BHP’s Strategy Breakthrough after South32 Spin-off

Topic

BHP’s Strategy Breakthrough after South32 Spin-off

Instructions

Choose a company that is listed on the London FTSE or New York stock exchange, and that has implemented a strategic initiative successfully or unsuccessfully.
Critically evaluate the strategic initiative and its outcome using strategic management concepts and tools drawn from the first six weeks of the module, in order to explain its success or failure.

Answer preview

Every company will naturally experience peaks and troughs, moments when the business is good and times when rivalry heats up or market trends and global events become unfavourable. A company’s survival during tough times needs a solid corporate strategy. In this case, under challenging circumstances, part of the corporate planning will involve retrenchment or turnaround. BHP had not been performing well in the Australian market before 2015 when it decided to undertake a demerger with South32 and withdraw from dealing with aluminum and manganese. As a corporate strategy, shifting from a diversified conglomerate approach would have greater benefits for the company.

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