Assessment 2: Managing Across Borders
This report is prepared to discuss the prosperity and cultural norms of BHP Group Limited. The reason for choosing this company is that the company has succeeded in the international market. In addition to this, the PESTLE analysis on India as well as China has been done.A SWOT analysis of such company will be provided in this report.
BHPis one of the trading entities of BHP Group Limitedwas formerly also known as the BHPBilliton. This is an Anglo- Australian mining, petroleum as well as metals listed company which is headquarteredinMelbourne, Australia. This company was also ranked as the largest mining company in the worldas per the market capitalization.
Global Strategies Used by BHP Group Limited
BHP Group Limited has expanded its business globally and it has proved to be successful in applying and implementing the global strategies to a great extent (de Villiers, et. al., 2014). BHP is operating its business in both the companies India as well as China. The BHP Billiton is committed to contributing towards the sustainable development of the economy and society of China as well as India. It has succeeded in doing its business worldwide and now has become the global leader in the mining as well as the resources companies in the 25 countries worldwide.The global strategies that have been used by the company BHP are to make a market research of the countries before takingentry into such market. It is necessary to analyze the external market of such country where the company is going to enter. The equity mode entry strategy has been used by the company BHPin order to make entry into the market of China and India.
The prosperity and cultural norms of the company are based on the organizational values, such as integrity, respect, sustainability, simplicity, and accountability. In addition to this, the company ensures the safety of the people and environment. They keep their stakeholders informed about the major decisions the management make. This has been seen that company works for the sense of accomplishment in the local communities, consumers, suppliers, and signifies the relationships with them. The company aims at sustainable development, operational discipline, and financial stability in order to enable itself for future growth and development. In addition to this, the company operates with integrity and conduct business transparently. Regardless of the race, culture, country, and other demographic factors, the company has formulated Code of Business Conduct that controls the operations and human resources. The company has a learning culture that aims at continuous development of people belonging to different culture. Apart from this, here the external market analysis of such countries in order to identify the potential opportunities in such markets is done.
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PESTLE Analysis of India
Political- India is considered as the largestdemocracy within the world and there is relatively a very stable political environment in India. It has been identified that foreign direct investment is being affected in India due to corruption. The mining sector of India is also being affected due to some tough decisions taken by the Indian Government.
Economic-The Indian Economy is the seventh largest economy of the world by the nominal gross domestic product. It is expected that soon the GDP will grow more in the next subsequent years. As per the research, it has been identified that the corporate tax rate in India is 30 percent which worth nothing that has been witnessed by the country during frequent changes in tax rates over the years. It is one of the top companies which produce agricultural products. The import list of India includes crude petroleum as well as pearl and precious stones and metals.
Social- There is a very gigantic market of the customers in India as India is considered as one of the most populous countries. It creates a great opportunity for foreign investors and companies in order to operate their business in India. The labor forces provided by India are also available on cheaper rates which haveencouraged several numbers of global companies to operate their business in India. It is a multilingual, multi-ethnic as well as multi-religious country in India.
Technological- India is 3rd most advanced technological country of the world and all the tech giants are considering India as a very good option in order to make an investment and operate the businesses. There is the availability of a highly skilled workforce related to IT in India. There are opportunities to use the workforce and technologies of India for the mining sector too to effectively manage the operations.
Environment- Instead of continuous growth of India, there are several numbers of challenges faced by the country India such as water pollution, floods, resource depletion as well as floods. These environmental challenges are threats to a business.
Legal- As per the business scope as well as the requirements, the foreign investors, as well as the companies, can set up their stores in India. There are several numbers of labor laws as well as the corporate laws associated with the businesses in India.
The PESTLE analysis of China
Political- China is considered one of the most powerful countries in the world and the 4thlargest country as per the land area. There is a lack of political freedom in China which is an area of concern. China is the dominant overseas investor and FDI of China has reached many countries over the past years. It is the third FDI destination of the world (Geng, et. al., 2015).
Economic- China is the second largest economy as per the GDP as well as on the basis of purchasing power, it is the largest economy. There is also the cheap availability of labor in China which is one of the main reasons why theforeign companies are looking to invest and operate their business in China. The corporate tax rates are also lower which 25% is.
Social- China is the most populous country of the world and the people living in China long for the status symbols such as the latest technology uses, smart phones, designer clothes as well as the luxury cars as to demonstrate their success (Andersson, et. al., 2018).
Technological- There isseveral numbers of biggest tech giants in China and it has also set the vision to be the leading country in the field of science as well as technology. The country is leading towards the innovation-driven country rather than the labor-intensive economy.
Environmental- The environment of China is severelyimpacted by the rapid development of the economy. There is a lot of industrial wastage, climate change as well as deforestation stated in China.
LegalFactors- There are several numbers of laws followed by businesses in China such as the employee remuneration, labor standards as well as the labor disputes. The different industries are categorized in different categories such as encouraged, restricted and prohibited.
SWOT Analysis of BHP
- BHP is one of the most recognized natural resources organizations and has a very much diversified portfolio of assets (Eberle and Weinhardt, 2016).
- It has delivered great financial returns in the past decades and the share prices are also at risk.
- The dedicated and attractive customer services are being provided by the company.
- There is a requirement for improving the long term financial return on equity.
- The human resource management is quite a week in BHP organization.
- The corporate communications of the business are also weak.
- There are already several projects in the pipeline in order to execute.
- There can be made efforts to further strengthenthe brand position of the business.
- The company can make and conduct the programs for greenhouse gas emissions.
- There is a continuously cost rise from the suppliers of the company.
- There are several political and legal threats faced by the companyfrom the local government.
- de Villiers, C., Low, M. and Samkin, G., 2014. The institutionalization of mining company sustainability disclosures. Journal of Cleaner Production, 84, pp.51-58. Available at: https://www.sciencedirect.com/science/article/pii/S095965261400119X
- Geng, R., Bose, I., and Chen, X., 2015. Prediction of financial distress: An empirical study of listed Chinese companies using data mining. European Journal of Operational Research, 241(1), pp.236-247.Available at: https://www.sciencedirect.com/science/article/abs/pii/S0377221714006511
- Andersson, P., Zeuthen, J.W. and Kalvig, P., 2018. Chinese Mining in Greenland: Arctic Access or Access to Minerals?. China & the Arctic, p.102. Available at: https://arcticyearbook.com/images/yearbook/2018/China-and-the-Arctic/AY2018-Special-Section-Complete.pdf#page=102
- Eberle, J. and Weinhardt, M., 2016. Record linkage of the linked employer-employee survey of the socio-economic panel study (SOEP-LEE) and the establishment history panel (BHP).Available: