This is the new work from TTs070817_569353_7 re edit the report from the attached feedback and remove the network approach theory replace by value chain. Thanks!

Running head: STRATEGIC MANAGEMENT 1
STRATEGIC MANAGEMENT: THE CONTEXT OF BHP BILLITON
Student‟s Name:
Institution‟s Name:
Course Title:
Date of Submission:
STRATEGIC MANAGEMENT 2
Table of Content
1. Introduction 3
2. Company Background 3-4
3. BHP Billiton‟s Strategic Management 4-6
4. Synopsis of Five Forces of BHP 6-8
5. Conclusion 8-9
6. References 10
STRATEGIC MANAGEMENT 3
Introduction
In the era of globalization and economic liberalization, strategic management has
received attention of the business world with paramount importance. Mere management of
resources is not the objective; rather, managing a business‟s internal and external resources
strategically and appropriately is the key aim of today‟s management policies in almost every
industry. A firm that is capable of utilizing the principles of strategic management properly is
the one that is going to lead the respective industry. It is in this context that the report would
be discussing the implementation of strategic management by one of the key players in the oil
and gas industry, BHP Billiton. Since its incorporation, the company has not only been able
to sustain its success run but has also succeeded in keeping on its market reputation. It is
through the proper utilization of the resources through an appropriate application of strategic
management that BHP has accomplished its goals over the years, and in the middle of crises,
the company has been able to sustain its own existence. The primary purpose of the report
would be to describe the Company‟s background along with analyzing its strategic
management approaches that are primarily based on four important theories of strategic
management, viz. Porter‟s Five Forces model, McKinsey‟s 7-S model, resource-based theory
of strategic management, and network approach towards managing an organization
strategically.
Company Background
Incorporated on August 13, 1965, BHP Billiton has gradually evolved in to a global
leader in the sphere of the global resources industry. It operates within the framework of a
Dual Listed Company (DLC), and at present, it has two parent companies, viz. BHP Billiton
Limited and BHP Billiton Plc. Both the entities act as a single economic entity and it is run
STRATEGIC MANAGEMENT 4
by a unified Board of management (BHP Billiton Strategic Report, 2014). BHP deals with
multitude of commodities which include metallurgical coal, iron, copper, and uranium
(Reuters, 2017). But it is petroleum, copper, coal, and iron ore which should be considered as
the primary segments of the company acting as the backbone of the revenue earning process
practiced by BHP. To elaborate on the operations of the company it must be noted that, “The
Company extracts and processes minerals, oil and gas from its production operations located
primarily in Australia and the Americas. It manages product distribution through its global
logistics chain, including freight and pipeline transportation. The Company sells its products
through direct supply agreements with its customers and on global commodity exchanges. Its
businesses include Minerals Australia, Minerals Americas, Petroleum and Marketing”
(Reuter, 2017). The company manages product distribution through its global logistics chain,
including freight and pipeline transport” (Reuters, 2017). The company has a market capital
of $109,308.00 million and its shares outstanding is $2662.49 million (Reuters, 2017).
BHP Billiton’s Strategic Management
BHP‟s strategic management approach should be analyzed from Porter‟s industry
profitability perspective. Porter‟s five forces model, if applied to the process of analysis of
the competency of BHP Billiton, would surely reveal that while operating within the
resources industry, BHP already has gained certain advantages. If judged from the
perspective of threat of new entrants, it can be observed that, BHP operates in a high profit,
highly attractive industry where the threat of new entrants is quite low (Jurevicius, 2013). The
global resources industry, within which BHP operates, is characterized by high barriers to
new entrants, weak suppliers‟ bargaining power, weak buyers‟ bargaining power, lack of
availability of substitute products, and comparatively low competition (Jurevicius, 2013).
And all such factors have helped BHP to sustain its market dominance. Moreover, as a huge
amount of capital is needed to enter the global resources industry, it is quite a safe zone for
STRATEGIC MANAGEMENT 5
BHP in terms of guarding against new entrants. BHP also gains a...