Case Analysis Of Rio Tinto

There are many businesses that have expanded their business internationally in order to benefit in some sort of way rather it revenue or a better market for their product. In this thesis, I will research a multination company and its international strategy over the last 10 years. I will elaborate on it international orientation and rather it etho-, poly-, or geocentric. I than explain why the company decided on expanding to the chosen locations. Then I will clarify if they had core capability to succeed in those markets, along with its

Due to bureaucracy policies and procedures, it sometimes becomes hard to come out with innovative ideas quickly at Rio Tinto. To streamline the bureaucracy, I recommend Rio Tinto to embrace open innovation through collaboration internally and externally. Rio Tinto should assemble a global task force across all the product groups committed to accelerating ideas from concepts to reality. Prioritization of good ideas needs analysis by potential impact, risk and time to market, and should quickly transition open ideation to define the project teams. The open collaboration should embed the four innovation pillars employees reward mechanism, idea generation, idea conversion and idea diffusion.

Due to the growing competition and diminishing market share, companies are opting for different strategies to achieve their survival objectives as well as growth. Companies are thus executing grand strategies to provide their businesses with a clear direction for its strategic actions. These strategies, therefore, aim at both short term and long term sustainability and growth, and they include innovation, market development, product development, and concentration.

The company then decides on a market-entry strategy. This typically entails four avenues of entry into the international market. A). Market entry may be handled through exports, directly or indirectly. Internet sales and direct selling

The report consists of three major parts, which are firstly divided into providing background information of Rio Tinto and its biggest competitors BHP and Vale in the mining industry. A SWOT-analysis takes into consideration the external factors of the market as well as the internal factors which may have an impact on the financial statements of Rio Tinto.

Their vision is to be a company that is admired and respected for delivering superior value, as the industry’s most trusted partner. Their operations give them the opportunity to create mutual benefit with the communities, regions and countries in which they work, and their metals and minerals are transformed into end products that contribute to higher living standards. (RIO TINTO, 2014)

BHP Billion, a merging cooperation of BHP and Billion in 2010 (BHP Billiton, 2011), is a world leading company in mining and resource exploiting. According to ASX data, BHP Billion has the largest business scales in the Australian market, AU$166 billion of market capital and AU$71 billion of annual operating revenue in FY13 (Australian Securities Exchange, 2014). Over 128,800 employees and contractors work in 26 countries worldwide to create value for their shareholders (BHPB Annual Report, 2013). The core business has been classified into five units: petroleum, copper, iron ore, coal and aluminum, making 20%, 18%, 17%, 31% and 14% respectively in the revenue of FY13. It can be seen from Graph 1 that although iron ore was not the segment with the largest assets, it still returned with the largest revenue and highest ROA rate in 2013. The following paragraphs will focus on the strategy analysis on the segment of iron ore and how it can conquer possible threats

Rio Tinto is one of the world’s largest international mining companies. Headquartered in London, the company is a dual listed company as Rio Tinto plc and Rio Tinto Limited but operates as a single economic entity. Rio Tinto’s diverse mining interests focus on delivering shareholder value by owning and operating metals and minerals mines which deliver the world’s most sought out commodities. The company operates in ten countries worldwide and maintains control of whole or partly owned entities throughout the world. Currently, Rio Tinto’s average number of employees totaled 66,331 with approximately one half of all Rio Tinto’s employees conducting mining activities in Australia and New Zealand.

This organization has several options to facilitate their expansion into Western Europe. These include exportation, licensing, or foreign direct investment in the form of a wholly owned subsidiary. Each of these options presents risks and benefits that must be evaluated before an entry-strategy is formulated.

Rio Tinto is a multinational company that deals with mineral and metal mining, refining, processing, and marketing. Founded in 1873, this Australian-British company has grown into one of world’s leading mining and Metals Company, dealing in aluminium, copper, diamonds, coal, and iron ore. Refining of bauxite and iron ore are also part of its operations. The transformed metals and minerals give Rio Tinto access to markets across a diverse economic development spectrum, and exposure in varied sectors, including

To define their global vision AVM Advogados believes all members of the firm need to come together in the construction of one path which defines both their identity and ensures their clients and firm members have one culture regardless of office location (AVM Advogados, 2013).

Companies can decide to go global or to enter international markets for various reasons, and these different objectives at the time of entry that enable the business to produce different strategies and the performance goals, and even forms of market participation.

Understanding a new market’s needs and developing a business model capable of delivering on those needs relies on a solid strategy. A solid strategy is predicated on understanding barriers to playing within the institutional framework. Understanding

As trade increases hyper-competition grows forcing organizations to go global. By a company going global it requires them to rethink strategy and reform (Ananthram and Pearson, 2008). Global organizational structure is the way a company aims to merge local preferences with global strategy. The definition of global strategy is “strategic choices that have the characteristics of being globally uniform or integrated,” (Yip et al., 1997) such as standardization of products, uniform marketing, and competitive moves, but all globally (Townsend et al., 2004; Zou and Cavusgil, 2002; Bayraktar and Ndubisi, 2014). Global strategic strategy is a way to adjust to globalization. Globalization is “the economic and social process by which economies and communities grow inextricably interdependent “(Jhirad et al., 2009). The recent financial crisis (Das, 2010), large amount of poverty, and climate change are all problems that show how the world is globally connected because all countries impact each other (Jhirad et al., 2009).

Perhaps by obtaining the acceptance of the local population, Rio Tinto was able to mitigate any threats from new entrants into the market at the specific location as well; allowing control of one of the five forces that shape industry competition to remain in check. Finally, helping to form the International Council on Mining and Metals should have allowed them strategic power over existing competitors (another of the 5 forces).