Glencore Case Study

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Glencore, Xstrata and the Restructuring of the Global Copper Mining Industry in 2012 Diana Alvarez Valencia (1310200) University Canada West Dr. Paul Rome MGMT 661 Strategic Management Tuesday, May 12, 2015 Introduction and Problem Identification In this case study we will identify the problems that can be issued in the process of the merger between two of the largest commodities traders in the world, Glencore and Xstrata. It will provide the background of both companies, the situation analysis, identification of alternatives Companies Background. Glencore had been a trading company since their early years with the name of Marc Rich & Co. Glencore, was founded by March Rich; Rich was a consummate dealmaker, doing business…show more content…
In a global environment commodity industry, Glencore and Xstrata tried to find the best strategy to become more competitive and create a big successful billion company. For that reason, the merge between these two big companies was created. However, there are different problems that can be faced at the moment of the mergers; in the case of Glencore and Xstrata merge, the problem that I this paper will focus is the integration difficulties between these two companies – disparate corporate cultures including unethical practices-. Some of the integration challenges might include: Melding two disparate corporate cultures, Linking different financial and control systems, Building effective working relationships (different managers styles), Resolving problems regarding the status of the newly acquired firm’s executives, Loss of key personnel weakens the acquired firm’s capabilities and reduces its value. (Hitt, Ireland & Hoskisson, 2013). Situation Analysis. The global mining industry becomes more consolidated increasingly and the major players in the industry were choosing as a growth strategy the mergers with different mining companies that can leverage their competitive advantages upon their competitors. The main competitors in the cooper production were : Codelco, BHP Billion, Freeport- McMoRan, Xstrata and Rio Tinto. (Hitt, Ireland & Hoskisson, 2013).

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