The aim of the essay is to discuss that long-term planning, program, the mission of the management and how the management works in a business and profit making organization. To know the policies, programs, and aim of the company management we have selected BHP Billiton organization.
BHP Billiton is a global Giant and world renowned company. This company was incorporated way back on 13th August 1885 with business operations of production and processing of rich minerals resources such as iron ore, coal, nickel, silver, aluminium, uranium, manganese, and potash. These natural resources were tapped and used in industrial growth. The company has grown in many folds from the date of its conception and initial operation and has business interests and operations throughout the world (“BHP Billiton | Structure and strategy”, 2017). The company has started its operations in countries which had rich mineral resources like Australia, United States of Mexico, Trinidad and Tobago and Costal United State of (Capricious).In Mexico, the company has its operations in two places namely first in Shenzi and another one is at Neptune (“BHP Billiton | Structure and strategy”, 2017). The company’s main stronghold is in the field of producing metals like copper, cathode, uranium and zinc concentrates. The company is a joint venture with Escondido mine in Chile in South America who is the largest miners and processors of copper and Olympic Dam in South Australia and manufacturer of uranium oxide. Escondido mine is located at the famous Atacama Desert in the Northern part of Chile. The company has the production capacity to produce more than 1.3 million tons per day and according to a study conducted on 30th June 2015, the company’s total production and output at Escondido was a phenomenon that was 916.1 kilotons of copper concentrate and 310.4 kilotons of a Copper cathode (“Strategic Report 2015″, 2015). The coal business is being run from its head office in Australia (Brisbane) and has earned the distinction of the largest producer of metallurgical coal of the world and through its operations in Mexico; it has become largest and biggest producer of coal.
The BHP Billiton is a global giant in the field of metal mining and producing industry. It has the global presence with more than 141 operational and business sights covering 26 nations (Garvey, & Garvey, 2017).BHP has earned the distinction of being world’s largest producer of copper, silver, lead, uranium and zinc BHP Billiton is also the world’s top iron producer (Garvey, & Garvey, 2017). The company has earned the top most position in metal and mining industry.
BHP Billiton is one of the makers of essential energy sources of the world on which the industrial growth and production depend such as oil gas LNG and atomic fuel and uranium.BHP contribution towards energy and power producing resources and processing them really notes worthy (Garvey, & Garvey, 2017). These extractions and processing of natural fuels is leading to environmental and climatic threats worldwide such as global warming and greenhouse gas effect due to release of carbon dioxide from burning of fossil fuels and this factor has become a major threat to operations of this company worldwide (“Strategic Report 2015″, 2015).
For a company with such large scale operations and structures, it becomes a difficult task for the company to distribute work and operations among various small scale business units. Only that business venture and organization will succeed which is able to access and overcome its internal weakness and makes and draws its strength and vitality (Ahmed, Bwisa, Otieno, & Karanja, 2014). The organization which accesses, reads, grab business opportunities is able to make giant leaps and gains in form of financial profits and gains and is able to increase its stake and share in the world market (Porter, & Siggelkow, 2008). The Boston the international consulting group matrix plays an important and vital role in an organization to evaluate and decipher the business jargon or give the category to its products services depending upon their share in market and growth rate in the industry (Bao, 2015). Boston has a unique way of highlighting the products which are very useful for the leader in allocating resources to small businessman (Bao, 2015).
The BCG matrix is separated into 4 squares such as the stars, the cash cows, the dogs and the question marks. The vertical axis of BCG shows the growth potential of a product. The upward line show the growth in the growth potential and the horizontal axis show the fruit produced and lots of fruit on the left and there is no fruit on the right (Killen, Jugdev, Drouin, & Petit, 2012). There is a circle in the centre which gives the full details of any product. This can begin with the story of problems child then its success and achievements and how he becomes a star then how he changed into cash cows and in the last stage how he turned into a dog
The business statics doesn’t show the real growth of the company but some information is surely available is true here moreover a very important question comes if there would be any growth prospect. In this world, many of the products begins some has to pass through hard stages
The prices of copper changes every day and copper segment is also affected by prices of copper due to this organisation has been planning a question mark strategy by keeping a low market share in China because of fall in the prices of copper but the policy of the company is to keep a high and increasing returns and speedy growth because of its future foresight of market trends similarly coal segment is negative
Shows the upper left side some of the rising stars exists there these kinds of an organization always give regular and perpetual growth and these products have the ability to produce cash and fruits. The organization segment of the iron ore follows the star strategy with the focus on the products sales in the Australia, with the intention of decreasing the cost of the production, which may help the organization obtaining the better shares related to the market (Tullo, 2010). In spite of the significantly decreasing growth in the steel output of the Chinese segment obtain a bigger share of the market. The coal corporation is continuously recognized as the highly valued, supporting the physically powerful long-term boundaries, which implies the following of the star strategy by the company Bhp Billiton in the Australian and Chinese locations (Tullo, 2010). Further growth in the supply of the coal segment represents it to be the Australian predominantly, which sets the organization directly at the position of the star on the Boston matrix.
These are the successful ones, and which are capable of even continuously grow till sky heights, also the limits of their ability to grow is the surely incomplete sight. A Lot of success has been achieved as a result of these, but there may be a possibility that with the passage of time, their growth may start to get reduced (Clements, & Li, 2016).
BHP Billiton Groups has a high market share in the Chinese location but low growth, which reflected in the price drops. This, in turn, decreased the revenues from the company’s associated segments. According to this dimension, the corporation has been following a cash cow strategy (Clements, & Li, 2016). The iron ore segment of the organization is facing persistent challenges related to the decline of iron price, workers strike as well as strengthening Australian dollar
Dogs- The related square includes the products that are neither growing nor producing the benefits for the company. This segment of the company encounters the low market challenges with the low market growth (Tullo, 2010). Whereas the cash cows tend to have the high market shares in the markets with the lower growth rate.
In the year 1980, the Michael Porter originated the concept of the value chain analysis various organizations have the similar activities which add value to the company. When such activities are in link with one and another resulted from the origin of the value chain analysis for the company. The following activities value chain includes the workings such as the, purchasing procedure, marketing, product manufacturing and the products distribution (Lapersonne, 2013). Value chain analysis is such a systematic framework which assists in identifying the business activities which creates the competitive advantage and the businesses value.
Value Chain Analysis is the process of creating maximum value for the consumers. Value chain plays an important role in the BHP Billiton progress (Marchi, Maria, & Micelli, 2012). The value chain of the BHP Billiton includes the following five elements.
Supply chain management include the inventory supervision, which is the major function for any of the organization (Hitt, 2011). Being the high scale organization, it is to be trouble-free for managing the freight charges as a result of the bulk freight thus the company may overcome the challenge of escalating the transportation costs.
Value chain on the operations part, the company invests on the larger part in creating the end products which are the bulk commodities (Fearne, Garcia Martinez, & Dent, 2012). The company invests on the larger part of achieving the sustainable development, including the employee’s safety. Employees are skilled to be conscious about the safety values in operations to effort accordingly with the purpose of causing the ‘zero harm’ to the surroundings (Hitt, 2011). The leading risk in the major value chain area is the cost containment.
In value chain analysis of the Bhp Billiton distribution is one of the vital functions. The other significant function of the value chain is to act as one of the maximum cost drivers. The company is having the biggest sea route freight carrier of the globe (Donnelly, 2011). The company is one of the major freight carriers of bulk shipping seaborne around the world. Distribution resulted as one of the significant cost drivers in the value chain. BHP Billiton is separated into seven consumer service group that are based on the main products lines which are strategically positioned in markets around the globe (Fearne, Garcia Martinez, & Dent, 2012).
BHP Billiton global headquarters are in Australia located in the city Melbourne, and all the marketing and sales activities of the company are managed from this position (Donnelly, 2011). Every market in the globe is positioned strategically taking into consideration the main product lines of the individuals (Donnelly, 2011). The company employees the ‘consumer centric’ promotional function which includes the affirmed value chain configuration of populace, knowledge and processes networks as the corporation internal operations part.
The focus of the company is on the consumer-centred marketing network with the purpose of involving community, methods, and networks knowledge into the chain. The value chain five support activities which are the R&D of the product, systems development, technology, HR management and the wide-ranging administration are the necessary part of the company internal operations (Hamilton, & Selen, 2006). The management of the company is in the situation of allocating the resources for projects development and managing the business for the financial and the staff performance.
The organization corporate culture is known as the ideology and the beliefs of the employees working in an organization. The culture of the organization also includes the employee behaviour and its effect on the profitability and functionality of the organization. The iceberg analogy refers the corporate culture of an organization where certain behaviour and symbols are examined and notice which can be easily visible by all (Hamilton, & Selen, 2006). With the help of certain measures, such things can be perked such as the negative and positive rumours within the company which is not considered by the senior management of the organization. The other few values and beliefs are deep rooted such beliefs, that are never seen and described but is followed by the workforce in the organization (van Egeraat, 2012). The employees mainly receive the guidance from the senior management and the founders of the organization.
The organization BHP Billiton is the mining industry which is known universally and is following the ethical corporate culture for its sustainability (“Strategic Report 2015″, 2015). The management of the company invests on the vast frame for the growth and development of the culture and the values with the expertise and the ability. The company introduced many of the strategies related to rewarding and motivating the employees for efficiently performing in the organization(“Strategic Report 2015″, 2015). The additional benefits are also given to the employees for making them loyal towards the organization. The organization also developed a special team for the purpose of keeping the check on the individual’s behaviour with these introducing new techniques which keeps and helps in maintaining the healthy and strong corporate culture (Marchi, Maria, & Micelli, 2012).
It is believed by the Michael Porter that the company strength is in generating and developing the below-discussed strategies divided into the three categories. The competitive strategy is believed to be originated with the understanding of the changes related to the concerned field (Miller, & Tsang, 2010). Michael E. Porter developed such model related to the generic strategies which may help the organization in analysing the competition of the market for its sustainability and also for creating the competitive advantage (van Egeraat, 2012). Three generic strategies of the Porters model are as follows:
The strategy helps the organization in achieving the higher profits as compared to the competitors in two different ways; primarily the supply of the products at the lesser rates under the strategy of the cost leadership(Ouzrout, Savino, Bouras, & Domenico, 2009). And the other is the products supply which is to be differentiated from the rival products in such manner that the customer willingly pays the raised prices for the products and is defined as the differentiation strategy.
Differentiation strategy is that ability of the company which helps it to provide the unique and the superior value to the buyers in terms of the product quality, services after the sale of the product and the special features (Ouzrout, Savino, Bouras, & Domenico, 2009). Bhp Billiton strategy is based on the low cost, diversified, and Tier One asset base which helps in the enhancement of the resilience of the company cash flow with reducing the exposure of the company towards any of the commodity or prevalence and hence provides the more robotic and predictable financial performance(van Egeraat, 2012) . Such strategy helps the company to invest and grow the business all the way through economic cycles thus delivering the better-quality long-term value for the shareholders of the company.
Cost leadership: The strategy of the Cost leadership helps the organization in achieving the lower costs compared to its competitors and also helps it to compete with the different range of the segments across the universe. The organization is to focus on the products with the lower prices without compromising the quality of the products (van Egeraat, 2012). The cost leadership strategy focuses on the standardized goods, size, differentiation, lower cost, experiences and to scale the economies. The organization focuses on reducing the operation cost with the halting investments and sharing the skills and the knowledge. The higher management of the company achieves the cost leadership with focusing on the opportunities related to the cost saving, waste reduction and also adding values to the less valuable products from the consumer perspective (van Egeraat, 2012). The Bhp Billiton focusing on the profit, with the below average return the company completed its business of the diamond sale into the Dominion Diamond Corporation in the year 2012, switching its focus towards the profitable operations of Potash
Such strategy helps the company to focus on the limited segment of the market. The strategy is to be applied by the organization for gaining the cost leadership or the diversification for the company.
Bhp Billiton strategy is to operate and own the long-life, large, expandable, and low-cost and the upstream assets that are diversified by the geography commodity and market (Petit, 2012). The company strategy remains unchanged for the last one decade and enabled in delivering the superior margins all the way through commodity and economic cycles for several years.
The company is based on the diversification strategy; for the success, the company needs the employee that reflects the communities and the values of the organization (“BHP Billiton | Structure and strategy”, 2017). The company aims to recruit from the host communities and attracting the individuals with the high calibre who are committed towards the success of the organization and thrive to work with the highly performing teams. The company is committed to developing capability and the skills of the people and believes to underpin it with the Tier one helps it to differentiate it from its competitors. The company is focused on the growing and developing the diversified portfolio of Tier One assets for meeting the changing needs and the requirements of the consumers (“BHP Billiton | Structure and strategy”, 2017). The products of the company are the raw materials which not only is responsible for the today growth but for the future growth.
The business related to the mineral examination is a risk endeavour. Bhpbilliton through the acquisition of the quality assets in its diversified portfolio areas will not only help in providing the growth potential and the stable returns but significantly the hedge in the business with this the financial risks in the hazy future of the company. The company is to invest in the capital and assets at the time when the commodity prices are low and with the implementation of the strategies such as the mergers, joint ventures and acquisitions will results in rectifying the key threats of the organisation to enter the emerging markets and to reduce its operational costs with the increased productivity.
Conclusion:
BHP Billiton is having the physically powerful position in the market as a result of its expansion in each and every market globally. The company is considered as one of the biggest producers of the coal around the universe. The internal environment affects the culture of the company in the direct or the indirect way (Petit, 2012). Bhp Billiton is having various strategies that lead the company and help it to maintain its position around the world. The company puts many of the efforts in building or developing the relationship with its suppliers, consumers, buyers, stakeholder, and shareholders. Comparatively the company paid the huge attention towards the environment by gathering power from the renewal resources which in turn will help in reducing the greenhouse effect (van Egeraat, 2012). Company’s main motto is to supply quality products and complete the company’s satisfaction.
Bhp Billiton shows the positive strategic performance of the company with appropriately addressing the issues related to employees of the company, cost cutting and declining in the commodity prices globally (“Strategic Report 2015″, 2015). The future prospects of the company include the further expansion into the Shale and the Potash industries. Expected increase in the future demand for the potash. Diversifies from the resources that are in a great way are sensitive towards the carbon pricing.
References
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