Assignmnet deals with understanding the concept of strategic management w.r.t the budget planning & reporting measures

Home, - Accounting for Strategic Management and Sustainability


This assignment deals with understanding the concept in relation with the strategic management with respect with aspects in relation with the budgeting and planning measures, sustainability and its accounting and reporting measures. Profitability and Break-even analysis along with the understanding various analysis. It further, strategies management areas on account of customer relationship, supplier’s relationship, Inventory relationship, logistics relationship as well as the quality management relationship.The company selected is the BHP Billiton and brief about the company can be stated as one fifty old organisation which has its main product in iron ore, copper and categorized into mining and metals industry(BHP, 2017).

Vision and Mission

The company main aims and goals deal with the perspective of working in an environment which deals with maintaining appropriate form of ethics and management along with ensuring that the company aims at providing a low cost and an ongoing aim of operating for life long on business operations. Not only this it aims at constantly diversifying the commodity and the geography constraints. The company mission and vision are constantly defined in the charter of the organisation on a general basis and it is expanded and expressed in specific description in the investor centre. Looking at the current fiscal year the company is aiming at improving elements in concern with the cost efficiency by at least 15% cost reduction. Ensuring better technology and safety requirements and optimum utilization of resources. Improvement and expansions in terms with copper and petroleum, and lastly, aiming at the supportive environment.  

Budgeting and Planning Analysis

The company core business is the mining and exploration which has been for years however, the company is doing quite a great in terms with global expansion and various allied factor. Recently the company aims at reducing their cost amount by fifteen percent. In this aspect the company aims at reducing the target by further by US $ 2 Billion by end of next year fiscal year which being 2019. Plus, the company is aiming to increase the technology and accelerate high value autonomous condition and the three new centres are opened which are operated highly on an integrated mode. This requires may more planning in operational mode as well as the financial front. Moreover, it has to be defined on a benefit aspect of the results it will achieve and support towards ultimate profits in relation to such investments. 

The planning will be considered an be focused on following aspects: 

- How much time will the set up take to run successfully

- How to derive finances and what form of structuring should be used and applied.

- What are the strategies and role plan must be undertaken to achieve a success story.

The strategies which must be strictly followed by the company must be related to the Porters Generic Strategies which provides in detail a better response about how will it support the business in future. Cost efficiency has been planned by ensuring a check on wastage and un due weightage on the off-production expenses. Skilled labour has been roped in order to increase the efficiency parameters with minimum utilization of resources factors. Thereby, eventually reducing the fixed cost and the semi costbargain at a minimum level which will make the efficiency factor in comparison to cost much worthier to provide business profits.

The technology implementation is planned by inviting debt loan and less involvement of equity resources so that any future support is required the retained earning can be a great support. It supported the Mineral assets to keep a tap record on the growth as well as screen recording.It acts to a set further to innovation for which long term financial planning are required which must be evaluated on cost and benefit basis in terms of production and its correlation with market presence.The budget is planned as considering follows: -

Reduction in fixed costs

Reduction on waste material

Employment of Skilled resources

Increase Market Presence

Reducing variable per unit costs

Maintaining fixed costs

Correct analyzing of the interest cost and future planning paying out targets.

Sustainability Accounting and Reporting Analysis

It is mainly categorized and expressed as the corporate social responsibility report or the sustainability report. The company publishes the sustainability report each and every year including all the parameters which being the economic, social and environmental.

The Report clearly shows the following points the company has as compared to the fiscal year 2016 has reduced injuries per million hours worked from 4.3 to 4.2. On the more the company has ensured that the occupational error have reduced by 76 percent in last five years. In the report which clearly states the statistics that they support communities by doing social investments and for the year 2017 the figure worked up by US $ 80.1 million (BHP Billiton, 2017). In the report it time and again defines that the sustainability is the primary and the main strategy for company success for past years as well as future years to come. The reports definethat it has efficiently covered all the parameter while operating business functions. The company reporting approach is defined under the same framework which is expressed by the International Council

on Mining and Metals’ Sustainable Development Framework which meets the complete criteria of the global platform and the process of accounting of a multinational organisation. Further, it done under a format of a comprehensive level of reporting(BHP, 2018). 

On the more the enterprises have in detailed expressed its materiality assessment as well as the risk assessment. The organisation has in fact in detail described the Samarco project. The company input in regards to Hydraulic fracturing and management Not only this it has streamlined operating ethics and as well as assured the integrity of the working culture on the platform of the procurement as well as the product stewardship. It has also provided the process as to how it has managed the water management, bio diversity along with land management and various concerns on account with air emissions and environmental incidents. In an overall parameter the company has abide by the maximum concerns with respect to the sustainability report.

Profitability and Break-Even Analysis

BHP Billiton profitability drivers can be understood on account of the revenue break down which the company earns on an overall basis. The organisation being huge and vast and doing business on several counts have ensured to provide reasonable business in the following products. Iron ore, petroleum, copper, coal, Group and unallocated items/eliminations. Where maximum revenue comes from the Iron ore and copper which comes to around $ 14,810 million and $ 13,287 million. Latter followed by the other products. Not only this the profits are segmented on the basis of geographical elements as well which being the China on the top chart with at utmost of $ 18875 million(BHP, 2017). Following the second largest sales in north America and Australia which is followed by rest of the other markets. Thus, the company revenue and profits are spread over not only the products but also the geographical boundaries. The driver of the company is to grab that market which has more level of targeted audiences and give them those supply of products out of which maximum revenue can be generated.

The mineral and mining industryare definitely being on a margin of manufacturing and therefore, the need to define the break even point at each level along with calculating the levels cost and volume ratio and pricing. The main source of revenue is the Iron ore considering that factor in mind the companies cost analysis can be defined under following segments labour, energy, various consumables, economies of scale. Freight costing and transportation is the biggest difference creator in terms with understanding the break-even analysis as seaborne customers are more cost friendly in comparisons to the one which are more land borne or distant. 

Considering thePricing and strategic product mix decisionsthe company has efficiently applied the business model on account with the marketing mix by keeping fair balance between all the four Ps of the company. Pricing of the product is based on after studying and analysis the global market and its scope of demand. Thereby, the prices are not fixed however varying from product to product as well as on geographical boundaries. Not only this, it differentiates on the basis of the time lines(BHP Billiton, 2017). Another policy which the company follows is that of the low-price policy on the raw material selling as compared to the finished product supplied it varies to the extent on day basis and not even week or months in order to capture maximum sales. The other strategies include product planning where the company is one of the main players of its product manufacturing and primarily because the supply one more product apart from that which is the oil and gas and that truly helps to garb more customers and supply market will eventually increase, hence ensuring that they still maintain the tag of largest world producers as well as the suppliers on the globe.

Other Strategic Management Areas Analysis

This segment can be defined in a listed format mentioned below: - 

CustomerManagement : - The BHP Billitonmeasure the customer service or rather the services provided account of the balance score card. The company has a separate section which known as the Customer sector groups which in true sense tries to mitigate any risk in terms of exposure and protective form that may lead to any hazardous which may arises using such products. It also deals with the innovative solutions for increases customer growth and brand value.The Net promoter score which measure the customer loyalty in connection with the company and the 2018 year provides the number value Six out of hundred which is actually good because usually these industries have a number value of zero.

Logistic Management: The organisation is constantly making efforts on the stewardship programs since the year 2004. This has eventually helped the company to grow in market presence, goodwill and an excellent bond with the customers. They strongly work under the format of industry associations; the organisation uses the method of block chain analysis for managing and operating the concept of thesupplies of inventory or goods and finished products. Thus, process records the follow of not only wellbore rock but also fluid samples and that to purely on the basis of real time analysis. This method supports the company in terms of acquisition and multi-client recording, at the more it increases efficiency within the organisation build a proper and smooth flow of goods from one place to the other. The best part is that it provides an advantage of making smart business decisions.

Quality Costs -   The four costs can be defined as the 

- Prevention costs - which is undertaken to avoid any concerns or road blocks is in business operations (Burritt, &Christ, 2018).

- Appraisals Costs - which is undertaken to avoid any major quality concerns in business operations by regularly doing investigations.

- Internal Failure Costs - which is undertaken to rework and avoid any defective goods production in relation with concerns in business operations.

- External Failure Costs - which is undertaken to rework of any defective goods production in relation with concerns in business operations after the goods have been produced.

All the four quality costs are present in the BHP Billiton primarily because of the nature of work performed by the organisation.Analyzing in the deeper perspective, it has major concentration on the prevention costs as the such products end processing and any defectives must be curtailed before the such occurrence and low-quality issue are raised.


In a summarized manner this report provides a critical analysis of the company in relation with non-financial factors mainly concentrating more on the social economic factors, customer satisfaction, meeting the quality standards, maintaining a balance between various business operations and the costing analysis. Along with sharing and analyzing different strategies applied by the company to become one of the largest and the biggest organisation in the field of minerals and metals.

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