Contemporary Strategic Management Perspective †MyAssignmenthelp.com

Question: Discuss about the Contemporary Strategic Management Perspective. Answer: Introduction The present study is focused on environment evaluation of BHP Billiton by considering their external and internal business factors to determine their strategic efficiency. The study will include a description of trends in Australian steel manufacturing industry and their current strategy to assess their competitive advantages. For better presentation and understanding of subject matter tools such as SWOT and PESTLE analysis will be applied. BHP Billiton Limited is an international company engaged in the development of natural resources. The company manufactures a range of commodities such as iron ore, uranium, copper and metallurgical coal. Division of company is inclusive of Coal, Petroleum, Iron Ore and Copper. The division of Petroleum segment is totally involved in the examination, growth and productivity of both gas and oil (Boons, Quist and Wagner, 2013). The division of Copper is completely involved in gold, copper, lead, zinc, silver, molybdenum and uranium mining. The division of Iron Ore segment is involved in Iron ore mining. Lastly, the division of Coal is involved in metallurgical coal as well as thermal energy coal mining. The business management contains Australias and Americas Minerals, advertising and Petroleum. The industry is engaged in extracting and practising oil, minerals and gas from its operations of productivity established in America and Australia (Young et al. 2014). Product distribution is m anaged by the industry by its large-scale chains of logistics containing goods and transportation of pipelines. The companys business contains Australias and Americas Minerals, advertising and Petroleum. Internal and external analysis Strength BHP is one of the successful and reputed companies of natural resources with a varied range of assets. The company has a great image and position in the marketplace (Peng, 2016). BHP has served class financial returns in preceding five years. The industry through an aggressive program of share buyback in order to return their capital amount to investors. BHP is a strong international operator aiming at sustainable growth and development along with a tough record of the track with no significant downside negative brand awareness because of the issues with the stakeholders. Weakness Lack of experienced staff further having damage on operations, so there is a need for training, area development and recruitment Poor company communication is another weakness of BHP as there is lack of active replies (Grant and et al. 2014). This can be cured by using new media or better communication among groups. Opportunities Implementation of creative marketing strategies as an active promoter of the entity by making use of new media techniques and outreach of customers, at the same time marketing of natural resources from the wide ranging assets of the company (Lodhia and Martin 2014). In order to widen the brand so as to increase the self-awareness of customer of operations and strengths of the company. Threats Suppliers increasing costs, inflation in the environment, issues regarding labour staffing are considered as the major threats faced by BHP at present stage of growth and development (Hubbard and et al. 2017). International Operations usually endangered by environmental factors, and the industry must mainly aim at sustainable development and good communication among stakeholders, in order to prevent delays in operations or customer relationship damage due to environmental interests (Steyn and Niemann, 2014). Political factors BHP Billiton Limited is an international company of resources which is liable regarding political factors risks in all the markets. Political factors create a great influence on key factors of a company such as operating license, pipeline projects, development choice and high-quality assets (Dobele and et al. 2014). BHP has dedicated its capital to projects of examination and growth in countries having political instability risks such as changing regulations of Democratic Republic of Congo, Mongolia, Western Africa, and Kazakhstan. BHP is vulnerable to inflation economic factors; energy costs, examination expenses, costs of labour, operational costs, costing of materials. These increments may adversely affect the development plans, expansion projects and profitability of the company (Hudson and Sadler, 2017). The industry is dependent on the existing strength in international commodities pricing which is related to the global economic health. BHP is liable to sociocultural factors regarding all its operations and relationship with stakeholders. These factors compel the industry to support financially support local societies and offer them resources for the development of infrastructure which includes housing, schools, and roads (Lazzarini, 2015). New Projects of mining and growth mostly requires approvals by society as without this it can impact productivity and profitability. BHP is totally dependent on technological factors effective mining, discovery and survey of natural resources. The company is relying greatly on technological use for discovery. The technology investment is considered as a crucial expenditure for the company. This mentioned technical factor impacts two major key aspects of BHP Billiton which is project pipeline and world class assets. Being a company of natural resources, BHP Billiton is responsible for rules and policies of the public about the environment interest inclusive of Kyoto Protocol in 1997, Clean Development and Climate of the Asia-Pacific Partnership, clean production, renewable yet recycled energy resources, trading system of the European Union Emissions (Sheth and Sinha, 2015). The company tend to drive practices of sustainable development and zero harm to the environment. BHP Billiton is accountable for the existing conditions of environment, past mining and tool operations. The responsibility of environment is directly linked to the key drivers of the operating license. Legal factors are considered to be the significant factors of risks for the company BHP Billiton. The company has suffered from authorized liabilities regarding the cause of damage to the environment from the Southwest Copper operations at Arizona, which consequently affected the financial performance of the company. BHP failed in a significant Federal Court Decision in Australia concerning access for two Western Australia iron ore mines regarding rail infrastructure. BHP Billiton is said to be the number one mining company around the world, enjoying a great competitive edge through its well-diversified portfolio of mining operations worldwide. All thanks to its large scale and size, solid balance sheet and available resources, BHP Billiton is totally capable of ensuring the stability and instability of commodity markets. Another major factor to be considered is the diversification of commodities and characteristics of the company as it assists in reducing risks and provides stability in cash flow (BHP, 2015). The long useful life of the company, reduce costs, flexible assets and also the companys hand in the growth of Asian markets (BHP, 2017). These elements come together in order to offer sustainable competitive benefit to BHP over many of their industry peers, which assists the company in continuing value creation for shareholders in the long run. Trends in Australian Steel manufacturing industry These products are utilized in diverse activities across the globe, especially in the sectors of production and construction. Aiming to the GFC, steel and aluminium demand and needs have reached peak level. Consumption of Steel growth has been unstable while consumption of aluminium growth increased since 2014. International consumption of steel and aluminium is nearly related to the activities of the economy (Hudson and Sadler, 2017). The International economy is becoming ever more competitive while the markets of steel markets have become unstable. Global steel consumption and construction turned down during 2015. Consumption of the commodities declined from 1.7% to 1.6 billion of tones whereas the productivity fell by 1.9%, primarily because of China, US and Japans low output. The 2016 outlook is serious, with the potential to increase the consumption by 0.9% internationally, production to stay at existing levels (Dobele and et al. 2014). The prediction done for Australia is relatively sobering, likely to decrease the production of steel by 6.2% because of international competition. Australia is highly rated as the freest economy across the globe: A judgment the IBC welcomes. While dramatically lowers the barrier to entry for markets that means the global compels has a major influence on competitiveness domestic steel industries. Instability in oil price has noticeably increased the output of steel (especially in China) and has reduced the price of the hot rolled coil in 2010 from $US300 to $US00 in 2015. Respectively, these factors considerably gnarled profit margins Price dumping: This is engaged product exporting at a price under its cost production, or a price in the manufactured location, for the purpose of rapid reduction of prices in competitive markets and rapid increment in market shares. Evidence from foreign steel companies inclusive of South Korea and China competitors are involved in prohibited price dumping. The latest information on anti-dumping legislation done by Federal Government is a solution for this issue. Market distorting policies: policies of Market distorting introduced by the government in the completive countries also creates a negative effect on the private steel industry. China is said to be the largest supplier of steel commodities worldwide and is a net exporter of steel from 2005, its operational and production capability has peaked recently (Lazzarini, 2015). Policies have promoted the China producers in order to raise the market share. These are inclusive of viable treatment of tax, liberal subsidies also proper development and research to maintain high-quality skills and techniques of manufacturing onto land The high dollar cost of Australia has increased the input and production costs, containing the key driver commodities like coal and iron ore. Recommendations: Supporting the government of States and Territories to make use of agreements of Industry Participation. Improvements in the local content acquisition by better involvement, analysing and promoting the technologies, tools, skills, employment and the results of public infrastructural projects. There is a requirement of suppliers of government to match the steel quality levels and standards. Encouraging economic diversification through better formulation of entrepreneurship, improving small scale business research and devoting more to infrastructure Current business strategy of BHP Billiton BHP major aim is to maintain a longer term shareholder value by detecting, attaining developing and advertising mining and natural resources. So as to attain the business model of BHPB business model, this model aim on having and operating large, long term, flexible, and lower costs assets which can be expanded by products, characteristics and market (BHP, 2015). BHPB is well divided into four pillars of operational business which are Iron Ore Coal, Petroleum and Copper encouraged by extensive and centralised business (Functions of Group) as well as divisions of advertising (Marketing). Every business has its personal managerial team, and the chief executive officer is the head managing the Group Management Committee, the major management committee is the BHPBs. The business model of BHPBs and its concerns on decision making allows to make long-term, viable decisions concerning such assets either by discovery or a new acquisition, at the same time it maximizes value from operating its existing assets. An instance of BHPBs pledge to just make the operation of Tier 1 assets was given emphasises on 25 May 2015, when it adopted the amalgamation of its small and non-core assets in a new public enterprise named South. During the merge of both entities BHP and Billiton, 2001, assets in the portfolio of the company increased immensely diverse rates concerning the international conditions of the market and consequent investigation (BHP, 2017). Consequently, BHPB contained assets at both ends of the scale spectrum. As the smaller and noncore assets were unable to encourage their corporate share and operating costs, and thus a conclusion was made that would be valued in a fair manner by the market under a separate entity. Conclusion In accordance with the present study, the conclusion can be drawn that BHPB is performing well financially and having strengthened market position. The study shows that company has significant competitive advantages in the market but they are required to work on their internal working practices such as the development of human resources and communication methods for further improvement. The company is also recommended to update business strategies as per industry trends. References BHP, 2015. Sustaining Australias competitive advantage. [Online]. Available through https://www.bhp.com/media-and-insights/reports-and-presentations/2015/06/sustaining-australias-competitive-advantage. [Accessed on 8th September 2017]. BHP, 2017. [Online]. Available through https://www.bhp.com/ . [Accessed on 8th September 2017]. BHP, 2017. BHP Billiton | Structure and strategy. [Online]. Available through https://www.bhp.com/our-approach/our-company/strategy. [Accessed on 8th September 2017]. 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