Contents

Summary.....................................................................................................................................................2
Introduction.................................................................................................................................................2
Macroeconomic factors...............................................................................................................................2
Industry analysis & business strategy..........................................................................................................2
Conclusions..................................................................................................................................................3
Recommendations.......................................................................................................................................3
Bibliography................................................................................................................................................4
Summary
One of the risk-averse investors hire financial advisors for taking their consultancy survives regarding the
investment, should investors keep the investments, should investors sell their shares or should they
invest in other business opportunities. Risk-averse investors are those investors which prefer the
outcome of investment with low uncertainty instead of high uncertainty.

Introduction
BHP is Australian mining, petroleum, and metal group. The Broken Hill proprietary company was started
in 1885 and declares the world's biggest company in contents of market capitalization and 3rd largest
company in contents of revenue in 2017.

The company's mining operations include coal, copper, iron ore, and petroleum. The company also owns
some of the mines all around the world Ohanet gas field, Samarco, ROD gas field, and a lot more.

Macroeconomic factors
Macroeconomic Explanation
factors
Economic growth Over time, as economic growth rate increases, so does the production of
rate goods and services in the BHP Group and the mining sector as a whole.
BHP Group profits increase as the economy grows. Stock prices rise as a
result. This provides the BHP group with more capital to invest in and hire
more employees.
Unemployment Unemployment may negative affect the economy as whole but affect the
BHP and all over the mining group in positive. Unemployment cause in
cheap supply of labor, reduce the cost of manufacture and enhance the
profit of the company
International For the BHP group and all other mining businesses, international
markets commerce provides new markets and exposes nations to commodities and
services not accessible in their own economies. This will allow the BHP
group to gain a competitive advantage in the global market.
Inflation Inflation causes an increase in the cost of production and decreases the
profitability of the company. Inflation causes the product to lose price
compatibility in international trade.

Industry analysis & business strategy

Five force model Explanation
Threat of new This term refers to the danger that potential business man provide to current
entrants businessman in an industry. Because the mining sector is successful, it will attract
additional rivals wanting to profit and create problems for the BHP group

Threat of The threat of substitutes occurs when companies within one industry are forced to
substitutes compete with industries producing substitute products or services. This situation benefits
the customer by giving them the option of choosing the best product at an affordable
price and of high quality. This force the BHP and other mining companies to reduce the
prices and compromise the profitability 

Bargaining Buyer bargaining power in an industry influences the competitive environment in the
power of buyer mining industry for BHP and other mining groups, as well as the seller's ability to achieve
profitability. Strong buyers such as the government, large industries, and others can put
pressure on mining companies to lower their prices, improve product quality, and
provide more and better services.

Bargaining The Bargaining Power of Suppliers is the inverse of the Bargaining Power of
power of customers and refers to the pressure that suppliers can exert on BHP and other mining
suppliers companies by raising their prices, lowering their quality, or decreasing the availability of
their products.

Rivalry among Rivalry among existing competitors leads the companies to reduce their profits by
existing offering their products at low cost, offer good deals to the supplier of the other company,
competitors create regulatory and law issues by using political influence.

Conclusions
BHP group is a mining group with a lot of potentials. The performance of the group is shown by the
growth of its volume over the years. BHP should enhance the performance to improve the deficiencies
in the management and the operation of the company.

Recommendations
 Investors must hold some of their investment and the remaining should be investing in other
companies
 Investors should also invest in some of the debt finance to reduce the risk that company share
price moves up and down due to its volatile nature
Bibliography
AMADEO, K. (2020, Octuber 20). interest rate. Retrieved from https://www.thebalance.com/what-are-
interest-rates-and-how-do-they-work-3305855.

Biktimirov, E. N. (2003, January). ROR. Retrieved from

https://www.researchgate.net/publication/259391710_Definitions_of_return.

HAYES, A. (2020, April). Market. Retrieved from https://www.britannica.com/topic/market.