Contemporary Strategic Management

Question: Discuss about the Contemporary Strategic Management. Answer: Introduction: Content of this report has been objectified on the internal environmental factors of BHP Billiton. The purpose of this report is more than different accomplishment dimension of strength, weakness, opportunity and threat as this report has aligned both the findings of external and internal analysis of the company's environment. This report has mainly given focus on the exploration of the competencies that can help BHP Billiton to hold a strong position in the competitive market as well as the areas of improvement. Furthermore, the report has discussed the future potentialities of the company along with the disclaimer of the fact that weak points of this company can cause a serious threat in the upcoming business scenario. The inclusion of the recommendation, based on the current business context of the company, has shaped this report to obtain a perfect concept on the strategic management and its importance for the successful business plan. Internal Environmental Analysis: An organization must be aware of its strengths and weaknesses so that it can follow up its business strategies accordingly with the requirements (David David, 2016); thus, the research on the internal environmental factors of BHP Billiton is valid for this report. Swot analysis of an organization is followed to accomplish an internal analysis, where it focuses on the strength, weakness, opportunity and threat, these four elements. Strength is the competencies of an organization that make the organization competitively viable (Hill, Jones Schilling, 2014); whereas, weaknesses of an organization makes that company aware of the deficiencies that should be replenished. Opportunity gives an idea of how the organization extends its market embracing the potential resources and other skills. The dimension of threat in SWOT analysis gives the organization an account of the looming threats. Findings of SWOT analysis on the BHP Billiton are as follows: Stable market position: BHP Billiton is a renowned organization in the mining and metal industry. The company operates more than 100 ventures around 25 countries. Business strategies and efficient organizational structure have helped this organization to operate productive resources in different countries across the globe. Worldwide recognition of this group along with functional and practical leadership style has helped this organization to fetch advantage in the competitive market scenario. Diversified revenue sources: BHP Billiton yields its revenue from different lines of business as it operates its business from various sectors; not only the business line, has geographical diversification also helped this organization to return whatever the investors have invested in them. BHP generates its revenues through nine different business segments. In this context, Hitt, Ireland and Hoskisson, R. E. (2012), mentioned if an organization can have the competitive advantage if it deals with different market segmentation because the company can insulate the entire group against any adverse market condition. Centralized Activities: BHP Billiton has strategized its marketing by focusing on client satisfaction. To fulfill the demand of the market as well as clients they have segregated their marketing operations among three centralized offices located in Singapore, Hauge, and Antwerp. These three offices are responsible for production to the delivery to the customers. As suggested by, Barney and Hesterl (2015), if an organization controls its business by centralized marketing, efficiency and expertise get enhanced because every office manages end to end marketing operations with the help of synchronization with other offices. Moreover, successful logistics and the fine structured trading system offer higher quality of products and standard service. Weakness: Safety issues: Certain matters have questioned the reputation and employee concern of the BHP Billiton. For instance, its operation in Western Australia has survived some fatal incidents concerning to the health and safety issues. The policies regarding the over duty, Mining safety, traffic management, contractor management must be revised to hold its leading position in the market (Grant et al. 2014). Lack of corporate communication: Organizations are required to adopt new strategies of communication with the changing environment to counter the competition thrown by other companies (Eden Ackermann, 2013). In this matter, BHP Billiton has been left behind as the staffs are not proactive to communicate or respond by using new technologies or platform for effective communication. Opportunities: Expansion of the market: BHP has many projects in the queue that will help the company to make the international ventures more strong. As per several reports, the organization is positively looking to hold agreements with Canada for extension of potash operations, a joint venture with Rio Tinto and Indonesian Coal Project. Therefore, it is clear that the company has to attempt every scope to establish a functional, cost-effective and successful business across the globe. Environmental lookout: BHP Billiton has agreed to reduce the emission of greenhouse gas emission. This approach can give the company recognition for maintaining the environmental responsibility. As mentioned by, Mullins et al. ( 2012), environment has become a new concern for the organization and showing responsibility to the sustainable development gives the additional advantage. Threats: Reducing demand and increasing cost: Increasing the cost of the suppliers, labors along with shipping charges is posing a serious threat to the BHP Billiton. Inflation and employee issues are major concern behind the restricted development and growth of the company. Also, the slowdown in the Chinese economy has greatly affected the demand for natural resources that has, in turn, constricted the business and profit margin of BHP as it depends heavily on this country. Increasing competition: The number of competitors grows with passing years; Newmont Mining, ThyssenKrupp are among others that are giving BHP major competition in the mining industry (Lodhia Martin, 2014). Such competition affects the market share of an organization by lowering the profit margin of that company (Ball et al. 2012). Apart from that, political disturbances and economic fluctuations also possess the threat to the sustainable development. Analysis on the Findings: Some both positive and negative sides have been obtained from the internal and external research on BHP Billiton. From the external analysis it has been obtained that this company has many overseas ventures; thus, it is prone to face different economic, political and legal provisions concerned to the different countries. On addition, BHP faces less bargaining power from the buyers; whereas, bargaining power of the suppliers is very high. Moreover, strong competition is present among the competitors. From the internal analysis, it has been evaluated that stable position across the world and positive response to the investors are the strength for BHP. New entrants can be a threat for the company; however, there is huge opportunity to expand the market by tying up with other international giant ventures (Hubbard, Rice Galvin, 2014). Apart from that, safety issues of the employees and environmental concern have weakened the reputation of BHP. Recommendation: Recommendations for BHP are as following: BHP must ensure that appropriate measures have been taken in concern to the employees heath provision. BHP should not negotiate with the environmental concerns. It should focus on the upgradation of its system accordingly with the technological modification. BHP should follow sustainable management to obtain competitive advantages over increasing threat of rivalries. Conclusion: Hence, it can be said that this report has successfully fulfilled all the requirements to establish a clear concept of the strategic development for BHP Billiton. Prior to incorporation of all the information, both internal and external analysis has been conducted. This report has focused mainly on the internal analysis and to complete the internal research SWOT analysis has been done. This study has helped to acknowledge the strength of BHP as well as the negative points. Potential opportunities have also been discussed along with the threats that could restrict the growth of the organization. Analysis of the findings obtained from both the internal and external analysis has made this report academically viable; whereas, a recommendation can be beneficial for the organization to hold sustainable development. Reference list: Ball, D., Geringer, M., Minor, M., McNett, J. (2012).International business. McGraw-Hill Higher Education. Barney, J. B., Hesterly, W. (2015).Strategic management and competitive advantage concepts and cases. Pearson. David, F., David, F. R. (2016). Strategic Management: A Competitive Advantage Approach, Concepts and Cases. 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