bhp billiton

Topics: Corporate governance, BHP Billiton, Strategic management Pages: 10 (812 words) Published: April 5, 2015
BHP Billiton Limited
Resourcing the Future

BHP Billiton Limited
Resourcing the Future
M. Nazmul Amin
Majumdar

Shiab Khan (13164039)
Sanzida Parvin
(13164025)
Tanzir Islam (13164087)
Yaishi Zaman
(12264035)
Ahammed
Riaz(13164009)

Ahammed Riaz
(13164009)

BHP Billiton Limited
Introduction

BHP Billiton was created through the

DLC merger of BHP Limited and Billiton
Plc. which was conducted on 29 June
2001
BHP Billiton is a Dual Listed Company
(DLC)
Headquarter is located in Melbourne,
Australia
Single management team
Voting rights to both arms

BHP Billiton Limited
Objectives

The Main Objectives Are
External and internal environment analysis
Indicator to measure BHP Billiton corporate governance
performance
Linking between BHP Billiton’s strategy drivers and the
company’s corporate governance agenda
Executive remuneration determination at BHP Billiton

BHP Billiton Limited
External Environment

BHP Billiton Limited
6 Segment Analysis

1. Economic Factors

• Inflation in energy, labor, operations, materials & exploration expenses
• Heavily dependent on the China economy for 16.8% of company revenue ($6.6b)

2. Social Factors

• Follow two Human Rights Principles
• Work for reduction of carbon dioxide

3. Environmental Factors

• Practice of ‘zero harm’
• Reducing greenhouse gas emissions in operations by 5% in 2007

BHP Billiton Limited
6 Segment Analysis

4. Political Factors




Political instability: Democratic Republic of Congo, Western Africa, Mongolia, and Kazakhstan
South Africa: 26% percent of the ownership rights in the
mining properties
Chile introduced a new 5% mining tax “royalty” .

5. Technological Factors



Highly updated and costly
Continuously changing products

6. Legal Factors


Fortes cue Metals Group: Loss of $5.5b AUD

Tanzir Islam (13164087)

BHP Billiton Limited

Porter’s Five Force’s Model

BHP Billiton Limited

Porter’s Five Force’s Model
Bargaining Power of Buyers- Low

• Not many substitutes available
• Price increases due to strong demand and limited supply of natural resources

Bargaining Power of Suppliers-High

• Labor, shipping and energy costs are determined by
suppliers
• Negligible substitutes available

Threat of New Entrants-Low

• Infrastructural setup cost is too high
• Rapid change in technology
• Limited scope of resources

BHP Billiton Limited

Porter’s Five Force’s Model
Threat of Competition-High
• Qualified mining staf
• Increased staffing costs
• Limited market

Threat of substitution-Low
• Not many substitutes for raw materials
products
• Relative price/performance of substitutes.
• Switching costs.

BHP Billiton Limited

Strategic Group Mapping

BHP Billiton Limited
Internal Environment

BHP Billiton Limited
SWOT Analysis

Strengths

Strong market position
Diversified revenue stream
Steady financial performance
Centralized marketing activities

Weakness

Lack of financial emphasis
Human resources issues
Weak in corporate communications
Limited area of business

BHP Billiton Limited
SWOT Analysis

Opportunities
Huge volume of project
Brand
Greenhouse gas emissions
Greenfield potassium project

Threats
Rising of overall cost:
Political threats
Reduction in demand from
China
Environmental issues
Intense competition

Sanzida Parvin (13164025)

BHP Billiton Limited
Corporate Governance

Q.1 What indicators would you use to measure BHP
Billiton’s corporate governance performance?
Corporate Governance
Corporate governance broadly refers
to the mechanisms, processes and
relations by which corporations are
controlled and directed

BHP Billiton Limited

Corporate Governance Indicators

Corporate
Indicators

Varity of Legislation and International
Laws
Distribution of Share, Profit and
Dividend
Formulation of senior executive’s
remuneration
packages
Maintain Natural...
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