The paper "Strategic Management in BHP Billiton” is a brilliant example of a case study on management. BHP Billiton is an Australian based top multinational corporation operating in the diversified resources and mining industry. The company was formed out of a merger of two large companies: Broken Hill Proprietary Company (BHP) from Australia and Billiton from the United Kingdom. BHP Billiton head offices are based in Melbourne, Australia and have a dual listing on the Australian Securities Exchange (ASX) as BHP Billiton Limited and on the London Securities Exchange (LSE) as BHP Billiton PLC.
The company’ s main commodities include coal, iron ore, copper, silver, manganese, nickel, titanium, aluminum, uranium, oil, and gas. BHP Billiton operates in 130 locations across 21 countries. In 2014, BHP Billiton had a market capitalization of about $179 billion and revenues amounting to $67 billion, with a net profit of about $14 billion. The company employs close to 124,000 people including contractors (BHP Billiton, 2014). BHP Billiton faces close competition from other industry players, such as Anglo-American, Rio Tinto, and Vera, among others. Still, the company remains a dominant player in the industry.
This report examines BHP Billiton’ s success in relation to the four criteria of sustainable competitive advantages. This includes a discussion on the company’ s key strategies including capabilities and competencies that have propelled it to its current success as a global leader in diversified resources. The company’ s overall strategy is “ to own and operate large, long-life, expandable, upstream assets diversified by commodity, geography, and market” . To realize this, BHP Billiton has built strong internal capabilities and competencies to drive its success. Through “ The BHP Billiton Way” , the company has continued to improve its internal efficiencies along the value chain.
BHP Billiton has built a strong capacity to handle bulk commodities and shipping activities. BHP Billiton owns several ships through which it offers high-quality freight services. This has resulted in cost savings for the company and efficiencies along the supply chain (Conti, 2010). The ships are also used to provide transportation services for other companies and, therefore, provide additional revenue for the company. The company also has an efficient marketing business unit that solely handles sales and marketing activities in key markets (Gutterman, 2011).
The business unit is located in the strategic location of Singapore, which has an efficient port system for easy freight and distribution to other parts of the world. Marketing for oil and gas is handled in Houston, USA, which is in the right location to feed the demand in the region. Other marketers are distributed in in14 cities around the world close to the customers (BHP Billiton, 2014). Moreover, through the “ Project River” undertaking BHP Billiton pretenders a great opportunity in creating shareholder value now and in the future.
The company’ s value is further enhanced by investment in a diverse and gender-sensitive workforce who are also competitively remunerated. The employees’ skills are enhanced through training especially on the health and safety standards. Through the BHP Billiton Charter values and Code of Conduct, the company engages and effectively communicates with its employees. BHP Billiton also promotes internal communication through various channels such as the internet, email, and intranet (BHP Billiton, 2014). This is to create an all-encompassing environment in which each employee feels spoken.
The company’ s organizational structure puts the required organizational foundation for efficient communication among all functional areas and facilitates the quick decision making necessary to save ongoing product development projects (Miles & Snow, 1984). In following the company strategy all the way through every stage of the economic and commodity cycles, BHP Billiton is “ guided by… values of Sustainability, Integrity, Respect, Performance, Simplicity, and Accountability” (BHP Billiton, 2014).