...substitution, Dicore has direct competition with the limited number of large drilling competitors in the southwestern United States region. Furthermore, smaller drilling companies who had sustained the barriers to enter the industry may become more competitive and impose a threat to Dicore in the future. Dicore has two types of customers: “majors” and “juniors”. Majors tend to have more bargaining power than juniors since these are large, internationally established mining companies. Majors tend to have more capital and resources and prefer to use the same drilling contractor for their exploration work throughout different regions. Boart Longyear, one of Dicore’s main supplier and major competitor, sells Dicore drills and drilling equipment. The power of suppliers should be low since in order for Dicore to rationally from its direct competitor, Boart Longyear must sell equipment at a lower price. The level of competition between competitors should be high, due to the decline of growth in the drilling industry and high fixed costs invested in capital infrastructures causing it difficult to leave the industry (Bremnar, 1). It is hard for Dicore to differentiate among competitors, thus these drilling companies can only compete against lowering prices. However, this impacts the drilling industry negatively, which could potentially affect Dicore’s profitability. ...
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...Summaries of Dicore International Case Study * Dicore, a leading global drilling services provider in mining and water projects, was one of the largest drilling service providers in the world, with a presence in 27 countries across five different continents. * The company’s expected equipment utilisation rates were sub-par, but senior vice president was optimistic about expansion in southwestern US. * Senior vice president had to outline the expansion strategy with risks and action to tackle risks. The Mining Industry * The profitability is highly dependent on considerably fluctuating mineral price. The macroeconomic (supply and demand) trends had impact on mining industry. The decisions of extend of investment rely on prices, which even lead to stopping mining certain materials. * In the US, gold (54% of spending) and copper (31% of spending) are more in exploration market. In Canada, gold (49%) and copper (2nd driver). * In 2012, total nonferrous exploration spending increased to $21.5b, when $17.25b increase in 2011. * Industry condition in 2013 was less favourable. Mining industry profits in 2012 fell to $68b (49% drop), leading to decreased industry-wide spending in 2013. Annual capital expenditure across the top 40 mining companies was projected to be $110b in 2013 (21% drop from 2012), resulting from fewer profits. Stock price dropped 20% in season 1 of 2013, when overall stock condition was very good that S&P 500 was up over 14%...
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...1. External Analysis In order to understand the environment of the mining industry and evaluate Dicore’s competitors and customers, this chapter will adopt some tools, such as PESTEL and Porter’s five forces, to analyze the external environment of Dicore International. 2.1. PESTEL Analysis The PESTEL framework is often used to analyze the broad macro-environment of an organization (Johnson et al, 2014). Thus, it is used in this chapter to identify how the trend of drilling industry can be affected by the political, economical, social, technological, ecological and legal factors. 2.2.1. Political Factors There were two bans on offshore drilling raised during 1980s in the United States, in response to the damage to environment (Hill, 2008). However, those two bans were lifted in 2008 for both political and economical reasons (ibid). This may have little impact on Dicore now, nevertheless, it shows the US government’s determination to protect domestic crude oil and nature gas and to avoid any environmental risks that associated with drilling. 2.2.2. Economical Factors Although Dicore recovered from the 2008 financial crisis and reached the peak of its stock price in 2012 for $5.12 per share (Bremner, 2014), the fluctuation of metal and gold price started in 2013 has deeply damaged the mining industry again, which resulted in a 49% drop of profit and 21% drop of capital expenditure industry-wide, and also led Dicore’s stock price fallen...
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...Introduction 1) Corporate background and its global peers The company Leighton Holding Ltd was founded by Mr. Stanley Ellis Leighton in 1949 and its headquarter is located in Sydney Australia; it is classified as a heavy construction company by Dow Jones Industry, Leighton holding’s main operating activities include: project construction, project management, property development and contract mining services. The diversified services were provided by different and independent operating companies owned by Leighton Holdings; those are companies such as Leighton Contractor, John Holland, Leighton Asia, India and Offshore, Thiess, Leighton Properties and Habtoor Leighton group. These independent operating companies provide diversified services from construction, development, contract mining, operation and maintenance service to the resources, infrastructure and property markets. Geographically, Leighton Holdings Ltd’s business operation covers over 20 countries in Australia, Asia, Gulf area and Southern Africa. On the global scale, Leighton Holdings is No.6 largest heavy construction company by sales in the world in 2012. Its total revenue reached USD 19587.3 millions with an employee team of 56000 people, the company is listed in Australian Stock exchange and stock code is LEI. 2) Corporate business model Diversification is the core of Leighton Holdings business model, the company is aiming to take on their core competencies to the targeted markets and deliver the project...
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...Learning with Cases INTRODUCTION The case study method of teaching used in management education is quite different from most of the methods of teaching used at the school and undergraduate course levels. Unlike traditional lecture-based teaching where student participation in the classroom is minimal, the case method is an active learning method, which requires participation and involvement from the student in the classroom. For students who have been exposed only to the traditional teaching methods, this calls for a major change in their approach to learning. This introduction is intended to provide students with some basic information about the case method, and guidelines about what they must do to gain the maximum benefit from the method. We begin by taking a brief look at what case studies are, and how they are used in the classroom. Then we discuss what the student needs to do to prepare for a class, and what she can expect during the case discussion. We also explain how student performance is evaluated in a case study based course. Finally, we describe the benefits a student of management can expect to gain through the use of the case method. WHAT IS A CASE STUDY? There is no universally accepted definition for a case study, and the case method means different things to different people. Consequently, all case studies are not structured similarly, and variations abound in terms of style, structure and approach. Case material ranges from small caselets (a few paragraphs...
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