Orica: Operating in the New Normal

Published 24 Jul 2017
Reference 6312
Topic Strategy
Industry Defense & Space
Region Global
Summary

In March 2015, Alberto Calderon was appointed Managing Director and CEO of Orica, the world’s largest provider of commercial explosives and innovative blasting systems to the mining, quarrying, oil, gas, and construction markets.
The company had been performing badly, with the stock price down and reported losses, even before the recent mining industry downturn. A major asset write-down was needed after the disappointing 2006 acquisition of the ground services business Minova. After cutting costs to restore profitability, Calderon determines that Orica must be strategically repositioned from the largest supplier to the “trusted partner of choice”.
The new positioning holds out some prospect of profitable growth, but simply announcing the intent will not make it happen. The CEO must convey the need to change as well as the rationale for the new positioning, which is so different from the past that new capabilities and new leaders are required. How can he achieve this transformation in the midst of a mining industry downturn when its steel-making customers have over a decade’s worth of excess capacity?

Teaching objectives

This case is designed to help participants appreciate the challenges of pursuing the strategic repositioning from supplier to partner, of getting management and employees to understand and embrace transformation, and determining and executing the key actions necessary to instil the capabilities and skills required to achieve the vision.

Keywords
  • Strategic transformation
  • Mining industry
  • Chemical industry
  • Cultural change
  • Restructuring
  • Leadership
  • Q41617