International Business Strategies: BHP's Operations in India and China

Desklib provides past papers and solved assignments for students. This report analyzes BHP's global operations in India and China.

Assessment 2: Managing Across Borders
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Table of Contents
BHP Company Overview................................................................................................................3
PESTLE Analysis of India...............................................................................................................3
The PESTLE analysis of China.......................................................................................................4
SWOT Analysis of BHP..................................................................................................................5
References........................................................................................................................................7
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This report is prepared in order to make the PESTLE analysis on India as well as China. Further,
the company BHP has been selected as an example which has succeeded in the global strategies
implementation. A SWOT analysis of such company will be provided in this report.
BHP Company Overview
BHP is one of the trading entities of BHPO Group Limited was formerly also known as the BHP
Billiton. This is an Anglo- Australian mining, petroleum as well as metals listed company which
is headquartered in Melbourne, Australia. This company was also ranked as the largest mining
company in the world as per the market capitalization. This company has expanded its business
globally and it has proved to be successful in applying and implementing the global strategies to
a great extent (de Villiers, et. al., 2014). BHP is operating its business in both the companies
India as well as China. The BHP Billiton is committed to contributing towards the sustainable
development of the economy and society of China as well as India. It has succeeded in doing its
business worldwide and now has become the global leader in the mining as well as the resources
companies in the 25 countries worldwide.
PESTLE Analysis of India
The PESTLE analysis of India made is aiming to address few political, social, economic,
environmental, and technological as well as the legal issues in the country.
Political- India is considered as the largest democracy within the world and there is relatively a
very stable political environment in India. It has been identified that foreign direct investment is
being affected in India due to corruption. Though these challenges of the corruption faced within
the country are being combated by the growing awareness of the public as well as the
Government initiatives. The mining sector of India is also being affected due to some tough
decisions taken by the Indian Government.
Economic- The Indian Economy is the seventh largest economy of the world by the nominal
gross domestic product. It is expected that soon the GDP will grow more in the next subsequent
years. As per the research, it has been identified that the corporate tax rate in India is 30 percent
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which worth nothing that has been witnessed by the country during frequent changes in tax rates
over the years. It is one of the top companies which produce agricultural products. The import
list of India includes crude petroleum as well as pearl and precious stones and metals.
Social- There is a very gigantic market of the customers in India as India is considered as one of
the most populous countries. It creates a great opportunity for foreign investors and companies in
order to operate their business in India. The labor forces provided by India are also available on
cheaper rates which have encouraged several numbers of global companies to operate their
business in India. It is a multilingual, multi-ethnic as well as multi-religious country in India.
Several sectors of the world have got one of the most attractive marketplaces in form of India.
Technological- India is 3rd most advanced technological country of the world and all the tech
giants are considering India as a very good option in order to make an investment and operate the
businesses. There is the availability of a highly skilled workforce related to IT in India. There are
opportunities to use the workforce and technologies of India for the mining sector too to
effectively manage the operations.
Environment- Instead of continuous growth of India, there are several numbers of challenges
faced by the country India such as water pollution, floods, resource depletion as well as floods.
These environmental challenges are threats to a business.
Legal- India is considered as the famous destination of foreign direct investment. As per the
business scope as well as the requirements, the foreign investors, as well as the companies, can
set up their stores in India. There are several numbers of labor laws as well as the corporate laws
associated with the businesses in India.
The PESTLE analysis of China
Political- China is considered one of the most powerful countries in the world and the 4th largest
country as per the land area. There is a lack of political freedom in China which is an area of
concern. There is a lack of openness in the political system of China. China is the dominant
overseas investor and FDI of China has reached many countries over the past years. It is the third
FDI destination of the world (Geng, et. al., 2015).
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Economic- China is the second largest economy as per the GDP as well as on the basis of
purchasing power, it is the largest economy. There is also the cheap availability of labor in China
which is one of the main reasons why the foreign companies are looking to invest and operate
their business in China. The corporate tax rates are also lower which is 25%.
Social- China is the most populous country of the world and the people living in China long for
the status symbols such as the latest technology uses, smartphones, designer clothes as well as
the luxury cars as to demonstrate their success. It is a great opportunity for the domestic as well
as foreign companies to invest in China (Andersson, et. al., 2018).
Technological- There are several numbers of biggest tech giants in China and it has also set the
vision to be the leading country in the field of science as well as technology. The country is
leading towards the innovation-driven country rather than the labor-intensive economy.
Environmental- The environment of China is severely impacted by the rapid development of
the economy. There is a lot of industrial wastage, climate change as well as deforestation stated
in China.
Legal Factors- There are several numbers of laws followed by businesses in China such as the
employee remuneration, labor standards as well as the labor disputes. The different industries are
categorized in different categories such as encouraged, restricted and prohibited.
SWOT Analysis of BHP
Strength
 BHP is one of the most recognized natural resources organizations and has a very much
diversified portfolio of assets (Eberle and Weinhardt, 2016).
 It has delivered great financial returns in the past decades and the share prices are also at
risk.
 The dedicated and attractive customer services are being provided by the company.
Weaknesses
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 There is a requirement for improving the long term financial return on equity.
 The human resource management is quite a week in BHP organization.
 The corporate communications of the business are also weak.
Opportunities
 There are already several projects in the pipeline in order to execute.
 There can be made efforts to further strengthen the brand position of the business.
 The company can make and conduct the programs for greenhouse gas emissions.
Threats
 There is a continuously cost rise from the suppliers of the company.
 There are several political and legal threats faced by the company from the local
government.
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References
 de Villiers, C., Low, M. and Samkin, G., 2014. The institutionalization of mining
company sustainability disclosures. Journal of Cleaner Production, 84, pp.51-58.
 Geng, R., Bose, I., and Chen, X., 2015. Prediction of financial distress: An empirical
study of listed Chinese companies using data mining. European Journal of Operational
Research, 241(1), pp.236-247.
 Andersson, P., Zeuthen, J.W. and Kalvig, P., 2018. Chinese Mining in Greenland: Arctic
Access or Access to Minerals?. China & the Arctic, p.102.
 Eberle, J. and Weinhardt, M., 2016. Record linkage of the linked employer-employee
survey of the socio-economic panel study (SOEP-LEE) and the establishment history
panel (BHP).
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