Strategic Position, Strategic Choice and Strategic Action (Implementation) for Bhp Billiton

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Curtin Business School School of Management
313418 Business Analysis for Management 542 February 2012 This unit is managed by School of Management/CBS Page 16 of 20 CRICOS Provider Code WA 00301J, NSW 02637B SCHOOL OF MANAGEMENT Research Report COVER SHEET |

GROUP Name: Group 9| ASSIGNMENT: Written Report|
Unit Name | MANAGEMENT 542 (Business Analysis) | Unit Index No. | 313418 | LECTURER | A/Prof Chris van Tonder | SEMINAR Day/Time | WED: 11h00 – 14h00 |

Dong Liang ID:14095278
Soobraty Fadil: 13795412
Kang Shi: 14341269
Rhianwen : 14983632

Contents
Introduction/Executive Summary3
Case Organisation4
Current strategic positioning5
Internal Strategic Position5
EXTERNAL ANALYSIS10
Analysis of company’s Strategic Choices & Implementation considerations12
Strategic Options13
Recommended Strategic Choice: Mixed Strategy15
Recommendations16
Conclusion17
References18
Appendix21

Introduction/Executive Summary

This report provides an analysis of current strategic position, strategic choices and implementation of BHP Billiton. Several methods included in the analysis of strategic position such as company value chain, Porter five forces, SWOT and PESTEL analysis. A lot of those analyses are available in details in the appendix section. The strategic options have been formulated using TOWS matrix, Internal/External matrix and Ansoff Matrix. The recommended strategic choice is the most appropriate when taking the strategic position into account. Then we’ve discussed on the strategic action of our chosen strategy and recommendation was given. There are some limitations in the report which include the lack of strategic theories because we’ve concentrate more on apply different concept.

Case Organisation

BHP Billiton Group is world’s largest diversified natural resources company. The group has a global presence with more than 100 operations in 25 countries. It is headquartered in Melbourne, Australia and employs about 41,000 people. The group recorded revenues of $37.48 billion of the six months end of December 31, 2011. The operating profit of the group was 9.9 billion. It was incorporated in 1885 in Broken Hill, New South Wales. The main operation is about oil and minerals, such as iron ore, coal, copper (Cu), aluminium, nickel (Ni), oil, liquefied natural gas (LNG), magnesium (Mg), and diamond and so on. Billiton’s roots trace backs to 1860 and a tin mine on a little island in Indonesia, Billiton island. Billiton became a global leader in the metals and mining sector and major producer of aluminium and alumina, chrome and manganese ores and alloys, steaming coal, nickel and titanium minerals. Billiton also developed a substantial and growing copper portfolio. In 2010, BHP Company celebrated their 150th anniversary and three significant milestones: Billiton’s establishment on 28 October 1860 and BHP listing on the Australia and London stock exchanges on 29 June 2001. BHP Billiton’s strong presence and leadership position in a number of significant markets gives the group a substantial competitive advantage and also increases its cross selling opportunities. However, intense competition in the industry could lead to loss of market share and put pressure on the group’s margins. (BHP Billiton, 2011)

Current strategic positioning
Internal Strategic Position
Company value chain
The value chain is based on the procedures of organization’s activities, such as material input, transformation, distribution, consumption, and services (Porter, 1985) Value chain for BHP Billiton

1. Inbound Logistics – supply chain management
2. Operations – Mining process
3. Outbound Logistics – distribution of commodities
4. Marketing and Sales - activities inform buyers of commodities, induce buyers to purchase them, and facilitate their purchase. One of the five value chain primary activities in BHP Billiton is supply chain management which is the most costly...
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