Free Essay

Marketing, Entering Into a New Market Brochure

In: Business and Management

Submitted By cuddlybabe10
Words 1044
Pages 5

About Us
BHP Billiton is the world’ largest diversified natural resources company, with a network of 100,000 emploees and contractors in over 25 countries, and is involved in over 100 operations. Our organization is an Australian based company created through the dual listed companies merger of BHP Limited and Billiton Plc in 2001. We pursue a strategy of developing a diversified portfolio of quality ‘tier one assets’ including Steelmaking products, Nonferrous products, Energy products.

10,000 employees and contractors

profits of $13 billion
(June 2010)

world’s largest mining company measured by revenue world's third-largest company measured by market capitalization – value of $165 billion
(June 2010)

Mining industry potential
China is rich in natural mineral resources and are widely deposited throughout all provinces. In fact due to the industry and the construction sector, China’s natural resources account for 48.6% of China’s GDP. However the lack of adequate, advanced technologies, hinder the development of the mining industry and as a result, most of China's mineral potential remains unexploited.

An abundance of non-metallic mineral deposits
China is one of the few countries in the world that contains a wide range of non-metallic mineral deposits. China has vast quantities of over 5000 non-metallic mineral reserves, one of which is Potash.

China has a great demand for natural resources
After joining the WTO, China became the world’s largest producer of manufactured goods. China requires massive amounts of minerals and natural resources for continued industrial growth. China is one of the world’s largest consumers of Potash. Potash is a globally traded commodity, primarily used in the manufacture of fertilizers for use in agriculture. The global demand for potash continues to rise due to the steady rise in the global demand for food production. The primary markets for potash consumption are China, the United States, Brazil and India. China imports most of the potash it consumes. Demands for potash are expected to remain high due to expanding economies in developing countries.

Potash is a key resource
Fertilizers - China is the most populous country in the world, resulting in a huge demand for food production, arable land, and fertilizer. However, Chinese demand for potash exceeds supply. With the necessary advancements in mining technology, we believe we can extract China's potash deposits and use them effectively in China. Potash is a green fertilizer - Potash is a naturally abundant mineral and is straightforward to extract and refine. The green aspect of potash adds to the appeal and the competitive edge it has over other fertilizers and minerals. Industrial uses - Although more than 90% of Potash produced is used in agriculture it is also used in some industrial processes such as glass and soap manufacturing and pharmaceuticals. China is the second largest consumer, accounting for about 25% of industrial potash use. Thus, extracting China's potash for domestic usage can contribute to China’s industrialization process.


Global potash production and reserves by country

Mode Of Entry
• • • • • • • Strategic alliance between BHP Billiton and Salt lake Potash Corp. BHP Billiton acquires 15% equity holdings in Salt Lake Potash Corp. Instant leverage for BHP through pooling, exchanging and integrating business resources for mutual gain. First mover advantage gained by exploiting speed to market and achieve transformative synergies. BHP will provide leading technology in exploration to provide more cost-efficient and sustainable potash in China. Salt Lake Potash Corp gains the opportunity to expand globally with the reputation of the alliance. Early entry into China should guarantee a great strategic alliance. The supply of Chinese potash is then expected to rise accordingly as exploration of potential exploitation sites accelerate over time.

Key facts of Salt Lake Potash Corp
Located in the northwest of China, where the land is rich in non-metallic resources. Trading on the Shen Zhen stock exchange. With potassium chloride reserves of 240m tonnes, the mine can last 60 years. According to the 2011 international price of potash – at $400/tonne, the value of Salt Lake Potash Corp is approxi mately $90bn.
Total Capital

Largest Shareholder (30%)

2nd Largest Shareholder (8.1%)

Jan 2012: Approaching OHYH regarding to the acquisition and start an 8 week due diligence and negotiation

April 2012: Contract of acquisition agreed and alliance starts

May 2012 - May 2013: BHP utilizes its extensive expertise and technologies to increase efficiency and productivity in compliance with the Chinese government

May 2013 - 2015: Explore new potash mines in China

2015 onwards: Transformative international acquisitions of potential competitors, e.g. PotashCorp.

Our offer to you
For this proposed project, the 15% acquisition of Salt Lake Potash Corp requires an initial investment of $1,200m. During the first and second year of the acquisition, Salt Lake Potash Corp will be expected to make a sales turnover of $1,800m (each year). As BHP’s leading technology in potash exploration will increase the production and quality of the product, the sales will increase and the costs will reduce over time. Sales increase to $2,200m in year 3 and 4, and $2,600m from year 5 till year 10. Meanwhile, the estimated costs decrease. The gross profit rises to $330m from year 5 up until year 10. The Net Present Value of the 10-year project is estimated to be approximately $1370m .

- Initial investment: 15% share acquisition, cost approximately $1,200m - Increasing production, increasing sales, reducing costs - Yearly Return: From 14.36% up to 21.55% - 10 Years project NPV: $1369.797m - Payback period: 4 years 2 weeks - IRR: 23%

Sustainability Analysis
-Large Chinese domestic potash demand market -Strategic Alliance: Increasing efficiency in production and exploitation, reducing costs -Less reliance on imports in long run, greater stability in food prices and production


-Concern of stakeholders, respect and promote human rights -Organizational Health, Safety, Environment and Community (HSEC) standards. -BHP Billiton Sustainable Communities’ charity, and the ‘Matched Giving Program’ -Creating employment opportunities with fair wage


-Committed to Carbon Disclosure Project


-Reductions in energy consumption of 6% and GHG emissions of 300m tonnes in 2010 -Land rehabilitation -R&D effort to extend resource life and to recover, recycle and reuse minerals.

Similar Documents

Premium Essay

Hul Entering in Rural Market

...lack of growth, increasing attention was directed to the company’s Millennium Plan an ambitious blueprint outlining the company’s growth strategies for the 21st century. The Millennium Plan was a part of the company’s renewed emphasis on business focus and operational efficiencies. Additionally, a core aspect of the Plan was to identify and nurture businesses of the future. Over 150 new businesses were proposed before the list was narrowed down to nine. These included a foray into drinking water, a plan for network-based marketing (along the lines of Amway) and an entry into retailing herbal therapy products and services through a chain of therapy centers. Perhaps the most interesting, though, was an initiative called Shakti, which aimed to extend the reach of HLL’s products to the 742 million rural consumers in 637,000 villages at the base of the economic pyramid, a market not well-served by HLL at the time. NO T On August 30, 2004, Hindustan Lever Limited’s (HLL) share price on the Bombay Stock Exchange touched Rs.100.5 (US$ 2.28) - a new low for one of the largest Indian companies by market value (see Exhibit 1). In its Q2 2004 results, HLL’s bottom line had fallen by 43% due to price pressures in its mainstay detergents business. Procter & Gamble, its long-time nemesis, had unveiled a series of price cuts on its leading detergent brands, Ariel and Tide, forcing HLL to respond. As a consequence, operating profit margins, which had peaked in 2002 at 19.6%, declined to......

Words: 9456 - Pages: 38

Premium Essay

Entering New Markets, Methods and Expectations

...Over the past forty years a new growing trend has been detected. This coincides with the desire of businessman to dislocate their production and companies outside the domestic market. Such phenomenon, known as “delocalization of production”, can be defined as the social/ managerial/ organizational process through which firms not only deploy their sales on foreign markets, but they also draw supplies like raw materials, technology, facilities, equipment, financial resources and manpower. The aim of this paper is to provide an analysis on winning internationalization strategies, that will help a company to successfully penetrate a new market. Further on we will see a little case study on the shoes and accessories company Geox, performing an overview of its presence on international markets, providing a little historical background of the company and evaluating its competitiveness. Competition intensification on the global scale has lead an increasing number of companies, in the last decade, to seek new job opportunities on international markets. Internalization, today, is not only a way to increase the firm’s value, extends its competitive advantage and access to new opportunities. In our current economic environment it has become an useful and practically necessary way that may guarantee a firm’s outliving. Going international for a company means going through a tough and long process, that will change its assets completely and with no coming back. It involves......

Words: 3935 - Pages: 16

Premium Essay

Whole Foods Entering Foreign Market

...States, Canada and the U.K. It is consistently ranked in the top 100 best companies to work for and the top 100 best Corporate Citizens. Business Proposal: This document outlines the possibility of Whole Foods expanding into the German Market. Considerations are explored in the realm of German Culture, the Organic Food market, Competitors, Pros and Cons, Entry and Exit Strategy, and Human Resources strategy to declare whether or not Germany is an appropriate fit for Whole Foods. Whole Foods Entering Germany: Successful Whole Foods CEO John Mackey, is quoted as saying "If you want to be competitive in the long term, your business needs to have discovered its higher purpose and it needs to adopt a stakeholder philosophy." In a world where unhealthy food, rife with chemicals and saturated fats is becoming the norm; Whole Foods definitely seems to have found it’s higher purpose. Whole Foods, which is providing individuals with fresh organic food to promote a healthy lifestyle and a higher way of living is poised to spread this philosophy to the rest of the world. This stakeholder philosophy puts the ownership of healthy living on each and every one of us by providing the piece that has sorely been missing in the American market; options. The Whole Foods motto is “WHOLE FOODS, WHOLE PEOPLE, WHOLE PLANET”, therefore it is fitting that Whole Foods continues an expansion past Canada and the U.K into other areas of the world that can benefit from such options. The......

Words: 954 - Pages: 4

Free Essay

Peru: Are We Entering in a New Crisis?

...  Peru: are we entering in a new crisis? by Marco Morante Monday September 23rd, 2013 Last month newspapers’ headlines were talking about a statement made by Ollanta Humala to the media: “The crisis has arrived, but we have a solid economy”; indeed there is a global crisis going on and indeed the Peruvian economy growth’s expectation is not the very same as in just a few months ago; but, is Peru about to enter in another crisis as the ones suffered in past years? Disregarding the several replies, opinions and views of the message that our president really intended to give, let us remember Peru’s past crisis and understand the economic frame in which these crisis developed. A little bit of Peruvian’s Recent Crisis History1 In the early 80’s, during Fernando Belaúnde’s government, “El Niño” phenomenon affected severely the northern coast of Peru, impacting mainly in the agricultural sector (consumption), the public and private investment suffered an important contraction, also the external demand was affected due to the crisis generated by the adjustments of the debt in México (having a deep effect in all economies in Latin America). In year 1983, the metal prices fall meant for Peru difficulties for the payment of the external debt and a high increase in inflation, reaching a concerning 163% inflation for the last year of the “Sol” (1985). Also, in this year the economy suffered a contraction in the GdP growth: a decrease of 9.3%, the largest one until that......

Words: 2920 - Pages: 12

Premium Essay

Netflix: Entering a Brave New World

...Chapter 4: "Netflix: Entering a Brave New World" Q 1. Some of Netflix’s capabilities and core competencies are mentioned in the case. Go to the firm’s Web site ( and use other information sources as well to see if you can identify additional capabilities and core competencies. Do you think the core competencies mentioned in the case and/or the ones you found are valuable, rare, difficult to imitate, and nonsubstitutable and as such, are also competitive advantages? Why or why not? Answer The core competencies of Netflix lie in primarily its model customer-care and customer-service, which entails the fact that Netflix is well aware and knowledgeable of its customer and his preferences. Another core competency that has helped the business grow is its IT management and development. Moreover, Netflix merges these two core competencies to gain a higher competitive advantage over competitors Hitt et al, (2007) states that Netfix uses the advanced technology to track customer preferences for movies. This let it tailor availability of services and products accordingly. In addition, it allows Netflix to stay ahead of competitors as well as a chance to make customers happy, by delivering the content they want at their doorstep. Netflix meets these two primary objectives everyday through focus and consistency, which are part of the company’s competencies; thus it allows maximum competitive advantage over other market players. Although, these......

Words: 662 - Pages: 3

Premium Essay

Entering the Foreign Market

...Entering the Foreign Market Principles of Marketing MKT 100 November 03, 2013 My company is called Henderson’s iPhone Store. We market all the latest versions of Apple smartphones. We will be marketing the new Apple iPhone 6 and entering all foreign markets. The target market for the iPhone is teenagers, college students, business class individuals, and adults. (Apple Inc., 2013). Our specific target market for this report is a married person, approximately 36 years old, and lives in a major city. This individual has a steady job, makes a solid income of about $65K a year. This individual likes to play sports, and has a very active social life. He has high goals which include gaining the experience which will assist him in landing his dream job with an income of over $100K yearly. Consumer’s behaviors include finding convenient mobile devises that offers more efficient ways for calling, messaging, and entertaining using a single button. These consumers are looking for the latest technology to satisfy their personal and social needs. Most of these consumers are affluent, and will purchase expensive products and brands which are shown as a status symbol (Apple Inc., 2013). Identifying the target audience is an important success factor for Henderson’s iPhone Store. Market segmentation can be used in many ways to construct the framework to influence their targeting activities. Understanding the market and the factors that influence consumer buyer behavior......

Words: 1302 - Pages: 6

Premium Essay

Entering Foreign Market

...Entering Foreign Market So you are considering entering the foreign market. Your company has been doing well in your home country and you want to approach another level of trade and sales. When it comes to a business entering a foreign market many things must be taken into account. Where, when, and how? Each question must be looked over carefully before making any decision. Where you decide to enter in the foreign market can help or harm your business. When and how you plan to enter is very important as well. You do not want to enter a country’s market at a very bad time because they may not be the best route for your business to take unless you actually plan to help and provide a service to whatever problem is going on within that country. Throughout this report I will explain where, when and how to enter the foreign market and why each is important. First, when considering the option of entering a foreign market the first thing you want to do is take a good look at your business and begin the process of deciding where you should consider making a presence in the foreign market. I believe it is important to start off with entering one country first before taking on the whole market at one time. You must remember factors greatly vary by country to country which can greatly affect the ability to successfully engage in business. So in other words the same thing that worked for you in the United States may not work for you in another country. It is smart to study the foreign......

Words: 1515 - Pages: 7

Premium Essay

The Criteria of Entering Global Market

...Product Size Examine the global markets where you plan to sell your products for the standard purchasing patterns of consumers. In many international destinations, consumers buy items frequently, but in smaller quantities, due to transportation, space and monetary limitations. Match your product offerings to consumer behavior to increase your international product success. Offer smaller quantities in easy-carry packaging. Consider offering larger quantities in single-serve packages for sales at smaller, neighborhood-oriented stores. Distribution Distribute your products through multiple channels to increase product awareness. In many countries, individuals buy a large portion of their consumable products in small neighborhood stores. The merchants in these stores obtain their supplies by direct purchases at larger or wholesale markets and through local distributors. Ensure your products are available in all distribution channels to increase product exposure and availability to all merchants. To help penetrate new global markets, offer samples, targeted promotions and joint distribution with an established product to increase product adoption. Adaptation Adapt your products to local tastes, governmental regulations, technological differences and cultural norms. Ensure product packaging uses appropriate terms and images for your target market. For example, remove cattle-based ingredients from products you sell in India due to common religious beliefs that cows are......

Words: 352 - Pages: 2

Premium Essay

Marketing Strategies and International Market

...MARKETING STRATEGIES AND INTERNATIONAL MARKETS Before talking about how transnational companies enter new markets and develop on the old ones, we should clearly understand the very concept of marketing in general, as well as have an idea of ​​what kinds marketing strategies exist in the world today. THE CONCEPT OF MARKETING The situation with the definition of "marketing" is the same as with many modern terms. In the world literature there are so many definitions of the term "marketing", here are just few of them: «Marketing - a human activity aimed at meeting needs through the exchange»; «Marketing - social and managerial process by which individuals and communities by creating products and exchanging them get what they need»; «Marketing - is the process of planning and implementation of design, pricing, promotion and realization of ideas, goods and services through the exchange of satisfying goals of individuals and organizations»; «Marketing - social process aimed at meeting the needs and requirements of individuals and groups through the creation and suggestion of valuable goods and services and sharing with others ; As you can see, what all these definitions have in common is that marketing is directly connected with the exchange of goods and services to meet the needs. Consequently, it is impossible to give a truly complete and accurate definition of "marketing" because it covers absolutely all spheres of human life. Many people believe that marketing is just......

Words: 1937 - Pages: 8

Premium Essay

Xiaomi Entering Indian Market

...Strategic Management Final Project Xiaomi Entering India’s Mobile Market Analysis Content 1. Introduction ---------------------------------------------------------------------------------------------- 3 2. General Environment analysis of the Mobile Industry in India --------------------------------6 3. Business model of Xiaomi with India market analysis--------------------------------------------9 4. Comparison between Samsung and Xiaomi -------------------------------------------------------11 5. Recommendation---------------------------------------------------------------------------------------13 6. Conclusion ------------------------------------------------------------------------------------------------15 7. Reference ------------------------------------------------------------------------------------------------ 15 1. Introduction 1.1 Background information of Xiaomi Xiaomi, a leading smartphone brand in China, has been trying to enter India’s mobile market in this year. India is a developing country which has a potential market for smartphones. There will be a detailed explanation and analysis of how Xiaomi enters India’s mobile market. We will also evaluate its strategy and provide some opinions or recommendations. We will describe the business model of Xiaomi and the original strategy that Xiaomi used in mainland China first. Then talk about the mobile market of India and the general environment of......

Words: 3370 - Pages: 14

Premium Essay

Entering Hong Kong's Laptop Market

...Running Head: 4-3 Short Paper: Market Potential Indicator: Hong Kong 1 4-3 Short Paper: Market Potential Indicator: Hong Kong Chris Hicks Southern New Hampshire University 4-3 Short Paper: Market Potential Indicator: 2 Abstract The world as we know it in the business sense is made of established markets and and emerging markets. With the Market Potential Indicator (MPI), a diverse combination of international economies, consumption/use data, and socio-politics, are all condensed into a (mostly) easy to read format that is an invaluable tool to help businesses may make the tough decisions of where they should locate and grow their international footprint. The MPI index is armed with a wide variety of dimensions and weighted measurements that it uses to come up with ratings. Some of those are Market Size, Market Intensity, Market Consumption Capacity, Market Growth Rate, Commercial Infrastructure, Market Receptivity, Economic Freedom, and Country Risk. Measurements draw upon Urban Population, Real GDP (gross domestic product) Growth Rate, Electrical Consumption, technology use ( IT, smartphones, PCs, TVs), etc. Sharing the boon of modernization, privatization, and fast industrialization, these emerging markets comprise almost fifty percent of the world’s population and account for a large portion of the world’s output. With the kind of strong GDP growth that is attractive to investors for their large market potential, global marketing has become more far......

Words: 700 - Pages: 3

Premium Essay

Kpj Berhad Entering Global Market

...given a restriction and limitation of 20 km distance between private hospitals. Strong growth expectations and the industry’s relative resilience have rising the investments in the private healthcare segment either from local and oversea company such as IHH Healthcare (flagship Pantai Hospital and Gleneagles hospital) and Columbia Asia. Rivalry is still remains important factors to be considered by KPJ because it may hurt profitability and decrease its market share. Therefore, it is essential for KPJ to develop a better strategy to gain more competitive advantages against rivals to secure their business locally and then search other market internationally and also diversify their business into new market segment such as nursing collage and retirement village for their long term growth and business sustainable in future. There are many foreign company especially from Vietnam, Bangladesh and Middle East have come to KPJ for its management expertise. KPJ also have enough expertise and knowledge to contribute to the new markets abroad. The strategy abroad is join venture management rather that owning the hospital. 3.0 KPJ HEALTHCARE EXPAND BUSINESS INTERNATIONALLY For growth prospects and good opportunity, KPJ Healthcare has expands their business to Thailand , Indonesia and Australia. KPJ have own 2 hospital in Indonesia, handle 1 hospital in Thailand and 1 aged care and retirement village in Australia. 3.1 Australia In Australia, KPJ Healthcare have a 57% stake in......

Words: 2131 - Pages: 9

Premium Essay

Pricing When Entering a New Market in B2B Environment

...WHEN ENTERING A NEW MARKET IN B2B ENVIROMENT: Understanding the B2B Dynamics Seminar Report ii ABSTRACT With the rise of globalization and saturated local markets, many companies started chasing international opportunities that would help them expand to new countries and increase their brand recognition around the globe. One of the challenges that companies face while entering a new market is defining the right price and pricing of their offering to be competitive and successful in the market. In B2B area, there are not any wide research on pricing issues that companies face in the markets that they are planning to enter and the effects of business relations on pricing. This paper focuses on market entry strategies and market entry modes, the fundamentals of pricing in a new market and the differences of B2B and B2C pricing. The study covers market entry modes and its impact on profitability, value creation in B2B area and the key aspects of pricing behaviour while entering a new market. This study in general provides a framework for implementing the right pricing strategy while entering new markets and defining the right pricing behaviour in B2B environment. This framework enables companies to understand the dynamics of B2B environment covering buyer-supplier and distributors relations and providing pricing models for companies to be a competitive player. Tamur, O. iii PREFACE This paper discusses the concepts of pricing and pricing behaviour in a new......

Words: 5613 - Pages: 23

Premium Essay

Market Entry - Ikea Entering Russia

...------------------------------------------------- IKEA Entering Russia Case Presentation Summary BMKT507 – Principles of International Marketing Seminar Tutor: Dr Nathan Subramanian By James Whelan, Emmanouil Siontas, Marta Okonska, Ligia Moreno Soares & Henning Meyer March 2012 Westminster Business School I. General Overview * Leading home furnishing company with more than 200 stores in 32 countries and a total of 84,000 employees. * Entered Russia in 1991 - first store did not open until 2000. * Move to Russia seen as a long-term investments by IKEA’s management * All stores are fully owned ventures by IKEA II. IKEA’s entry strategy in Russia – Adaption or Standardisation? * The company made the Russian consumer buy its products as a necessity * Long-term vision gave the flexibility required from IKEA to “invent” a market gap that was to be filled by them. * Adapted to the market they entered, something that would make the company limit the distance from the pulse of the Russian reality. III. How did IKEA change its market entry strategy to enter an emerging market? * No special market research was carried out before setting up the first store – Market research in emerging markets only gives a snapshot of the current market situation; Market and consumer behaviour as well as market structures can change rapidly in emerging markets * Since IKEA considered Russia a long-term investment,......

Words: 282 - Pages: 2

Premium Essay

Entering Us Markets for Italian Manufacturers

...Entering the US Market- American Business Perspectives for Italian Manufacturers to Consider _ Part 1 By Laura Kolbe An investigation of 183 countries in 2010 by the International Bank for Reconstruction and Development reported that the United States is the 4th easiest country to do business in out of 183 countries. Italy is 78th, France 31s and Germany is 25th.. There are Italian products that are selling in more difficult markets than the U.S., which are not in U.S. Other Italian products are in the U.S. but are not maximizing their potential. For example Lambrusco and Parmigiana Reggiana have not been ideally positioned in the U.S. Lambrusco is sold with a screw-on bottle cap restricting its potential sales. Parmigiana cheese’s U.S. positioning does not maximize consumer awareness of the product’s uses. I advise companies who are entering new markets that it is not enough to have a quality product and know its success strategies in its existing markets. You must also know the other side of the story. That is, you also need reliable information of your new market to realize whether there is opportunity for your product and to achieve profitable product adaptation/positioning. To truly know the other side of the story sometimes you have to talk to the natives! Why did it take an U.S. entrepreneur to visit Italy, observe the coffee shop ritual and turn it into Starbucks; a U.S. $9,774.6 million company? The answer is market knowledge of both...

Words: 528 - Pages: 3