Product development and diversification on xstrata - Essay Example

Product development and diversification on Xstrata First Business d Product development and diversification on XstrataProduct Development Strategy of Xstrata:Xstrata has grown the Coal production capacity up to 20% from 2007 to 2011. In Peru, the Xstrata project had given the yield of 400000 tonnes of copper per year with significant by-products such as gold, molybdenum and silver since 2010. Coking coal product of Xstrata is another landmark of the company. Ferrochrome and Vanadium are other products of Xstrata for the last three years.

The Xstrata Plc. also mines platinum group metals such as platinum, Palladium, Rhodium for the last three years. Xstrata Plc. also mines the Zinc, Nickel, and Copper. Mined Copper and Zinc are the hallmark products of Xstrata, because copper demand has increased for the last many years. Copper is the base element for the equipment manufacturing. Xstrata also produces the Alloys such as Ferrochrome with optimum stock levels (Xstrata Plc. 2012).Diversification Strategy of Xstrata:Merger of the Glencore with Xstrata creates more value for the shareholders.

Xstrata is the strong mining company and Glencore represents the main commodity market company. Xstrata achieved a good business opportunity by merging the Glencore and become able to capture more value in the changing industry. Both companies took equal steps for this merger, and complimented the business opportunities. Value chain of commodities will be beneficial for Xstrata Glencore. Xstrata Glencore merger delivers the value for the shareholders for both short term and long term; Xstrata and Glencore are merged vertically with an aligned strategy (Xstrata Plc. 2011).ReferencesXstrata Plc. (2012). Interim Management statement and Q3 Production Report available http://www.xstrata.com/media/news/2010/10/19/0800CET/ Accessed on 26/02/2012.

Xstrata Plc. (2011). Merger with Glencore, available from http://www.xstrata.com/annualreport/2011/strategic-review/ceo-strategic-review/glencore-merger/ Accessed on 27/02/2013.