The paper "BHP Billiton Strategic Analysis" is a great example of a business case study. Strategic management has been an evolving issue in the global market. In this regard, due to the merits and gains of the strategic management process application, a majority of the multinational organisations have adopted and applied this management approach (Hanson, Hitt, Ireland and Hoskisson, 2014, p. 13). One such organisation is the BHP Billiton Company, a market leader in the European and Australian mining industry. This report offers a strategic evaluation of the process through which the organisation applies the strategies management system approaches.
In particular, the report focuses on the adoption of industry alliances, acquisitions, mergers, and diversification strategies. In this regard, the report develops a detailed review of the extent and process through which the organisation blends its strategies with changing market topography. Finally, the report offers recommendations for the process through which the organisation proposed split should be managed for the long-term organisational strategic gains and market competitiveness sustainability. 2.0 External Analysis An external analysis repents the macroeconomic factors that affect organisational and industry operations. In this regard, although the factors have both direct and indirect impacts on the respective industries and organisational operations, such organisations lack control over them.
Therefore, in the wake of changing macroeconomic factors, organisations develop strategies that enable them to mitigate and optimise on any existing favourable external environment factors. In order to develop a strategic evaluation and analysis of the BHP Billiton Company, this analysis evaluates the Australian external market conditions, including the situation and condition in the mining industry listing the opportunities, industry competition and threats. 2.1 Industry Competition and Competitors One of the emerging industry competition aspects in the Australian market is the concept of backwards integration.
A backwards integration trend is described as a situation in which industry stakeholders, especially the primary producers and manufacturers in an industry develop alliances. In this case, a fundamental justification and rationale offered for such backwards integration trends in an industry is the need to develop sustainable operational frameworks in the anticipated market and industry changes. In this regard, a market forecast and evaluation of the Australian mining industry illustrates a growing trend of backwards integration Key organisational competitors emerging as a result of this practice application include The Alummin Limited and the CSR Limited Mining Companies respectively, that have experienced growing profitability since 2011.
In this regard, Morandin and Smith (2011, p. 41) stated that the Australian market, with the increasing market efficiency levels, has resulted in increased competition and the need for organisations to develop alternative competitive edges. As such, organisations have resulted in the use of backwards integration as a means of ensuring control and dominance of the production process. For instance, organisations in the mining industry have developed partnerships with not only peer processing industries, but with the key industry suppliers (Morandin and Smith, 2011, p. 47).
This is a strategic move through which the industry supply control is enhanced, to reduce entrants’ threats. Therefore, the organisation participation in backward integration practices will increase its overall market competitiveness. Although backwards integration strategies are a positive development in any industry, the forecasted projection of the trend into the future poses a major challenge to the BHP Billiton Company. In this case, the organisation is bound to lose its market dominance in the future, thus requiring a new strategy to counter the developments.
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