Case Detail

Case Summary

BHP Billiton: Mining Potash

Case Number: 5-411-755, Year Published: 2012

HBS Number: KEL647

Request PreviewBuy

Authors: Thomas N. Hubbard; Michael J. Moore

Key Concepts

Competition, Competitive Strategy, Economics, Government Policy, International Business, Mergers and Acquisitions, Public Policy

Abstract

BHP, an Australian mining company, threatens to enter the potash mining industry through a hostile takeover of the Potash Corporation of Saskatchewan. Complicating matters is the fact that the Canadian potash industry has operated as a legal cartel in which the provincial government has a stake. This case enables students to assess BHP’s strategy in terms of value creation and value capture, how it relates to its existing investments in the industry, and the risks and rewards of alternatives to BHP’s strategy

Learning Objectives

  • How cartels help firms capture value in an industry and how the threat of entry can limit the cartel members’ ability to do so
  • How firms outside a cartel can capture value though a competitive threat
  • The range of strategies available to incumbents and potential entrants
  • The risk-reward trade-offs associated with these strategies
  • The trade-offs firms face with respect to making their strategies transparent, and how political economy issues affect these trade-offs

Number of Pages: 13

Extended Case Information

Teaching Areas: Strategy

Teaching Note Available: Yes

Geographic: Canada and Australia

Industry: Mining

Organization Name: BHP

Organization Size: Large

Decision Maker Position: CEO

Decision Maker Gender: Male

Year of Case: 2010