PEST analysis of BHP Billiton (Coursework Sample)

COMPANIES ANALISYS
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PEST analysis of BHP Billiton
Political factors
The company is a global resource company that has invested even in countries with high risks of political instability CITATION Abb13 \l 1033 (Mirza & Nandakumar, 2013). The crisis arises due to various issues which are not limited to civil unrest, changes in government policies, terrorism and breaching or nullification of contracts. For example, Chile increased its tax on mining which led to doubt of achieving anticipated income. In addition, the implementation of the Mineral and Petroleum Resources Development Act of 2002 made a significant effect that made the company to make a huge loss since it was forced to give 26% of its ownership rights to people in South Africa who were underprivileged CITATION Car07 \l 1033 (Correia & al, 2007).
Economic Factors
The company is susceptible to these factors because they do fluctuate from time to time. They include increased costs of energy, costs of skilled and unskilled labour, expenses incurred during discovery time, operations and materials. The currency predictability and economic perils in industrial economy worldwide are also major contributors to the progression or retrogression of the BHP Billiton (Permatasari, 2012).
Socio-Cultural Factors
The company has roots in 1st, 2nd and 3rd world countries and due to cultural diversity, it faces a challenge in that it has to support the community financialy and provide resources and social amenities. This leads to low profit margin since more is channeled to development costs for example in Antofagasta-Chile the workers quality of life (Hargreaves, 2012).
Technology Factors
New technology inventions are being discovered in terms of assets and project performance. It embraces new technology in order to cope with the current market demand. This makes it to prioritize on investing on technology for efficient, safe and fast working.
Environment
BHP Billiton as a natural assets organization is defenseless to regulation and opens strategies in regards to nature including the 1997 Kyoto Convention, the European Union Outflows Exchanging Framework, the Asia-Pacific Organization on Clean Improvement and Atmosphere, clean emanations, reusing and renewable vitality CITATION Dan11 \l 1033 (Samson & Daft, 2011). Ecological groups and NGOs utilize nonstop pressure on the organization. BHP Billiton tries to take after a practice of 'zero harm' and sustainable development. BHP Billiton has focused on decreasing greenhouse gas outflows in operations by 5% in recent years.
BHP Billiton is in charge of natural conditions at present and previous mining and drilling operations. Environmental obligation is connected to the key vital driver of permit to operate and the company has ensured it has followed the required rules and regulation protecting the environment. Amid 2006, the organization designated over $2.8b for recovery and decommissioning expenses and this figure was evaluated to increment of another 25% CITATION Cé10 \l 1033 (Louche, Idowu, & Filho, 2010).
Legal
Legal elements are a paramount component for BHP Billiton risks. The organization has confronted legal liabilities in the decisions for bringing on ecological harm at the Southwest Copper operations in Arizona which affects economic performance. BHP lost an imperative Government Court verdict in Australia concerning the access of rail for two Western Australia iron metal mines. This claim was initially acquired the Australian Aggressive Tribunal by Fortescue Metals Bunch, which is a littler iron metal contender to BHP in the Pilbara District. BHP Billiton expressed that the decision will have an effect on the generation of iron metal and delay future venture choices. The Western Australia Pilbara District is one of the most noteworthy zones of development for BHP and it gives send out pay of $5.5b AUD and employments in excess of 7,000 people.
SWOT analysis of BHP Billiton Company
Strengths
* It is among the companies that are in the first-class dealing with natural assets. It the second biggest company selling Uranium, Silver and lead
* It is the biggest copper, metallurgical coal, manganese and iron ore sources in the whole world.
* It has restored capital to its investors through a plan known as ‘share buy-back plan’. It has also, in the past 5yrs it has made high profit (BHP Billiton, 2005).
* It is strategically positioned to operate in almost all continents hence derivers its products globally except Greenland.
Weaknesses of BHP Billiton Company
* It has several human resource problems in that they have to appoint new CEO, employ and training new and additional mining workforce.
* The company lacks vigorous corporate communications.
* The motto, vision, mission and strategy has to be redefined for personal motivation and also improve efficiency.
* BHP has not effectively secured their position on access to open framework and they have a little gathering of fitting open backing in advertising and political campaigning.
Opportunities
A pipeline project worth $17.8 billion was started in 2013 and is in progress. This project was proposed to generate revenue if the measures on cost effective and market are strong (BHP Billiton, 2011). BHP Billiton has devoted itself to diminish their greenhouse gas releases by 5%. Appropriate management of this system can bring about a positive hotspot for sustainable advancement and ecological obligation. There is an opportunity for the company in transportation operations since it owns company owns trading division and energy transportation. Oil and common gas are right now valuable items and the BHP portfolio is situated in the most part of Australia and USA (Benain, 20). These places are secure, self-ruled locales.
Threats
The shipping costs, labor costs and energy costs keeps on increasing day in day out. Human resources and inflation are other things that keep on challenging the stability of the company and its ability to expand (Wheatley M. (2012).
It faces some political opposition because it has to adhere to enhancement of environmental demand, sustainace of environment and good relation with stakeholders.
The organization must strive to fulfill the interest yet stay fiscally centered to perform expanding benefit volumes together with an ascent in characteristic items shipments.
COCA-COLA PLC SWOT Analysis
Strengths
Coca Cola Company is among the best brand in the world. It has a value of $ 77,839 billion
It offers beverages in the whole worlds and it has the biggest market shares in terms of drinks supply. It does a lot of marketing and advertisement of the product and thus making it to be known by very many people and by 2012 the brand recognition increased and hence the sales rise. It has created a good customer loyalty and has enhanced business social responsibility.
Weakness
The Coca Cola portfolio is not diversified since it focuses on sales of beverages only.
It creates some negative publicity due to the high water usage and use of chemical that are harmful in producing its drinks. It deals majorly on the carbonated drinks
Many other beverages drinks offer a stiff competition to this product.
Opportunities
* There is an opportunity of increasing its product through production of bottled water whose has demand has increased globally.
* Expanding interests for healthy nourishment and refreshment to avoid or prevent some health issues. This is by providing drinks that maintains the body in healthy status such as drinks with low calories and sugar.
* Growing drinks utilization in developing markets (particularly BRIC)
* Enhancing development through acquisitions
Threats
* Consumers may change their interests and preferences
* Water can be scarce in some places and since the company requires a lot of water this can poise to be problem.
* The strength of dollar can also affect the Coca Cola market negatively.
* Fear over reduction of net and gross profit this is because of increased raw material costs and water.
* There is a stiff competition for market share with PepsiCo especially in India.
* Decrease in market for the carbonated drinks worldwide is also a major threat for Coca Cola Company.
Pestle Analysis for Coca Cola
Political Analysis
The business environment for non-alcoholic is changing and more competitive product as well as pricing pressures in maintaining their sales worldwide. Government changes, civil unrest and difficulties in capital transfer across borders are amont the political conditions that do affect the market of the coca cola products.
It has capability to break into emerging and developing markets, which likewise relies on upon monetary and political conditions, and how well they find themselves able to secure or structure key business collusions with nearby bottlers and make important foundation upgrades to generation offices, circulation systems, sales equipment, innovation and technology CITATION Pau13 \l 1033 (Baines, et al., 2013).
Economic Analysis for Coca-Cola
Economic change, for example a recession creating increased activity at the lower ends of product price ranges. Rate of interest rises depressing business and causing redundancies and lower spending levels.
The non-alcoholic beverage industry has high sales in countries outside the U.S. According to the Standard and Poor's Industry surveys, "For major soft drink companies, there has been economic improvement in many major international markets, such as Japan, Brazil, and Germany" CITATION Jul13 \l 1033 (Anders, 2013). These markets will continue to play a major role in the success and stable growth for a majority of the non-alcoholic beverage industry.
Social Analysis for Coca-Cola