BHP Billiton: A Comparative Analysis of India and China Markets

This report provides an overview of BHP Billiton's international operations, focusing on its entry and current state in the Indian and Chinese markets. It examines the company's successes and failures, influenced by factors such as political and social issues, infrastructure, and governmental policies. The report compares the operational environments in both countries, highlighting the challenges faced in India versus the opportunities presented by China's rapid urbanization and economic growth. Furthermore, it discusses BHP Billiton's future strategies, considering the increasing demand for resources like iron ore, steel, natural gas, and copper in both markets. The analysis incorporates research and academic references to support its findings, offering a comprehensive understanding of BHP Billiton's global strategy and its prospects in these key Asian economies.

International and Global Business

Introduction
 Started operating in the year 1885
 Headquarter at Collin Street, Melbourne
 Trades in coal, iron ores, natural gas and copper.
 Made its expansion in some of the Asian countries such as China,
Malaysia, Korea and India (Cottle & Keys, 2014).

Entry into Indian and Chinese
Market
 Operating in the Indian market
for over thirty years.
 One of giant suppliers of
energy coal to the Indian
market.
 Set its foot in the fields of
natural gas in modes of
liquefied gas and LNG (Ma,
2013).
 By 2050, the country will
eventually grow to be one of
the four largest economies
(Hurst, 2015).
 Chinese market is one of the
largest and sustainable
consumer base of the raw
materials.
 Over the course of 30 years,
the Chinese market has been
claiming to be of 15% of the
world consumption (Cottle &
Keys, 2014).
 Rapid urbanization and
infrastructural growth is the
primary driving force.

Current State of Operation
 The Indian market needs to be adaptive.
 The company is facing hurdles due to
certain political and social issues.
 Labor unrest, political red tapes and the
unwilling nature of the local government
can create problems (Agrawal, 2015).
 China has been able to withstand the
economic depression largely.
 The country witnesses a rapid
urbanization as well as development of
the cities.
 Chinese government plays significant
role in building favorable environment.
 Stringent taxation policies.

Success and Failure in the Market
 BHP Billiton is looking forward
to a significant growth in the
Chinese market.
 the country is witnessing a
significant development in the
technological and industrial
sectors.
 China is lowering down its
demand for steel.
 Demand for steel and iron ores
will be decreasing around 60%
by the year 2025 (Agrawal,
2015).
 Due to the poor infrastructure
and stringent governmental
policies, the organization has
witnessed a significant loss in
the organization (Hurst, 2015)
 BHP has surrendered several
mining fields.
 delay in the New Exploration
Licensing Policy (NELP)
(Agrawal, 2015).

Future Developments
 BHP is banking on this hope of
the infrastructural growth of
India.
 Estimated increase in demand
for iron ores and steel is around
170 million tons by the year
2025 (Malhotra, 2014).
 India has produced 97 million
tons of unpurified steel in the
year 2016-17 (Agrawal, 2015)
 In China, growth in natural gas
import is seen to be around
26.9%, whereas for iron ore
and crude oil are 5% and 10%
(Hurst, 2015).
 Copper is going to be the metal
of having highest demands.

Referencing
Agrawal, P. (2015). The role of exports in India's economic growth. The Journal of
International Trade & Economic Development, 24(6), 835-859.
Cottle, D., & Keys, A. (2014). Open-cut coal mining in Australia's Hunter Valley:
Sustainability and the industry's economic, ecological and social implications.
International Journal of Rural Law and Policy, (1), 1-7.
Hurst, L. (2015). Assessing the competitiveness of the supply side response to China's
iron ore demand shock. Resources Policy, 45, 247-254.
Ma, Y. (2013). Iron ore spot price volatility and change in forward pricing mechanism.
Resources Policy, 38(4), 621-627.
Malhotra, B. (2014). Foreign Direct Investment: Impact on Indian Economy. Global
Journal of Business Management and Information Technology, 4(1), 17-23.