Contents

• Executive summary
• Introduction
• Strategy Analysis
• Objectives Mission and Vision
• Competitive Scenario
• SWOT Analysis
• Corporate Governance and Social Responsibility
• Financial Performance
• Conclusion
• References

Description

In this report, how far Rio Tinto Coal Australia has been successful in terms of its strategic, financial, market and corporate social responsibility performance is critically examined. The financial performance is analyzed in terms of the financial ratios and the share prices. The competitive scenario of Rio Tinto Coal is examined with the help of Porter’s five forces analysis. SWOT Analysis is done to examine the strengths, weaknesses, opportunities and threats of each company. The vision of the company is to become a international leader in the mining field, which is highly competitive and sustainably developed as well as performs well through innovation. Based on the objectives and strategy, it can be seen that sustainable development is one of the underlying principles of the company’s operation. All the Porters five forces act in favour of Rio Tinto Coal. Hence the competitive landscape for the company is good. The Rio Tinto has been selected as one of the top performers regarding the disclosure of corporate governance practices with an overall score of 62 percent by the ACCA. The company also identifies stakeholder engagement as one main step for success. All the environmental performance indicators started declining from 2006 to 2009 for the group. In spite of all the measures to improve the environmental performance, there are several criticisms against the group for which severe measures are needed. Social wellbeing indicators also are found to be declining. The financial performance showed strong performance for the group in the period of analysis. The group outperforms all the three market indices till mid 2008, then shows a decline and is slightly recovering from mid 2009 onwards. Thus it showed evidence for weak market efficiency also.
Though Rio Tinto has a highly effective corporate governance mechanism and a good financial performance, it is highly socially irresponsible creating environmental problems and health problems to the employees as well as surrounding community. Hence, the company cannot be considered as a successful company in terms of financial criteria but not in non-financial terms. Hence, it cannot be considered as completely successful based on the definitions of ethical investments. Moreover, it has failed to achieve the objective of sustainable development, which is one of its underlying principles for business. This is in spite of the significant measures performed by the group to improve its social and environmental performance. This needs to be seriously considered by the company.