BIZ202 Business Environment: Analysis of BHP Billiton's Micro Factors

This report provides an in-depth analysis of the micro-environmental factors impacting BHP Billiton, a leading global resource company. It examines the influence of competitors, suppliers, buyers, employees, shareholders, and media on the company's operations and growth. The report identifies...Read More

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BHP Billiton: Micro Environmental Factors

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Table of Contents
Introduction................................................................................................................................2
BHP Billiton...............................................................................................................................3
Micro-environmental factors..................................................................................................3
1. Competitors.....................................................................................................................3
2. Suppliers and distribution channels................................................................................3
3. Buyer...............................................................................................................................4
4. Employees.......................................................................................................................4
5. Shareholder.....................................................................................................................4
6. Media and social media..................................................................................................4
Challenges..............................................................................................................................5
Solution...................................................................................................................................5
The threat of the new entrants.............................................................................................5
The threat of the suppliers..................................................................................................6
Buyers.................................................................................................................................6
The threat of the substitute..................................................................................................6
Conclusion..................................................................................................................................7
Bibliography...............................................................................................................................8

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Introduction
BHP is the globe leading resource organization. The company’s products are sold
globally, with sales & marketing directed through Singapore and Houston, United States.
The company’s goal is to abstract and process mineral, oil, and gas. BHP Headquarters are in
Melbourne, Australia. The company operates under the dual listed corporation framework
with its two parental companies namely (BHP Group Limited and BHP Group Plc). This
company operates as these companies are a single entity known as BHP (Acquisdata, 2016).
The company’s purpose is to increase the value of the long-term shareholder by the
acquisition or discovery, and advertising of the natural resources. The corporation increases
the values with the help of their plan: to own and function large, long-life, low-cost,
inflatable, upstream assets expanded by commodity, geography, and marketplace.
This report will emphasis on the BHP Billiton company micro-environmental factors
of the company. This will also be going to give the outline about the effect on the growth of
the company by the micro-environmental factors and recommendation to solve such
problems.

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BHP Billiton
Micro-environmental factors
1. Competitors
The competitors of the BH Billiton of the company are having a direct influence on
the business plans and goals. The company has to focus mainly on the entrance of the
competitors. New entrants in Industrial Metals & Minerals gets innovation, new methods of
doing things & put the burden on BHP Billiton Limited over lower pricing plan, reducing
costs, and provided that new value propositions to the consumers. BHP Billiton Limited has
to accomplish all these challenges & build effective hurdles to protect its competitive edge
(Cavusgil, 2015).
2. Suppliers and distribution channels
All the company, which belongs to the metal and mineral, buy their raw material from
the various suppliers. The dominant position of the suppliers can decrease the margins of the

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BHP Billiton. In the mineral industry, the powerful supplier uses its negotiating power to
remove prices. This result in the lower profit to the company.
3. Buyer
Buyers are of a demanding nature. The customers always want to buy the best at
minimum prices. This emphasis put pressure on the profitability of the BHP Billiton in the
long run. The smaller & more powerful the consumer base is of BHP Billiton Limited the
developed the negotiating power of the consumers and higher their aptitude to seek
increasing reductions and suggestions (Barin Cruz, 2007).
4. Employees
Skilled employees help in fulfilling the goal of the organization. Skilled workforce
can help an association to attain organizational goals. As expert and experienced workers
have the expertise to this start with the recruit procedure and continue over regular and timely
teaching and growth periods. BHP Billiton hires employees who have the best knowledge of
their work. In Australia, the company gets the manpower at a low price which can be
considered as one of the most competitive advantages.
5. Shareholder
The shareholder of the organization has a very huge influence as the organization
wants to have more and more numbers of the investors to increase make a decision to upsurge
shifting to public from private possession. This change the company pressure as the
shareholders seek a return on the venture.
6. Media and social media

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Media can affect the organization badly if the organization does not maintain a good
relationship with the media. BHP Billiton is having a good relation with media which is
helping the company to give a tough competition (Connell, 2010).
Challenges
While microenvironment factors such as competition norms and various other impacts
the competitive advantage of the firm, performance, organizational structure, revenue,
growth, and market share of the company.
Factor such as competitors affect the company performance by affecting the market
share of the company. Sometimes media and social media affect the company’s growth in the
market. Buyer and suppliers result in decreasing the revenue of the company.
Organizational structure of the company is also affected by the company’s micro
environmental factors (Wakui, 2017).
Solution
The threat of the new entrants
 By introducing the new product which helps the company to gain more and more
customers and also give the reason for the old customer to buy the product of the BHP
Billiton.
 By increasing the economies of scale, which can help the company to lower it,’s fixed
per cost.
 By increasing the expenditure on research and development.

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 By defining the standard regularly help the company in overcoming g the problem with
the competitors because it results in the reduces the window of extraordinary revenue for
the new firms (Reay, 2013).
The threat of the suppliers
 This can be overcome by building an effective supply chain with various suppliers
 Can experiment with the product designs by usni9ng various kinds of material in case the
price goes up.
 By increasing the dedicated suppliers whose business depend upon the firm.
Buyers
 By focusing on the large base of the customers which will result in decreasing the
bargaining power of the customers.
 By fastly innovating the new products. By giving a new product to the customers can
limit the bargaining power of the buyer.
 Threat among the Existing Competitors
 By establishing the substantial differentiation.
 By achieving the standard scale which can help the company in competition better.
 The company should compete with its competitors rather than just competing with the
small market (Hübschmann, 2015) .
The threat of the substitute
 BHP Billiton should be service oriented rather than product oriented.
 The company should focus on the core needs of the customers instead of focusing on
what the consumers are buying.

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 By developing the switching cost for the consumers.
 These are all the way that can help the company in overcoming with the various
problems which the BHP Billiton is facing (Speight, 2014).
Conclusion
From the above it can be concluded that there various micro-environmental factors which are
effecting the performance growth of the company. To overcome such problem various
recommendation has been given to the company in the above paragraphs. Implementation of
the recommendation needs the involvement of all the employees & several departments
within the company.
Bibliography
Acquisdata. (2016). Bhp billiton (ase: Bhp) . Corporate Snapshots.

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Barin Cruz, L. A. (2007). Company and society. Management Decision.
Cavusgil, S. K. (2015). International business : The new realities. Pearson Australia.
Connell, J. &. ( 2010). Strategic hrm : Contemporary issues in the asia pacific region. Tilde
University Press.
Hübschmann, H. (2015). Handbook of gc-ms : Fundamentals and applications . Hoboken:
Wiley.
Reay, D. R. (2013). Process intensification: Engineering for efficiency, sustainability and
flexibility.
Speight, J. &. (2014). Environmental management of energy from biofuels and biofeedstocks
(Energy and environment book series). New Jersey: John Wiley & Sons.
Wakui, A. S. (2017). Environmental factors determining the distribution of highland plants at
low-altitude algific talus sites. Ecological Research, 183-19.