Business Environment and Sustainability Practices of Brambles Limited

Running head: ECONOMICS
ECONOMICS
Name of the Student
Name of the University
Author’s Note

1ECONOMICS
Table of Contents
Introduction to the business and general business environment......................................................2
Production cost and scale.................................................................................................................4
Macro Business environment..........................................................................................................4
Sustainability practice of the business.............................................................................................9
Conclusion.....................................................................................................................................13
References......................................................................................................................................14

2ECONOMICS
Introduction to the business and general business environment
The purpose of this report is to provide overall description of the business and the
competitive business environment in which it operates. The company selected for this present
report is Brambles Limited. Brambles Limited is the holding organization of Brambles Group
and is an Australian Securities Exchange (ASX) listed company. Brambles limited is one of the
biggest provider of the supply chain logistics group that is based on pooling unit- load equipment
as well as other associated services (Christopher, 2016)This enterprise basically focuses on
outsourced management of crates, containers and pallets. This organization is located in Sydney,
Australia and is a kind of commercial &professional service business. This enterprise basically
serves customers in fast- moving consumer products, beverage, fresh produce and other
manufacturing industries, thereby counting numerous globe’s best brands among its consumers.
Most of its customers are located in the Sydney but they also provide service to the customers
across the globe through its website (Brambles, 2018). The business unit of Brambles is mainly
focused on enhancing customer’s engagement as well as measuring customer’s satisfaction level
in order to assure that its customer’s relationship continues to provide them competitive
advantage.
Some of the major competitors of Brambles Limited are Iron Mountain Incorporated,
ALGECO, Greystone Logistics Inc and so on. Iron Mountain Incorporated is an information and
storage management service companies that is located in Boston, USA (Brambles, 2018 ).
Algeco is the modular construction supplier and also manufactures modular structures and is
headquartered in France. Greystone Logistics Inc manufactures as well as retails plastic pallets
for different commercial applications and is headquartered in USA. All these competitors are

3ECONOMICS
more or less manufacturing similar products but are not serving similar customer base. The
competitive business environment in which this company operates is likely to be closer to
monopoly market structure. Monopoly refers to the market structure that is featured by single
seller selling unique goods in the market. In this type of market structure, the seller usually faces
no competition and is the sole retailer of products having no close substitute. The cost of
products of Brambles limited such as pallets, crates, containers are higher relative to average
income of the customers.
Since this company sells its products to the customers across the globe, it becomes
difficult for them to sell their high cost products to all customers. The demand curve facing the
firm is likely to be relatively inelastic. The price elasticity of demand curve that faces the firm
operating in the monopoly market determines whether marginal revenue attained by monopolist
is negative(inelastic demand) and positive(elastic demand) (Baumol & Blinder, 2015). This
relation is vital for profit maximizing manufacturing decision which involves equality between
marginal cost and marginal revenue. Since the products of this enterprise do not have such close
substitutes, the demand for the product does not vary much owing to change in product price.
However, this enterprise does not have elastic demand curve and thus is steeply sloping or
inelastic.
Mark up rule relates to the practice of pricing of a manufacturer with the market power in
which the organization charges fixed mark up over the marginal cost. A firm having market
powers do not choose the point on inelastic section of demand curve (Mankiw, 2014). As the
demand curve facing the monopoly firm is relatively inelastic, the mark up will be larger than
relatively elastic demand curve. This is shown in the diagram below: