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SWOT Analysis of BHP Billiton

SWOT Analysis of BHP Billiton

BHP Billiton

 

Executive Summary

This report provides an analysis and evaluation of vision, mission and value statement of BHP Billiton. The result of the analysis is conducted based on theories. It also contains strategic analysis of the company’s current strategies. This report aims to identify whether the strategic objectives of the company align with the mission and vision statement or not. BHP Billiton is the largest mining company in the world. The company’s business operation is to extract minerals through exploration and production. This report emphasis on the company's futuristic goals that it is trying to achieve by identifying its strengths, weakness, opportunities and threats with the help of SWOT analysis. At last, it concludes the entire findings in the conclusion section.

 

 

Contents

Introduction. 4

Vision statement 4

Mission Statement 5

Value statement 6

Strategies. 6

SWOT Analysis of BHP Billiton. 7

Conclusion. 9

References. 10

 

 

Introduction

BHP Billiton is an Anglo-Australian mining company that extracts minerals, metals and petroleum from Earth. It is a dual-listed public company. It was founded in 1855 in the town of mining near the broke hills in South Wales. It is headquartered in Melbourne, Australia. It is the worlds largest company by capitalization and third-largest company in Melbourne to generate high revenues. It is a trad entity of the BHP group. The company was formed in 2001 when it was merged with Anglo-Dutch Billiton and Australian Broken Hill proprietary company. The company has a primary listing on the Australian exchange and London stock exchange. It is a global leader and operates in different parts of the world (Lewis 2016). The company has an open and diverse team of people that strive to operate with integrity. It is a global resource company that has been contributing to industry communities and societies with its extractions. The reports aim at critically analyzing the mission, vision and value statement of the organization to find out the areas where there is a need for improvement. It clearly describes the current strategy of the organization and also examines the current strategic objectives whether they are aligned well with the vision, mission statements or not. The report justifies the analysis by linking it with relevant concepts and principles.

Vision statement

The vision statement of any organization describes what and where the company wants to be in the future (Kirkpatrick 2016). These are the strategic plan done by the company thinking about the future. It helps the company in the strategic, general and decision making processes of the organization. The vision statement of the BHP Billiton is seeking to create a long term value by discovering, developing and conserving of natural resources. The company provides a market-focused solution to its innovative customers. The company is committed to long-term strategy. It invests in low cost and world-class operations at different geographical regions across the world. However, the company had decided that it will be reliable and responsible for its work. It will deliver the products as per the purpose. BHP has a large number of shareholders thus it has made its plan to focus on long term shareholder value. The vision statement of the company is clear and to the point (Ahman 2020). This indicates that the company has not used long dialects to share its opinion in the market. The vision statement generally is brief comprehensive to deliver the exact essence of the business so that all the company's stakeholder can understand the business philosophy of the company (Kirkpatrick 2016). The vision statement of BHPBilliton is concise and holistic. The vision statement of the company must be such that it helps the stakeholders to easily identify the strengths of the company which will help it to achieve its futuristic goals. BHP Billiton vision statement contains its strength in it. The phrase is talking about the future and what it can do to achieve it. On evaluating the BHP vision statement, it was found that the company’s vision matches with the organizational offerings and potential. The vision statements of the BHP are in line with the values and also reflect the work environment of the business and its potentials. 

Mission Statement

BHP mission statement is to create sustainable value for employees, shareholders, contractors, customer, suppliers, business partners and the host communities. It also states that the company aspire to zero harm the people and the community. It strives to achieve leading industry practices. The company understand it is important to govern with safety measures and conduct business and take care of the environmental and economic activities as all f these are integral for doing the business. (Schilling and Shankar 2019). The mission statement identifies the purpose of the organization exists and also describes products offered (Dumitra?cu and Feleag? 2019). It also contains information on the company's operational goals, the processes that the company use to achieve and who all are target groups of the organization and in which region the company operates. While analyzing these points, it was identified that the company does not talk about the products that it is offering. It only speaks about how the company is attaining sustainable value for its different stakeholders. The company’s mission statement indirectly states that it is focusing on addressing the issues of the customer and the environment. It is also clear from the mission statement that the company has identified its target group and is ready to meet their needs and demands. It also reflects that the company will try every possible method to bring people and resource together. The mission statement of BHP highlights its strengths and competencies. It describes the company's tactics and processes required for achieving its goals. BHP mission statement motivates its employees to give their best to achieve the goals. It even develops the need for growth and progress for the betterment of both the company and themselves (Grünig and Kühn 2018). BHP mission statement is precise and to the point. It is easily comprehended by the stakeholders. The company has kept its mission statement short and simple instead of dragging it on a long page with repeated things and non- important aspects. This reflects that it based on what the company is offering in terms of service. The mission statement of the company is in line with its values. It is based on the ethical ground which the company systematically adopt to offer its services to the customers. It is implemented through communication, goal settings and training its employees.

Value statement

The values of the BHP Billiton is based on sustainability, integrity, respect, performance, simplicity and accountability (Fleming et al. 2017). Values of the company are pretty self–explanatory and can be used both internally and externally. The values of the company are very simple and can be easily understood by its stakeholders. It further depicts that the company is trying to create a positive impact on the environment and communities. The company has created some strategic target that they are going to work upon to achieve them. It understands its nature of operations thus it is trying to minimize the impact of its operations on the environment by taking care at every stage of the assets. BHP tries to identify the risk and manage all of them to create a sustainable future. The priorities of the BHP for humans and this indicates that the soul of the company is pure and it does not only want to generate revenue but also want to help and improve the lives of billions on people around the world (Hossain 2017). The values of the company have helped the stakeholders like customers and investors to know what is important for the business and what kind of a culture it has in the organization. The value of BHP guide day to day operations and it also shapes the way the company needs to work to shape the future together. The value emphasizes that the company is constantly seeking to improve the living standards and economies of the world. It thus purchases the products from the local market and does their part in strengthening them. The company is striving hard to reduce waste generated by them (Rhyner et al. 2017). BHP Billiton takes responsibility for their actions and tries to do the things right. At last, it also states that we believe in caring about our team members. We help each of the members to do a great job by caring for all our stakeholders.

Strategies

The strategy of the company quotes to think big. If we will start thinking big we will be able to achieve all that we have imagined (Öneren, Arar and Yurdakul 2017). It also states how the company is thinking to change its operations and move towards sustainable development goals. The company is thus working on three sustainable pillars for it. These pillars deliver the purpose of the company. The company will be directing its business activities such that it overcomes the sustainability challenges that are the company will make sure how it will make the products from the resources in the environment. The nest pillar states that the company will pay all the taxes and royalties to government and concerned authorities through direct and indirect employment. It stated that the company will invest in the social well–being. The company tries to emphasis on the fact that the company's very first and foremost step is to create itself as a company that works for the wellbeing and safety of the people. It is trying to achieve generational sustainability.

The strategic objectives of BHP are strategic, measurable, attainable, reliable and time-framed. All the objectives defined by the organization are specific and clear. It helps managers as well as employees to focus on their goals. When the objectives are measurable then they can be tracked for progress. The strategic objectives of the company are that it puts the health and safety of the people's first and create assets that minimise environmental impact. It also wants to achieve superior business results. The company focus on its efforts and accept its responsibilities and commitments towards the community and environment. These objectives are aligned with the mission and vision statement which states that the company wants to increase its revenue and want to become performance leaders in the eyes of the stakeholders. Both of the statements are aligned with the objective as until and unless the company would not involve themselves in the sustainable development goals (Bjerke and Renger 2017). The objectives of the BHP are aligned with the mission and vision statement of the company. They are also aligned with core values and goals and thus there is no need for improvement in them.

SWOT Analysis of BHP Billiton

The purpose of using SWOT analysis is to identify and understand the strategies of the company that the company can use to exploit external opportunities, protect itself from threats, build BHP Billiton strengths and eradicate all of its weaknesses.

Strengths of BHP Billiton

  • Automation has helped the company to bring consistency in product development. the company now can scale up and scale down based on the market requirement.
  • The company has a customer relationship and development department that helps in achieving a high level of customer satisfaction. It is due to this reason the company has good brand equity in the market (Öneren, Arar and Yurdakul 2017).
  • The company has well trusted reliable suppliers that provide raw material to the company and beak the chain of bottlenecks.
  • The company has a highly-skilled diverse workforce that works for achieving the goals of the company.
  • BHP Billiton is successful in generating revenues and executing new projects.

Weaknesses

  • Days inventory of the company is more in comparison to its customers as a result the company has to raise more result.
  • The company failed to move towards their products to sell in the market(Öneren, Arar and Yurdakul 2017).
  • The business structure of the company is compatible with the current business models and thus it limits the company’s expansion.
  • The net profitability ratio of the company is below the industry standards.

Opportunities

  •  Governments green drive open opportunity for the procurement of the company.
  •  The company has invested in the online platforms therefore now it is getting online customers as well (Öneren, Arar and Yurdakul 2017).
  •  The new technology provides the company with an opportunity to understand the pricing strategy.
  • The new taxation policies will change the way of doing business.

Threats

  •  Increase in the competition with the local distributor is decreasing its revenue percentage.
  •  Currency fluctuations are another disadvantage for the company as it operates in different parts of the world (Öneren, Arar and Yurdakul 2017).
  •  The rise in the raw material is another potential threat of the company.
  • The change in consumer buying behaviour is another threat to physical infrastructure.

 

Strengths

  • Automation in forecasting
  • Good brand equity
  • Trusted supplier
  • High skilled labour
  • Good revenue

 

 

  •  
  • Day inventory
  • Increase in competition
  • The decrease in net profitability
  • Current business model
  •  
  • New technology
  • New taxation
  • Online platform
  • Green drive

 

  •  
  • Increase in competition
  • Currency fluctuations
  • The rise in raw material
  • Change in consumer behaviour

 

 

Conclusion

It can be concluded from the findings that BHP Billiton vision, mission, value statement of are well defined. These are well thought of before communicating it to the stakeholders because these are the ones that define the business and how it is conducted. The company's strategy and objectives prove that it understands its role in the market. It gives tough competition to other mining industry. Its mission, vision, value statement is simple, clear, concise but different from others. All of these states that the company's goal is to have the best capabilities, best assets and best commodities for the long term. The company conduct responsible and ethical business. The company has known that its operations have an impact on the environment thus it tries to maintain environmental resources such as land and water. The objectives state that the company wants to strengthen and build a more resilient society by creating a sustainable future. The analysis conducted on different strategies of the company proves that it is the strategies of the company that helps bring people and resources together build a better community. It is thus the company also take care of the employees by providing them with a good work environment where they can grow and develop themselves according to the changing pace.

References 

Ahman, E. 2020. A content analysis: The vision statements of higher education institutions in Indonesia. Dinasti International Journal of Education Management And Social Science, 1(3), pp.360-367.

Bjerke, M.B. and Renger, R. 2017. Being smart about writing SMART objectives. Evaluation and program planning, 61, pp.125-127.

Dumitra?cu, M. and Feleag?, L. 2019. Mission, Vision, and Values of Organizations, the Catalysts of Corporate Social Responsibility. Audit financiar, 17(153).

Fleming, A., Wise, R.M., Hansen, H. and Sams, L. 2017. The sustainable development goals: A case study. Marine Policy, 86, pp.94-103.

Grünig, R. and Kühn, R. 2018. Stakeholder Analysis and Revising the Mission Statement. In The Strategy Planning Process (pp. 77-83). Berlin: Springer

Hossain, M.A. 2017. Value-added statement: A part of social responsibility reporting. Journal of Finance and Accounting, 5(2), pp.74-79.

Kirkpatrick, S.A. 2016. Build a better vision statement: Extending research with practical advice. US: Rowman & Littlefield.

Lewis, B., 2016. BHP Billiton boss' view on Brexit. Australia's Paydirt, 1(244), p.9.

Muchtar, M. 2017. The influence of motivation and work environment on the performance of employees. Sinergi: Jurnal Ilmiah Ilmu Manajemen, 6(2).

Öneren, M., Arar, T. and Yurdakul, G. 2017. Developing competitive strategies based on SWOT analysis in Porter’s five forces model by DANP. Journal of Business Research-Turk, 9(2), pp.511-528.

Schilling, M. A. and Shankar, R. 2019. Strategic management of technological innovation. USA: McGraw-Hill Education.

Rhyner, C. R., Schwartz, L. J., Wenger, R. B. and Kohrell, M. G. 2017. Waste management and resource recovery. CRC Press.

 

 

 


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