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Corporate Social Responsibility:
Transcript of Corporate Social Responsibility:
The Latest Boom Product for Mining Giant Rio Tinto
Case 5, Page 397
Presented by; Jimena Blanco and Minka Marriott
Iron Ore Mining
Yandi and Marandoo State Two Mines, Pilbara, Western Australia
Hamersley Irrigated Agriculture Project
It is reasonable to tie a corporate strategy like corporate social responsibility to a profit-making (or cost-reducing) business strategy?
Rio Tinto is a miner. Running catle stations is not core business so how should the company handle this opportunity? Should it be at arm's length profit making enterprise?
Business Level Strategy
gain competitive advantage
exploit core competencies
provided comparative advantage
What to offer customers?
How to manufacture them?
How to distribute?
Business Strategy Foucus
Currently low cost provider
Lead global mining and metals to maximize value for shareholders.
Mining Environment change
Values and Beliefes
Location of mine sites
What are the marketing implications of including CSR into the corporate strategy decision-making process?
Introduction of Corporate Social Responsibility
Determining other core competencies necessary to satisfy customer needs
Initiation of ambitious strategy
Differentiation Business Strategy
Value of superior product.
Strong emphasis on differentiating features
Features customers are willing to pay for.
Offer something different
Five Components of the New Strategy
Domains it plans to enter
Hay and Cattle Farming
Goals and Objectives
Return of investment
Strengthen corporate identity
Use current resources
Identification of sustainable advantage
high quality feed
reduction of grazing on local land
Stronger Synergy between current businesses practices
Effective use of water
Satisfy needs of customers
Relating back to sociocultural views
Continuous improvement needed
CSR intertwines into core business product
Many Strategic Business Units (SBU)
Porters Value Chain
Porters Five Forces of Competition.
Share knowledge base
Improve overall industries efficiency
Downsizing in industry
New technologies to stay ahead limited
Too much fodder
Training new staff
Different work safety expectation
RIO TINTO – global/national industry
access to mining resources
Capital availability is high
Human resources and knowledge base is evident
Resources are limited
Rio Tinto’s reputation is low
Industry reputation is bad
Use the Rio Tinto name to further sales
Association to a larger brand
Other businesses within the industry
Sustainable competitive advantage
Cost reduction/Profit Making
Relationships with stakeholders
Preferring Product with CSR characteristics
CSR only based strategy
No competitive advantage
More factors involved