . Alternatively if
you consider that it is ‘virtually impossible to enter’ or almost ’virtually impossible to enter’ then circle 6 or 7. If you consider it is
somewhere in between these extremes circle 3 or 4 or 5. Just circle one number per scale
1. Ease of entry of new firms into industry
No barriers 1 2 3 4 5 6
7
Virtually impossible to enter
2. Intensity of competition among firms
23

Extremely
competitive
1 2 3 4 5 6
7
Almost no competition
3. Degree of product substitutability
Many substitutes
available
1 2 3 4 5 6
7
No substitutes available
4. Degree of dependency on complimentary or supporting products and services
Many substitutes
available
1 2 3 4 5 6
7
No substitutes available
5. Degree of bargaining power buyers and customers possess
24

Buyers dictate
terms
1 2 3 4 5 6
7
Selling firms dictate terms
6. Degree of bargaining power suppliers and vendors possess
Suppliers dictate
terms
1 2 3 4 5 6
7
Purchasing firms dictate terms
7. Degree of technological sophistication in industry
High level 1 2 3 4 5 6 Very low-level technology
25

technology 7
8. Rate of innovation in industry
Rapid innovation 1 2 3 4 5 6
7
Almost no innovation
26

WORKSHEET 8: Industry Supply Chain
Supply Chain is the network among the company and its suppliers that helps to produce and distribute the specific product to the consumers. In
this process, it included all activities from manufacturing to delivering the resources to consumers. Supply chain analysis is the tool which is
used to evaluate the opportunities for growth of the industry within a region. The tool is implemented at the workplace of the Adani Group in the
following process:
Suppliers:
Suppliers of the company are the providers of machineries, and tools. It has been seen that the company takes the machines and tools from the
suppliers to operate the business effectively.
Exploration: After the suppliers, the company explore the coal and the other mineral resources on the regular basis. The process of exploration
takes time like 7-10 years.
Manufacturing:
After the exploration of resources, the company goes to the develop the infrastructure to produce the goods. In the process of manufacturing, the
development is the main stage to operate:
Development: The organization develop the infrastructure and the labour force for the construction.
27

The waste material has been eliminated at the earlier stage of manufacturing after that the resources is manufactured.
Production is the final stage to prepare or to produce the goods.
Storage:
The company maintain or store the resources in order to protect it from unfavourable atmosphere
Operations:
The company maintain the resource quality by kepting it in a secure place
It targets the market to promote the products of the company in the market by using the different tools such as newspaper, television and the
others.
In this process, the exploration of land is going on in continuous manner so that it can grasp all opportunities.
Transport:
The company transfer the resources by train or by the carriage loaded vechiles (Athreya, 2019).
Closure:
At the end, the company has to remove all machineries, equipments as per the specific contract with the Australian government for the operation.
28

WORKSHEET 9;
Summary and Emerging issues for the business
From the above analysis, it is observed that the Adani Group is growing in a continuous manner. While expanding the business in the market of
Australia, the organization face the challenges that affects its growth and efficiency of operation. As per the external environment, it has been
found that the changing the lifestyle of society may affects the cost of energy consumption due to which the company will face the financial
challenges in the future.The company also have high level of threat of competitors as the other companies are also operated in the similar
industry due to which the chances of competition is increasing. But apart from the challenges, the organization has the opportunities from which
they can grow in the market such as opportunity to expand the business in Australia in wide range and the other opportunity is to take the
advantage of advance technology just to grow in the market by enhancing the productivity. At the end, it is concluded that the companies also
has strong factors from which they can easily beat the competitors in the market or overcome the threats and weaknesses. It is recommending
that the company has to implement the strategies after analyzing the environment as the choice and trends will change with the passage of time
that is why; the chances of risk is high. Implementing the strategies or appropriating the process of operation the company will attain the higher
level of success in the market.
29

References
Adani Australia. (2018b) Energy & Innovation. [online] Available from: https://www.adaniaustralia.com/energy-and-
innovation#communitiesSec [Accessed 25/09/19].
Adani Australia. (2018b) Financials. [online] Available from: https://www.adanienterprises.com/investors/financials [Accessed 25/09/19].
Adani Australia. (2018c) Vision and Mission. [online] Available from: https://www.adanifoundation.org/about-us/vision-mission [Accessed
25/09/19].
Adani Enterprises. (2018a) About Us. [online] Available from: https://www.adanienterprises.com/about-us.html [Accessed 25/09/19].
Athreya, S. (2019) Understanding Supply Chain Management in Mining Industry. [online] Available from:
http://www.crushingnquarrying.com/2019/03/13/understanding-supply-chain-management-in-mining-industry/ [Accessed 25/09/19].
BBC News. (2019) Adani mine: Australia approves controversial coal project. [online] Available from: https://www.bbc.com/news/world-
australia-48618774 [Accessed 25/09/19].
Dibrell, C., Fairclough, S. and Davis, P.S. (2015) The impact of external and internal entrainment on firm innovativeness: A test of moderation.
Journal of Business Research, 68(1), pp.19-26.
30

Economic times.indiatimes. (2018) Markets. [online] Available from: https://economictimes.indiatimes.com/adani-power-ltd/yearly/companyid-
23479.cms [Accessed 25/09/19].
Evans, S. (2019) How technology is changing Australian mining jobs. [online] Available from:
https://www.mining-technology.com/features/how-technology-is-changing-australian-mining-jobs/ [Accessed 25/09/19].
Export Gov. (2018) Australia – Mining. [online] Available from: https://www.export.gov/article?id=Australia-Mining [Accessed 25/09/19].
Innis, M. (2016) Mining Companies Buy Political Influence in Australia, Report Says. [online] Available from:
https://www.nytimes.com/2016/06/30/world/australia/queensland-mining-political-donations.html [Accessed 25/09/19].
Mancini, L. and Sala, S. (2018) Social impact assessment in the mining sector: Review and comparison of indicators frameworks, Science
Direct, 57, pp. 98-111.
Mining Global. (2015) 2015 Edition: Best Mining Companies to Work for in Australia. [online] Available from:
https://www.miningglobal.com/top-10/2015-edition-best-mining-companies-work-australia [Accessed 25/09/19].
The conversation. (2018) FactCheck: is Australia’s population the ‘highest-growing in the world’? . [online] Available from:
http://theconversation.com/factcheck-is-australias-population-the-highest-growing-in-the-world-96523 [Accessed 25/09/19].
31

Zinovieva, C.G., Kuznetsova, M.V., Dorfman, T.V., Limarev, P.V. and Limareva, J.A. (2016) Study of external and internal factors affecting
enterprise’s stability. Advances in Systems Science and Applications, 16(1), pp.62-71.
1.
32