Synopses of Barrick Gold

Essay by rlundayUniversity, Master'sA+, September 2011

download word file, 4 pages 0.0

Synoses of Barrick � PAGE �1�


Synoses of Barrick Gold Corporation

MMPBL/590 - Strategies for Competitive Advantage

University of Phoenix�

Synoses of Barrick Gold Corporation

Remote Environment: Economic Factors

Economics factors are integral to every element of a company because the primary goal of all businesses is to generate profits for shareholders. These are a portion of the remote environment along with the social, political, technological, and ecological factors. "Economic factors concern the nature and direction of the economy in which a firm operates" (Pearce & Robinson, 2004, p. 79).

Current universal economic environment is firing up great optimism about gold. Many investors are predicting that gold prices may double - or even triple - because of uncertainty in financial markets. In this particular environment, Barrick management prefers to take a more conservative approach and expects increases similar to those experienced over the past decade.

It believes that the fundamental trends are predictable even though unforeseen political and economic factors will undoubtedly cause short-term swings in the market. This opinion is based on the two most likely economic scenarios - a steady, universal recovery, or a sluggish and deteriorating global economy. Concerns about inflation in the first scenario will likely emerge increasing gold purchases; concerns about currencies in the second scenario will trigger the acquisition of the metal (Barrick Gold, 2010).

Gold has outperformed all major currencies - and virtually every other asset class as well - during the entire decade, and this is a very good reason to see further growth. The metal has traditionally been a refuge during economic despair, and investors turn to it preserve wealth (Barrick Gold, 2010).

Remote Environment: Ecological Factors

According to Pearce & Robinson (2004), "the most prominent factor in the remote environment is often the...