About BHP PESTLE Analysis Porter's 5 forces ERRC Grid GAP Analysis TOWS Matrix Balance Score Card

1. BHP Billiton – Australia
Group-5
Mamta Deshmukh
Thiyagarajan Natarajan
Zahoor Bhat

2. BHP Billiton – Who we are
Broken Hill Proprietary Company Limited, founded 1860. Nick name “The
Big Australian”
 2001, merged with Billiton Plc to form BHP Billiton
 An Anglo-Australian multinational mining, metals and petroleum company
headquartered in Melbourne, Australia
 100 mining sites across 25 countries.
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3. Market Share & Current Situation
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4. Business Model & Current Challenges
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5. Strategic Objectives – Sustainability & More
Profit
Intensive Strategies
•Market Development
•Market Penetration
Generic Strategies
• Cost Leadership
Defensive Strategies
•Retrenchment
•Divestment
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6. PESTLE Analysis : Australia
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Political:
• Stable political environment
• Best market for MNCs in APAC region
Economic:
• Leading and rich supplier of minerals
• High demand of minerals across globe particularly in China & Japan
• Attractive ROI for mineral deposits globally, which affects Australian mining industries
• High overall costs and commodity prices are impacts productivity
Social:
• Sophisticated negotiations between local communities and mining companies
• Shortages in affordable housing
• Increased local costs of living
• Skilled, well-educated and multi-lingual workforce
Technological:
• Improvements in mining techniques have reduced mining costs
•The mining industry in Australia is underpinned by world-competitive mining technology and invests significantly in R&D
Legal:
• Very favorable Risk/Reward Rating
• Best mining legislation in the world
• Different mining policies across states (Favorable in Western and South Australia and Unfavorable in New South Wales)
Environmental:
• Environmental impacts of mining are associated with increased mine waste, increased potential for pollution, increased mine
size, as well as increasing water and energy consumption

7. Porter’s 5 forces
 Bargaining Power of Suppliers: Strong
• BHP Billiton is largely impacted by the bargaining power of
suppliers in labour, materials, shipping, and energy costs. As the
company ensures reduced capacity through enhanced operations,
the overall costs from suppliers have increased as well.
 Bargaining Power of Buyers: Low
• There are not many substitutes available in large quantities,
which reduce the bargaining power of buyers.
 Threat of New Entrants: Low
• Due to dearth of natural resources there is very limited capacity
and supply available in the global market.
• Although new entrants like CITIC Pacific Mining is trying to grow
and capture the market share in mining.
 Threat of Substitutes: Low
• BHP Billiton is strongly placed, due to its broad, diversified
portfolio of natural resource assets, to counter any threats of
substitutes.
Global Immersion Project – Group5 Slide 7
Competitive
Rivalry
Threat of New
Entrants
Buyer Power
Threat of
Substitutions
Supplier power
Intensity of Existing Rivalry: Strong
• The rivalry among competing sellers is tough. This is due
to the fact that several natural resources companies are
competing for access to the reserves available across the
world; along with retaining qualified staff; and building
infrastructure, transportation and new development
projects.
• BHP Billiton purchased WMC Resources of Australia
during a takeover battle. The company as a result has the
largest uranium reserves in the world and secured a
major source of future growth.

8. ERRC Grid
Global Immersion Project – Group5 Slide 8
Eliminate
• Non-performing assets
(like low performing
mining sites/ other
assets.)
Raise
• Automation
• Productivity in
Uranium and
Petroleum products
Reduce
• Resource cost like
labours
• Water usage
• Land disruption
• Acid rock drainage
Create
• Outsource labours (like
hire contract employees)
• Usage of solar power and
wind turbine as energy
source

9. Competitive Landscape / As-Is Canvas
Global Immersion Project – Group5 Slide 9
0.00
1.00
2.00
3.00
4.00
5.00
6.00
Iron-ore
Quality
Operation cost Distribution
N/W
Location Operation infra Safety Exploration Finance Market Share Product
Differentiation
AS - IS Curve
BHP Industry

10. Gap Analysis
Global Immersion Project – Group5 Slide 10
What company is doing
• Low production of Copper due to
increased cost
• Currently involved in more internal
projects
• Overestimation of market demand
• Low share price
• Paying less dividends to
shareholders
• Highly dependent on China market
What company needs to do
• Increase production of Copper with
controlled OPEX
• Minimize internal projects and also
outsource few
• Use advanced business analytical
systems to predict accurate market
demand
• Raise capital to increase share price
• Need to increase the %age of dividend
pay outs
• Need to concentrate more on Europe
and US market as Trump government is
ambitious to build more infrastructure
which could surge demand for
commodities

11. TOWS Matrix
Global Immersion Project – Group5 Slide 11
• Threat
(External Factore)
• Opportunity
(External Factor)
• Weakness
(Internal Factor)
• Strength
(Internal Factor)
- Diversified Portfolio
- Largest supplier of
minerials
- Strong "A" credit rating
- Dedicated customer services
- Low long-term financial returns
on equity
- Not enough trained mining
resources
- Human resource issues
- Weak corporate
communications
- Continuesly rising reource
costs
- Political threats due to
unfavourable infrastructure
access
- New entrants trying to capute
market share
- Global economic slowdown
- Several project in pipeline
- Introduce innovative
marketing solutions
- Enhance customer outreach
- Reduction of 5% in
greenhouse gas emissions

12. Recommended Strategy
Global Immersion Project – Group5 Slide 12
Cost Leadership
• Minimizing operating cost
through transport
rehabilitation and enhanced
technology
Market
Development/Peneration
• Sell more commodities to
existing customers and
develop plan to reach non-
exiting customers (like APAC
and US)
Retrenchment
• Cut operating expenses and
discontinuation/less selling
of low demand commodities
• Restructuring
Divestment
• Demerger with low performing
business entities
• Selling out low non
performing business units

13. Balance Score Card & Metrics
Global Immersion Project – Group5 Slide 13
Balanced
Scorecard
Perspective
Strategy Action Plan Sustainability Reporting
Internal Process Market
Development
Focus on increase in efficient production in short run and go for
expansion in the long run in order to meet the world growing
demand for minerals and Petroleum production.
Financial Sustainability
Customer Market
Development
Expand to new markets and increase imports and exports due to the
favorable foreign exchange
Economic Sustainability
Customer Market
Penetration
Increase intensive marketing efforts across the globe to increase
market share worldwide
Economic Sustainability
Finance
Cost
Leadership
Minimize operating costs across all mining site and refinery units. Economic Sustainability
Internal
Retrenchment/
Divestment
Demerger and selling out non-performing business. Financial sustainability
Learning and
Growth Focus
Environmental management, Health and safety Learning and Growth

14. THANK YOU
Global Immersion Project – Group5 Slide 14
Q&A