The paper 'BHP Billiton and Strategic Choices" is a good example of a management case study. The aim of this report is to analyze the management strategies that BHP Billiton has been pursuing over the years in its bid to establish a position in the market and gain a competitive edge. The report will begin by conducting an external analysis with a particular focus on the threats and opportunities facing BHP Billion in the industry. The report will proceed to analyze the internal factors and their contribution to the company's competitive advantage.
The report will also involve the analysis of the strategies that BHP Billiton has implemented, including mergers and acquisitions that have contributed to its growth. The report will then evaluate the company's demerger move and conclude by providing the recommendations based on the analysis of the company. External Analysis Key Threats and Opportunities to BHP Billiton Although BHP Billiton has been involved in a number of strategic moves in its bid to establish a strong position and become competitive in the market, the company has been confronted with a number of external threats, which has greatly impacted its operations.
Firstly, since BHP Billiton is a mining firm, its operations are under the threat of government regulations and environmental policies. Mining and exploration activities have been blamed for the global warming effects that confront the world today (Harrison and Pelletier, 2001). The activities involved in the exploration and mining operations releases a huge amount of carbon dioxide which causes global warming effects. As such, a number of regulation and policy measures have been introduced to mitigate the global warming problem. They include the Kyoto Protocol of 1997, the Asia-Pacific Partnership on Clean Development and Climate, and the European Union Emissions Trading System (EU ETS).
Currently, the petroleum and gasoline assets of BHP Billiton in the United Kingdom are regulated by the EU ETS. As a way of minimizing greenhouse emissions, the Australian government set a mandatory renewable energy target of 20% by 2020 (Hubbard, Rice and Galvin, 2014; Hubbard and Beamish, 2010). These changes in regulations have significantly impacted the company's operations in most countries as the governments of different nations struggle to achieve their emission targets.
In fact, the company reveals that it has been under pressure from NGOs and environmental advocacy groups (Hubbard, 2004; White, 2004). Accordingly, such pressure and government regulations have forced BHP Billiton to commit huge amounts of funds towards minimizing greenhouse gasses. Consequently, the policies and government regulations are likely to affect the cost, expansion program and financial performance of the firm operations. Stiff competition is another serious threat to BHP Billiton. The mining and exploration industry has quite a number of large firms that the company has to compete with for the market share.
The major competitors that currently pose a huge threat to BHP Billiton include Rio Tinto (RTP), Anglo American (AAUK), Alcoa (AA) and Companhia Valedo Rio Doce (RIO). Despite the stiff competition, BHP Billiton has adopted effective marketing strategies that have ensured that it stayed ahead of its competitors. Furthermore, the threat of new entrant is very low.
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