AAC

Business Policy Review

Ajinkya Naik [124] Akankssha Gupta [36] Aniket Sengar [47] Harish Edara [20]

Profile

Business Units

Timeline

Major Players

Market Share
De Beers Alrosa Rio Tinto

Five Forces Analysis

Entry Barriers:
High Capital Costs

High

Economies of Scale
Protected Cartel Political Instability Vertical Integration

Five Forces Analysis

Moderat Supplier Bargaining Power: e

Supplier Monopoly No threat of Forward/Backward Integration Low Supplier Concentration High Replacement Costs

Five Forces Analysis

Moderat Buyer Bargaining Power: e

High Price Sensitivity High Demand Strong Brand Identity

Five Forces Analysis

Degree of Rivalry:
Steady Growth Low Concentration of players Cartel High Exit Barriers Low Product Differentiation

Low

Five Forces Analysis

Threat of Substitutes:
High Perceived Value Substantial threat of Substitutes Low Switching Costs Low Propensity to Substitute

High

Better Investment Avenues

The Value Chain

Value Added at each stage

Resource Based View

Valuable Rare High entry barriers, Low number of players Inimitable Path dependence, high degree of vertical integration NonSubstitutable Own 65% of South Africas mines

Blood Diamonds

Core Competencies
Organizing Investing Operating
Safely, sustainably and responsibly Strive to achieve zero harm

Employing

In World class Effectively and assets and Efficiently commodities Operational Own, operate excellence and grow Cost reduction mining assets Choose assets Value Driven with expansion Leadership potential

The Best people

Consider people as prime assets

Emphasize integrity

Believe in percolation of vision

Corporate Strategy

Restructuring

Tangible impediments to Imitation

Intangible impediments to Imitation

Historical Circumstances
Path Dependence has caused high amount of dependency between the company and the state

Social Complexity

Dealer relations Family Managed SBUs

First Mover Advantages

Tetra Framework
Imitation Substitutio n Added Value Appropriated Value

Slack

Hold Up

Challenges
Social Responsibility

Spread of HIV/AIDS
Supply Chain Inefficiencies Sustainability of resources South Africa - Country Policies

Blood Diamonds
Blood Diamonds are diamonds mined under factions opposed to Internationally recognized Governments (in inhuman working conditions, child labor et cetera), and used to fuel military action against such governments

Commitments
In 2009, Xstrata approached AAC for a merger Currently, $70 Billion worth of projects are in the pipeline (4 major growth projects) the Los Bronces copper expansion project in Chile the Barro Alto nickel project in Brazil and Kolomela iron ore project in South Africa

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