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Fortescue Metal Group Ltd

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Accountant-Lecturer
Level
General public
Study
finance
School/University
California

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documents in English
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case study
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3 pages
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  1. Introduction
  2. Macro environment factors
  3. Industrial factors
  4. Firm-level factors
  5. Conclusion

The variation in the share price and the sales volume results from diverse factors within the business environment. The internal and external environment of a business effects its business operations. In the external environment, there are micro and macro factors affecting the business operations. These macro factors include the political, legal, social-cultural, economic, and technological forces that affect business operations. Macro environmental factors affect business operations because they are external inevitable factors.

The macro factors are beyond the direct influence and control of the organization. FORTESCUE Metal Group Ltd completed a port expansion project, which cost the company 2.4 billion US dollars. This project has contributed toward the increase in revenues for the business (Harper, 2013).
Technology is a macro environment factor that has affected the sales volume and the share price of FORTESCUE Metal Group Ltd. The company adopts the latest level of technology henceforth assuring its stakeholders of increased sales revenues. Many investment companies and individuals have purchased shares in the company since the company performs well in the S&P/ASX50 share index. This results to the upward trend in the revenues and the sales volume. On August 16, 2013, FORTESCUE Metal Group Ltd joined ventures with Famossa Ltd and spent 1.15 US Dollars in the venture. The joint project is anticipated to expand the company's operations and consequently increase the sales volume in the next period.

[...] Technology is a macro environment factor that has affected the sales volume and the share price of FORTESCUE Metal Group Ltd. The company adopts the latest level of technology henceforth assuring its stakeholders of increased sales revenues. Many investment companies and individuals have purchased shares in the company since the company performs well in the S&P/ASX50 share index. This results to the upward trend in the revenues and the sales volume. On August FORTESCUE Metal Group Ltd joined ventures with Famossa Ltd and spent 1.15 US Dollars in the venture. [...]


[...] On constitutional grounds, FORTESCUE Metal Group Ltd convinced the high court that the rent tax be abolished. Following this appeal, the company received incentives from the government aimed at promoting and encouraging mining as par the provisions of section 91 of the Constitution (Davidson, 2013). Economic factors are part of the external environment that affects business operations. The mining industry is among those global economic pillars not affected by factors such as interest rates. Most governments have provisions in the constitutions to support mining. [...]


[...] FORTESCUE Metal Group Ltd. ASX Announcement, 2-24. Harper, D. (2013, July 13). FMG INC. Retrieved August from World Wide Web: http://www.fmgl.com.au/about_fortescue Jones, D. (2013, July 1). Retrieved August from World Wide Web: http://online.wsj.com/article/SB100014241278873236655045790281626910317 56.html?mod=WSJ_qtoverview_wsjlatest Stainer, P. O. (2006). Economics . New York: Harper & Row. [...]

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