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Orica Limited Pest Analysis

  • Date Submitted: 03/09/2015 06:52 AM
  • Flesch-Kincaid Score: 29.3 
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Orica Limited (ASX: ORI)
Introduction
Orica Limited (ORI) has become one of the world’s primary mining services companies in the manufacture and distribution of mining products and services, consumer products, chemical products and services, and fertilizers (Orica Limited 2011) with its widespread geographic base in over 50 countries. ORI operates through business segments naming Orica Mining Services, Orica Chemicals and Minova, which is the ventilation, water control and strata support systems (Orica Limited 2006). The strategy is to be globally leading in providing highest quality to the mining, manufacturing and construction services, which will then eventually lead to long term growth in production and development (Freed 2009). Moreover, ORI has a strong focus on mining with over 65% of the market share in Australian industry (Mckean 2012). However, Orica Limited experienced a major loss both in financial and reputational terms. Toxic leaks at Kooragana Island plant had a cost of more than $40 million and the efficiency in using its mining assets has been falling despite the increase in assets (Cook 2011). As such, the Managing Director, Ian Smith, has been implementing dramatic changes in business strategy and structure, and relationships with ORI’s exogenous environment by creating executive role in corporate social responsibility for a more valuable and accountable structure (Durie 2012).
A Political, Economic, Socio-Cultural and Technological (PEST) framework is applied to analyse various external opportunities and threats for ORI. Considering the current PEST environment, the opportunities that ORI can achieve are the company’s influence over the government due to the high market share, the significant growth in mining sector, which leads to an increase in demand, and the advanced technology in control system. Nevertheless, there are threats for ORI such as the legal actions against the Greens due to the effects upon the environment, strong Australian...

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