BHP Billiton: An Entrepreneurial Audit

1. Introduction

BHP Billiton is a global miner, trader and manufacturer of various natural resources including iron ore, coal, uranium, copper and oil. The company has operations all over the world in countries such as Australia, Brazil, China, Canada and the United States. This report assesses the entrepreneurial qualities of BHP Billiton in order to identify areas in which the company could improve its performance.

2. Key findings

This section provides an overview of the key findings of the entrepreneurial audit of BHP Billiton.

2. 1 History and establishment

BHP Billiton was formed in 2001 through the merger of two companies, Broken Hill Proprietary Limited (BHP) and Billiton plc. The new company was renamed BHP Billiton. Prior to the merger, both companies had been in operation for over 100 years. BHP was established in 1885 while Billiton plc was established in 1860. The merger created a company with a strong financial position and a large geographical footprint.
BHP Billiton is currently headquartered in Melbourne, Australia. The company has a dual listed structure with its primary listing on the Australian Securities Exchange (ASX) and a secondary listing on the London Stock Exchange (LSE). The company is majority-owned by Australian shareholders (57%) and British shareholders (19%).

2. 2 Ownership

BHP Billiton is a public company with shares listed on the ASX and LSE. The company has a dual-listed structure which means that it has two classes of shares, ordinary shares and preference shares. Ordinary shares are traded on the ASX while preference shares are traded on the LSE. The company has a total of 3 billion shares outstanding.
The largest shareholder in BHP Billiton is BlackRock Inc., an American asset management firm. BlackRock Inc. owns 9% of the company’s shares. Other major shareholders include Vanguard Group Inc., State Street Corporation and Capital Research Global Investors. Collectively, these four shareholders own 28% of BHP Billiton’s shares.
The board of directors is responsible for the overall governance of the company. The board is comprised of 12 members, 8 of whom are independent directors. The chairman of the board is Ken MacKenzie while Andrew Mackenzie is the chief executive officer (CEO).

2. 3 Strategic path

BHP Billiton has adopted a strategy of diversification in order to reduce its reliance on any one commodity or geographic region. The company has operations in 10 countries across 4 continents. This diversification strategy has helped to insulate the company from commodity price fluctuations as well as political and economic risks in any one country.
The company’s main business segments are iron ore, coal, copper and oil & gas. These segments account for 87% of the company’s revenue. BHP Billiton’s iron ore operations are located in Australia while its coal operations are located in Australia and Colombia. The majority of the company’s copper operations are located in Chile with smaller operations in Peru, Australia and Indonesia. Lastly, BHP Billiton’s oil & gas operations are located in Trinidad & Tobago, Algeria and the United Kingdom. Within each business segment, the company has further diversified its operations by developing multiple mines or assets. This strategy provides the company with a buffer against any one mine or asset becoming non-operational due to technical difficulties or political issues.

2. 4 Human workforce

BHP Billiton has a global workforce of approximately 55,000 employees. The company’s workforce is split fairly evenly between Australia (28%), South America (23%) and Asia (21%). The remaining 28% of the workforce is spread across the company’s other operations in Africa, North America and Europe.
The company has put in place superior human resource management practices which include software HR SAP and other human resource information systems (HRIS). These systems help to track employee performance and development. The company also provides its employees with training and development opportunities. In addition, BHP Billiton has a recognition and rewards program in place to motivate employees.

2. 5 Other resources

In addition to its human workforce, BHP Billiton has a number of other resources at its disposal including a strong financial position, a large geographical footprint and a diversified portfolio of assets.
The company has a strong financial position with total assets of $140 billion and total equity of $48 billion as of 30 June 2017. This gives the company a solvency ratio of 3.5x which is very strong. In addition, the company has an investment-grade credit rating from all three major credit rating agencies (Moody’s, S&P and Fitch).
BHP Billiton’s large geographical footprint provides the company with access to a wide variety of natural resources. The company’s operations are located in 10 countries across 4 continents. This gives the company a significant competitive advantage over companies with a more limited geographic reach.
Lastly, BHP Billiton’s diversified portfolio of assets protects the company from fluctuations in commodity prices as well as political and economic risks in any one country. The company’s main business segments are iron ore, coal, copper and oil & gas. These segments account for 87% of the company’s revenue.
Within each business segment, the company has further diversified its operations by developing multiple mines or assets. This strategy provides the company with a buffer against any one mine or asset becoming non-operational due to technical difficulties or political issues.

3. Conclusion

BHP Billiton is a strong and well-established company with a long history dating back to 1885. The company has a number of competitive advantages including a strong financial position, a large geographical footprint, a diversified portfolio of assets and a highly skilled workforce. The company has adopted a strategy of diversification in order to reduce its reliance on any one commodity or geographic region. This strategy has helped to insulate the company from commodity price fluctuations as well as political and economic risks in any one country.

4. Recommendations
The following are a few recommendations for BHP Billiton:

-Continue to invest in human capital: The company’s superior human resource management practices give it a significant competitive advantage. The company should continue to invest in its human capital through training and development programs as well as employee recognition and rewards programs.
-Maintain financial discipline: BHP Billiton’s strong financial position is one of its most important competitive advantages. The company should continue to maintain financial discipline in order to protect this advantage.
-Acquire new resources: The company’s diversified portfolio of assets protects it from fluctuations in commodity prices as well as political and economic risks in any one country. BHP Billiton should continue to acquire new resources in order to further diversify its portfolio.

FAQ

I selected the business for my entrepreneurial audit report by looking at businesses that I was interested in and that I thought would be a good fit for me.

The main goals of an entrepreneurial audit report are to assess the feasibility of a new business venture and to provide recommendations for how to improve the chances of success.

An entrepreneurial audit report differs from a traditional business plan or feasibility study in several ways. First, an entrepreneurial audit report is typically shorter and more focused on specific aspects of the new venture. Second, an entrepreneurial audit report includes an assessment of the entrepreneur’s skills and experience, as well as a review of the market opportunity and potential competitors. Finally, an entrepreneurial audit report includes recommendations for how to improve the chances of success for the new venture.

Some key components of an entrepreneurial audit report include: -An overview of the entrepreneur’s skills and experience -A review of the market opportunity -An analysis of potential competitors -Recommendations for how to improve the chances of success