1. External Analysis

In order to understand the environment of the mining industry and evaluate Dicore’s competitors and customers, this chapter will adopt some tools, such as PESTEL and Porter’s five forces, to analyze the external environment of Dicore International.

2.1. PESTEL Analysis

The PESTEL framework is often used to analyze the broad macro-environment of an organization (Johnson et al, 2014). Thus, it is used in this chapter to identify how the trend of drilling industry can be affected by the political, economical, social, technological, ecological and legal factors.

2.2.1. Political Factors

There were two bans on offshore drilling raised during 1980s in the United States, in response to the damage to environment (Hill, 2008). However, those two bans were lifted in 2008 for both political and economical reasons (ibid). This may have little impact on Dicore now, nevertheless, it shows the US government’s determination to protect domestic crude oil and nature gas and to avoid any environmental risks that associated with drilling.

2.2.2. Economical Factors

Although Dicore recovered from the 2008 financial crisis and reached the peak of its stock price in 2012 for $5.12 per share (Bremner, 2014), the fluctuation of metal and gold price started in 2013 has deeply damaged the mining industry again, which resulted in a 49% drop of profit and 21% drop of capital expenditure industry-wide, and also led Dicore’s stock price fallen to $0.97 (ibid). It can be seen that both the economic state and the price of mineral have huge impacts on mining companies’ performance. Thus, forecasting mineral price trends seems rather important for mining businesses to mitigate potential risk.

2.2.3. Social Factors

Due to the special ground conditions of the southwestern region of the United States, drilling in that region