Orica Limited: Strategic Management Analysis and Recommendations

This report provides a comprehensive strategic management analysis of Orica Limited, an Australian-based multinational corporation in the agribusiness sector. The analysis begins with an executive summary and table of contents, followed by an introduction outlining the scope and objectives. The report then delves into a detailed PESTEL analysis, examining the political, economic, social, technological, environmental, and legal factors impacting Orica Limited. An internal organizational analysis assesses the company's resources, capabilities, core competencies, and competitive advantages. Recommendations are provided to overcome challenges, such as adopting vertical farming technology. The report concludes with a summary of findings and a list of references, adhering to academic writing guidelines and Harvard referencing style. The report fulfills the requirements of a strategic management assessment, offering insights into Orica Limited's operations and strategic direction.

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Orica Limited

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Executive Summary
Strategic management helps in developing as well as implementing the goals of the organization
and develops the means of achieving the overall objective. In this report, the analysis of the
internal and external environment of Orica limited is done. The recommendation is also provided
to overcome the challenges. However, from the PESTEL Analysis it finds that factors affect the
company in both negative as well as in positive way. In the internal analysis, it analyzed that
company has capabilities to take the competitive advantage. However, Orica Limited also face
several challenges like changes in the regulations, change in technology by the competitors. To
deal with these difficulties company can take the initiative to plant the cover crop and can use the
technology of Vertical farming.

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Table of Contents
Introduction......................................................................................................................................3
Orica Limited...................................................................................................................................3
PESTEL Analysis............................................................................................................................4
Political factors............................................................................................................................4
Economic Factors.........................................................................................................................4
Social factors................................................................................................................................4
Technological factors...................................................................................................................5
Environmental factors..................................................................................................................5
Legal factors.................................................................................................................................5
Internal organization........................................................................................................................6
Resources.....................................................................................................................................6
Capabilities and Core competencies............................................................................................6
Competitive advantage.................................................................................................................7
Recommendations............................................................................................................................7
Conclusion.......................................................................................................................................8
References........................................................................................................................................9

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Introduction
Strategic management involves in formulating as well as implementing the major organizational
goals. It is the initiatives, which is taken by the organization's top management on the behalf of
owners, based on consideration of resources and measurement of the internal and external
environments under which the organization operates. It provide Strategic management gives an
overall directions to the company as well as links the policies, structure, system with the overall
objectives of the company. The tools of strategic management help the company in
understanding all the external factors, which influence the organization as well as to know the
internal competencies, resources. However, through which company can gain the competitive
advantage by developing effective plans and by allocating the resources (Lynch, 2018). In this
report, Orica limited company is selected and the external environment as well as internal
organization is analyzed. In this recommendation for the future direction is also provided to the
company.
Orica Limited
It is an Australian-based multinational corporation that is one of the world's largest providers of
commercial explosives and blasting systems to the mining, quarrying, oil and
gas and construction markets, a supplier of sodium cyanide for gold extraction, and a specialist
provider of ground support services in mining and tunneling. The revenue earned by the
company was AUD 5.1 billion as well as the number of employees were 11,500 in the year 2016
(Gamot et al., 2019). In Australia, the company is also in the sector of supplying fertilizer and
pesticides. The headquarter of the company is in Australia, Orica Limited also provides mining
services in Australia that is Mining explosives, through this the revenue of the company were
$1,944 million in the year 2018 (Rees et al., 2019). In the agribusiness Orica limited, revenue
units is largely due to adopting the approach of holistic for the effective continuity of business.
The company developed two Precision™ specialist nitrogen fertilizers to provide the various
choices, it provide Precision™ UAN as well as Precision™ Ammonia according to needs as well
as requirements of the farms. It helps the company to enhance the performance of the crop as
well as providing the high rate of nitrogen to the crops in more efficient and effective manner.

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PESTEL Analysis
It refers to the structure of all the macro environment factors, which is used in the scanning of
the environment. It is the part of strategic management and is important when the company is
conducting the research in the market because this tool provides the complete idea of all the
factors, which are influencing the business as well as should be taken into concern. Further, the
PESTEL analysis of Orica Limited is discussed (Lynch, 2018).
Political factors
The political factors are the factors, which influence the profitability of the company because the
chances to sustain as well as survive are relatively different. The high rate of tax that is for the
turnover of $25 million, the tax rate is 27.5% in the year 2017-2018, which influence Orica
Limited to increase their revenue (Marfella, 2018). The state policy of the government is
particularly for the companies, which are in agribusiness that is the issue of licenses for
genetically modified organics; this policy is continued in the year 2019, which also affects the
company negatively.
Economic Factors
All the factors of Macro environment such as rate of inflation rate, rate of savings other rates
includes interest rate as well as the rate of foreign exchange rate, which find outs the demands as
well as the aggregate savings in the economy. The growth rate of Australia in the year 2018 is
low that is 0.9% in the year 2018, which affects Orica limited negatively because of lowering the
aggregate demand as well as expenditure of the consumer that is 193.276 USD in the year 2018
(Teh et al., 2018). The decrease in the interest rate, which is 1.5% in the 2019, affects the
company positively in the agricultural sector (Christ et al., 2019).
Social factors
The culture of the society as well as the methods of conducting the business also affects the
organizational culture under the environment in which the operations of the business takes place.
The attitudes, values as well as population of the consumers play an important to sustain in the
competitive environment. The rate of the population increases in the 2018, which is up to
25,088,636; this helps the company to produce the products according to the needs and
requirements of the consumers (Teh et al., 2018). The changes in the culture to purchase high

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quality crops, which affects positively and company developed Precision™ specialist nitrogen
fertilizers to offer various varieties to the consumers.
Technological factors
The technology used by the organizations is increases rapidly to gain the competitive
advantage. The fast changes in the technology at the higher rate sometimes also disrupt the
profitability of the organization because the company gets less time to adapt the changes. The
current changes made in the technology by the competitors of Orica limited that is in the year
2017, Wesfarmers used the Google Earth Engine in the services of commercial farming for the
greater efficiencies, which affects negatively to Orica limited, to introduced efficient technology
(Tretola, 2017). The speed of technological diffusion is also high, which also affects the
operation of Orica Limited.
Environmental factors
The different marketplace has different rules as well as standards of the environment standards,
through which the profitability of the company is impacted. The country in which the company is
operating the business also has certain standards to protect the environment. It is important for
the company to conduct the business according to the environmental standards. Orica Limited
operates under the policy made by the government that is the Act of Environmental protection,
through which company holds the license of Environmental protection (EPL No. 828). Orica
limited reduce the emissions, this helps the company in increasing the revenue that is in 2018 the
revenue was $1,944 million (Choo et al., 2018).
Legal factors
In the some of the country, the legal structure as well as institutions is not strong enough for the
protection of the rights in intellectual property. It is important for the organization to assess
before making entrance in the marketplace. Australia changes the legislations of Intellectual
property such as the Intellectual Property Amendment Bill 2014 as well as the Act of Intellectual
Property Laws Amendment in the year 2015 (Brodie, 2016). The Agriculture department also
amended the Act of Biosecurity in the year 2015; the Orica Limited has adopted the laws while
conducting the business.

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Internal organization
It is considered the manner in which the business is prearranged as well as structured to conduct
the activities. The structure of the organization is determined with the objectives of the
organization. The organization has the inner capabilities as well as competencies to gain the
competitive advantage and it also help the organization to sustain in the competitive environment
(Lynch, 2018).
Resources
The resources of the company refer to all the assets, which is used as well as controlled by the
organization to accomplish the overall goals as well as objectives of the company. The main
resources of the company are human resource, financial resource etc. Orica Limited operates its
business in the broad areas and it is very difficult for the industry to maintain and retain the
accessible resources to meet the demand and supply. The Ammonia and caustic soda are the
major raw materials used in the production of the chemical for making the crop effective
(Havinga et al., 2018). The company also has competent human resource because Orica Limited
provide Basic Agricultural Awareness training programs to the employees to provide
information about the safety measures as well as also provide knowledge about the practices of
farming.
Capabilities and Core competencies
The capability of the company is considered the ability as well as skill to handle as well as
manage the resources in efficient manner, which includes employees, raw material and other
resources. The Capability-based strategies are based on the concept that the inner resources as
well as core competencies should be distinctive, which results in increasing the profitability of
the business (Ansoff, 2016). The core competencies refer to the inner strengths of the company
through which it accomplish the mission as well as objective of the company. The core
competencies and capabilities of Orica Limited are competent and talented human resources
because the company provides the seven pillars training to the employees. In the year, 2017
about 45% of the employees were trained in this training (Sgobbo, 2018). This training helps the
employees in managing the things in effective manner like management of operations,
management of emotional intelligence etc. The other core competencies of the company is the
distinct values of Orica Limited that is providing safety to the people, environment and society,
work in the group, adding value in the business.

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Competitive advantage
It refers to the conditions that let the organization as well as country to manufacture the
innovative good as well services, which generates more value to the customer at the lesser price.
This helps the company to increase the profits in comparison to its competitors. Orica Limited
develops two Precision™ specialist nitrogen fertilizers like Precision™ UAN as well as
Precision™ Ammonia to give several options as well as choices for the consumer to gain
competitive advantage (Arora et al., 2018). The company also introduced various training
programs to the employees like training of six pillars so that they satisfy the need and
requirement of the consumers in effective manner. The other strategies like Strategy of managing
the environment is also introduced by Orica Limited. Orica Limited also introduced new model
for operating the business in the year 2015 to make the areas of the company close to the
consumers (Bhattacharyya, 2016). The aim of the model is to provide the delivery of the services
to the end consumer in effective manner.
Recommendations
Orica limited was generating revenue but in the agribusiness, the company is facing various
challenges. The main challenge of the company was to sustain in the competitive environment
due to innovative technology used by the competitors that is Wesfarmers adopt the Google Earth
Engine for the services of commercial farming to develop the higher efficiencies. The other
challenges are putting the right pricing as well as providing protection to the energy supply and
various threats related to the changes in weather, legislation of the government like in 2015 the
government of Australia amended the Biosecurity Act. To overcome these challenges Orica
Limited can use the Vertical Farm technology, through this company can make the production in
the layer of vertical stacked. This will help the company to grow within the urban environment
and however helps in providing effective fertilizers as well as pesticides in the faster rate at
lower price (Al-Chalabi, 2015). To deal with the difficulty of changing weather Orica Limited
can use the technology of Weather tracking this will help the company to provide the early
warning signals of frost as well as hail. The company can also take the precautions in timely
manner to save as well as managed the crops and helps in decreasing the losses (del Moral et al.,
2018). Orica Limited can adopt the policies of protecting the environment that is the company
can take the initiatives to plant the Cover crops; this plantation help the company stop the soil

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erosion. The company can also make the limited usage of the natural resources and allocate them
in an effective manner because of scarcity of the natural resources.
Conclusion
From the above it is conclude that, Strategic management provides various guidelines to the
organization as well as associates these guidelines with the overall goals as well as objectives of
the organization. Orica Limited is the multinational corporation of Australia, which supplies
fertilizer as well as pesticides, the revenue of the company increases continuously. From the
above it also conclude that many of the factors like political, economical affects the company
negatively through increases in the tax rate, decrease in the growth rate. Orica Limited also has
various capabilities as well as core competencies through which it can gain the competitive
advantage, the core competencies of the company are human resource, values of the company.
The company also has various challenges like change in the weather conditions, innovative
technology used by competitors, to overcome from this the company can use the technology of
Vertical Farm as well as Weather tracking technology.

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Provenance, 16.

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