Strategy of Barrack Gold Corporation

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Introduction

Company Profile

Barrack Gold Corporation was established in 1983 and has grown to be the leading global producer of gold. This is evidenced by its vast gold production and reserves as well as solid market capitalization. It has 26 operational mines and avows to maintain this by searching, acquiring, producing in addition to developing gold reserves safely, socially responsibly and profitably.

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Current Operations

Currently, it has two world-class gold mining projects almost ready for gold production in the Dominican Republic and Argentina. It also has a copper project under construction in Saudi Arabia. Other projects are located in Alaska (United States), Pakistan and Tanzania. The company is also involved in exploration of minerals in Nevada and Zambia (copper) (Barrick, 2012b).

Nonmarket Environment

Nonmarket Forces

Nonmarket forces comprise the political, social and legal measures that outline and structure interactions outside of the market environment but still working alongside it. These are interactions between the firm and various interest groups especially the public that do not occur as a result of existing market forces but by various public and private institutions. The nonmarket environment is characterized by the four I’s model (“The Non-Market Environment”, no year).

The Four I’s Model

Issues

This addresses potentially dangerous issues to the company. They include issues on severe health complications which have been worsened by sexual assault on local women by the company’s security guards in Tanzania and Papua New Guinea. Others include the harmful effects from gold mining with regards to cyanide use and mercury emissions which are lethal to human health. There have been allegations in Chile and Argentina about the company mining on and under glaciers. Lastly, mining is especially dangerous, what with dangerous chemicals and machines being used, which places employees in risky situations (Barrick, 2012c).

Interests

Existing governments, Protestbarrick and the nongovernmental organizations involved with the company serve to safeguard the overall wellbeing of the people. Conversely, it is acceptable that they may have ulterior motives against the company. The ‘people’ include company employees, the governments as well as the local communities who are adversely affected by the company’s operations.

Institutions

The various institutions involved with the company include the government which requires strict adherence to its laws. Other stakeholders include two non-governmental organizations known as Human Rights Watch and Foundation HELP as well as an online networking organization that called Protestbarrick.

Information

The senior management acknowledges these issues as they largely affect the relationships between the company and its external stakeholders. The company is made aware of the various issues although the senior management is the one focused on finding solutions to these issues.

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Integrated Strategy: Barrack Gold Corporation

Success levels and Market Position

The company has recorded low production costs in its projects and overall increases in revenues, reserves and resources from gold and copper. The company has also invested in high-return construction projects through its exploration efforts with much success (Barrick, 2012a).

Nonmarket environments

Importance

The outside markets form a large part of a company’s stakeholders especially consumers who avail vital information that can enable the company to grow. Therefore, maintaining favorable relationships with these groups becomes an important matter. This, Bach (2008) avows, can determine a company’s future in creating competitive advantage.

Strategies

With regards to the numerous issues that have beleaguered the company, it has instituted various measures under the banner of corporate social responsibility. The company has aggressively been involved in public relations to clarify the inflammatory remarks raised by the various nongovernmental organizations on the issues of criminal activities by the company personnel among others. The company has also formulated various internal controls to ensure the issues do not taint the company’s reputation. It has also endeavored to conduct comprehensive investigations regarding those issues taking appropriate measures on offenders. It has terminated many employees who have engaged in criminal activities. Besides, it has improved its security function in a bid to stem any violations by both the company and outside personnel.

The company has also collaborated with governments in ensuring the company adheres to set laws and regulations especially on environmental issues. It has also vowed to engage in responsible mining focused towards the safety of employees and the surrounding communities. A major strategy has been the company’s involvement in community projects such as providing education funds, infrastructure development such as electricity. Additionally it has created liaison centers to enhance communication with local communities. This has served to safeguard the company’s reputation as the market leader in gold production. (Barrick, 2012c).

Market environments

Strategies

According to Aggarwal (2001) creating a good strategy in the market environment involves assessing various factors such as the level of competition among established companies and risks posed by entry of potential competitors in the market. It is vital also to assess the bargaining powers of suppliers and buyers and the threat of substitutes. The company has adopted a strategy where it ventures into untapped areas where competition and associated risks is low.

The company has created a competitive team to oversee and deal with issues of suppliers where they evaluate the usage, price and value addition of a product and service. This enables it to have a wide base of able suppliers where they can choose only the best in terms of cost and quality. Internally, the company’s management structure which as been a motivator for employees to be committed to the company. In effect, this has lead to overall company’s success.

Success and Challenges

The company has effectively managed its challenges especially those from the nonmarket environment. To reiterate, the aggressive public relations and search for solutions to arising problems has enabled the company to retain its market position as the market leader.

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Conclusion and Recommendations

Summary

The company has managed to satisfy its various stakeholders on its ability to ensure that it does not exploit its relationship with its nonmarket environment. Its strategy in repositioning itself in areas where competition is low has led it to succeed in the market. The company should focus on improving its competitive advantage in both the market and nonmarket environment to maintain its current position.

By conducting periodic evaluation and updating company strategies, the company will be able to enhance and maintain its current market share further promoting growth. The company will be well-informed in implementing sound market and nonmarket strategies based on market research. This will also ensure it conducts comprehensive research on the industry inclusive of competitors and the impact of other market and nonmarket forces on the business.

The company’s success in the nonmarket environment is due to its strategy of corporate social responsibility projects. This is the same I would recommend to other company‘s in the gold mining industry (Dearlove and Crainer, 2007).

References

Aggarwal, V. K. (2001). Business and Politics: Corporate Market and Nonmarket Strategies in Asia: A Conceptual Framework. Volume 3, Issue 2, Article 2. Web.

Bach, D. (2008). Nonmarket Strategy: Winning Beyond the Market. Web.

Barrick, (2012a). Barrick Reports Q4 2011 Financial and Operating Results. Retrieved

Barrick, (2012b). Company Profile: Barrick. Web.

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Barrick, (2012c). News: Statement from Barrick Gold Corporation concerning the North Mara Mine, Tanzania. Web.

Dearlove and Crainer, (2007). David Bach on Nonmarket Strategy. Web.

The Non-Market Environment of Business”, (no year). Web.

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BusinessEssay. 2022. "Strategy of Barrack Gold Corporation." January 13, 2022. https://business-essay.com/strategy-of-barrack-gold-corporation/.

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