MGT5STR: Strategic Management Plan for Orica Limited's Global Growth

This report provides a strategic management analysis of Orica Limited, focusing on its potential for international expansion. It begins with an overview of the company and its operations, particularly its role as a supplier of explosives and blasting systems, as well as sodium cyanide production and ground support services. The report then identifies international opportunities, specifically in the New Zealand market, and conducts a PESTEL analysis to evaluate the political, economic, social, technological, environmental, and legal factors influencing Orica's potential in that market. The study further explores suitable international strategies, including transnational and global strategies, and discusses the most appropriate entry modes for Orica Limited. Finally, it offers recommendations for the company's future strategic direction in the chosen international market, providing a comprehensive assessment of Orica's prospects for global growth.

Running Head: STRATEGIC MANAGEMNT PLAN OF ORICA LIMITED
Strategic Management Plan of Orica Limited
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1STRATEGIC MANAGEMENT PLAN OF ORICA LIMITED
Executive Summary
The following report contains brief information about the organization Orica Limited
where the major objective is to identify the factors that are associated with the international
opportunities at the time of expanding their business globally. The study also identifies the most
suitable global strategy that has to be implemented by the respective organization to undertake
the operation on a systematic basis in the international market. The strategy that has to be
adopted by the company at the time of entering the market along with several recommendation
measures are added to make the study more understandable and effective.

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Table of Contents
Introduction......................................................................................................................................3
Discussion........................................................................................................................................4
Company Overview.........................................................................................................................4
International opportunities for Orica Limited..................................................................................5
PISTEL analysis of Orica Limited in New Zealand........................................................................5
International Strategies for Orica.....................................................................................................9
Most suitable mode of entry strategy for Orica Limited...............................................................10
Recommendations..........................................................................................................................11
Conclusion.....................................................................................................................................11
References......................................................................................................................................13

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Introduction
The following report is a brief study about the organization named Orica limited where
the major objective of the study is to conduct a detailed discussion about certain situations that
can be undertaken in the respective company at the time of expansion in New Zealand market.
Orica limited is considered to be the multinational corporation of Australia, where they are
the well-known suppliers of explosives and blasting systems which are on a commercial basis to
the industries which are involved in the functional aspects of mining, quarrying, oil and gas
and to many any other markets which are into the construction industry under all terms. As a part
of supply system that are associated with the respective company, the major function which are
undertaken in the organization is the production and supply of sodium cyanide which are
distributed in the market to the industries that are involved in the function of extracting gold.
The other major factor that are related to the functional aspects of the organization is
based upon the service that are rendered by them as a part of ground support operations for
activities like mining function and tunneling activities that are performed by the industries.
The key objective of the study is to analyze the international opportunities that are associated
with the respective organization and design a suitable international strategy which is required to
be implemented by the respective organization in the market. The other part of the study is based
on the function of discussing the appropriate and inappropriate entry system that has to be
adopted by Orica Limited to ensure a systematic entry and persistence in the global market.
There are also certain recommendations added to make the report more effective and innovative.

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Discussion
Company Overview
 Orica limited is considered to be the multinational corporation of Australia, where
they are the well-known suppliers of explosives and blasting systems which are on a
commercial basis to the industries which are involved in the functional aspects of
mining, quarrying, oil and gas and to many any other markets which are into the
construction industry under all terms
 As a part of supply system that are associated with the respective company, the major
function which are undertaken in the organization is the production and supply of sodium
cyanide which are distributed in the market to the industries that are involved in the
function of extracting gold (Brezniak 2015).
 The other major factor that are related to the functional aspects of the organization is
based upon the service that are rendered by them as a part of ground support
operations for activities like mining function and tunneling activities that are
performed by the industries.
 As compared to the operational aspects that are associated with the internal environment
of the respective organization, the total revenue earned by the company in the
Australian market is AUD 5.1 billion along with this the total number of employees of
Orica Limited is 11’500 as per the data of 2016.
 The most highlighting factors about the respective organization are that, they are also
considered as the largest producers of fertilizers and Pesticides in the Australian

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market. The key factor that are associated with the respective function can be that, the
production of ammonia mixture and the content of nitrogen fertilizers which is
considered to be a supportive factor for farms in order to develop a proper system of crop
cultivation.
International opportunities for Orica Limited
According to the current operational aspects that are associated with the respective
company, as they are planning to expand their business operation in an international basis the
best part of expansion for the respective organization made in the New Zealand nation
(Hauptman & Kim 2015). As a part of enhancing better operational aspects for Orica limited
in New Zealand, a PESTEL analysis is conducted to create an understanding about the
macro environmental factors that are associated with the internal environment of the company
at the time of expansion. As compared to the functional aspects of the respective organization
different factors that are associated with the changes in the macro environmental system may
enhance them to gain a proper system of competitive advantage in the market as compared
to the competitors associated with the company in the market.
PISTEL analysis of Orica Limited in New Zealand
Political Factors
 In the respective nation, they have a strong labor law policy where the rate of lending
is high as compared to other nations. The tax rate associated with the respective
nation is low as compared to others where the companies only have to pay least amount
of taxes to the government (Hauptman & Kim 2015). This will enhance Orica limited to

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deal with their market operations by gaining more competitive advantage in New Zealand
where this will help in determining the growth and profitability of the company in the
new market.
 As compared to Orica Limited, the organization is into the independent business, New
Zealand can be a better option for them to expand the business where the government
offers a systematic platform for the new companies to operate their business without
any discrepancies.
Economic Factors
 As compared to the business prospective factors that are associated with the respective
nation they have a strong economy along with systematic rate of per capita income.
This will help Orica Limited to increase the buying power for the company in the market.
 The price value that are associated with the products are low in the market which may be
easy for Orica Limited to involve into the process of effective functioning and
manufacturing system by adopting systematic purchasing power of capital goods in
the market.
 In order to introduce an existing business in the respective nation the most beneficial
factors can be that the nation has a strong inflation rate positive GDP value in the
market. For a company like Orica as they are expanding their business in the New
Zealand market, they are required to pay huge amount in the beginning stage apart
from this they can earn a better value of profitability by getting involved in the
selling system adopted in the new market.
 As compared to Orica, there operations are associated with the supplying systems in the
market where the particular nation can be better option for them to establish business.

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Social Factors
 The most beneficial factor which is associated with Orica in the New Zealand market can
be that the respective economy supports the function of business operation in the
respective nation where the companies are mostly involved in the functioning of creating
joint venture with other nations to undertake their operations effectively in the
market.
 The government norms and conditions that are associated with the function of labor
laws, wage legislation system along with the terms and conditions that are associated
with the company act rules are more specific and strictly followed in New Zealand.
Thus, there is less chance of causing discrepancies in the selected country for Orica
Limited in their market operations.
Technological Factors
 As compared to the technological factors of the respective country they have a strong
base of literacy rate in the market, thus it can be a standardized system for Orica to
gain and understand knowledge regarding the market operations and business
implementation strategies that has to be adopted in the market.
 It can be a better platform for Orica Limited to introduce new business strategies
and technique in the New Zealand market as the respective nation is involved in the
functioning of adopting new ideas regarding the business operation to enhance strong
system to the companies in the market (Wolf et al., 2015).

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Environmental Factors
 The respective nation is 900 kilometers away from the Australian nation, thus it can
be more easier part for Orica Limited to adopt a systematic mode of expansion in the
market where it they can maintain a systematic customer base in the market as compared
to their current operations.
 The productivity and growth factor can be increased at a tremendous rate through
adopting business functioning both with the new and existing customers in the market
where there is less chance of causing any kind cultural difference within the
organization.
Legal Factors
 The government norms and conditions of New Zealand changes after every three
months which creates impact on all sectors of the respective nation, where it can be a
competitive part for Orica to move according to the changing terms and conditions to
undertake effective operations in the market.
 The other negative part can be that in New Zealand the profit margin for the
companies are low as compared to other nations.The major part is where the
companies are required to pay huge amount of lending tax system to the
government.
 The positive part according to the respective nation’s business operations in based on
where the government offers huge freedom to the trade system which may be a
competitive advantage for Orica to expand their business in New Zealand to
undertake a positive mode of operation in the market.

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International Strategies for Orica
According to the business conditions and factors that are associated with the respective
company Orica Limited the most appropriate strategy which can be considered as the major
part of implementation in the company can be based on the operational aspects that are
associated with the transnational strategic system (Lms.latrobe.edu.au, 2019). Some of the
major factors that can be considered as the most supportive part for Orica in international
expansion for the systematic application of this respective strategic process are mentioned
below:
 By adopting systematic implementation of transnational strategy, this can enable
Orica Limited to enhance and adopt competitive advantage in the global market by
introducing new ideas and technique to their global operation where this generally
supports the company operations that are associated with the international market.
 This respective strategy may help the organization in adopting better growth strategies
and profitability function in the international market.
 Transnational strategic operations are considered to be more adaptive and flexible
under all terms where as compared to Orica Limited this may allow them to adopt
better sales strategies and marketing strategies in the market.
 Apart from the functional aspects that are associated with the transnational strategies for
Orica Limited, the other strategy that best suits for the organization in the New Zealand
market can be Global strategic function (Motohashi 2015).
 The advantages of implementing global strategy for Orica can be that, in the new market
this may enhance them to adopt a step to step growth according to the economic system

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of the respective nation (Motohashi 2015). This may help in them in remaining more
competitive against any discrepancies depending upon the market competitions.
 Adopting a multi-domestic strategy can make them more connected with the customers
in the market, where under this respective function the organizations tend to give more
importance towards the customer prospective based on their wants and expectations.
Most suitable mode of entry strategy for Orica Limited
 The most suitable and appropriate mode of entry strategy that can be adopted by the
respective can be the system of adopting joint venture in the market, where this
respective function may enhance them to upgrade their operational functioning in the
market with their current limited capacities (Shishido et al., 2015). Orica Limited may
be able adapt new and advanced innovative features to the market along with the
effective method of merging with strong distribution networks and markets under all
aspects. Under the system of joint venture function the respective company can maintain
a systematic brand name along with enhancing a better flow of production cost in the
market.
 The most inappropriate entry mode at the time of performing expansion on an
international basis can be the process of buying a new company in the current nation
where it can lead to several controversies and issue like they may be liable to change the
current systems and procedures that are associated with the current organization. This
can be a time consuming process where this requires huge investment and budget
rates to deal with the respective situation. The other disadvantageous factor can be that

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the upliftment of the business may take a longer time at some situation this may also
create a negative impact on the existing business strategies adopted by the organization.