Grandbridge LTD: Business Environment Analysis Report

This business report provides a detailed analysis of Grandbridge LTD, an investment company operating in Australia, Europe, Asia, and the United States. The report covers the company's business environment, including its location, services, customers, and competitors. It also analyzes production ...Read More

Business study report

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
1) Introduction to the business and general business environment..............................................1
2) Production costs and scale ......................................................................................................2
3) Macro business environment...................................................................................................4
4) Sustainability practice of the business.....................................................................................5
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Business report analyse business issues and it gives different recommendations based on
this analysis. Present study is based on the company Grandbridge LTD founded in the year 2000
in North Perth, Australia(Grandbridge LTD, 2019). It is an investment company giving corporate
advisory services to different public and private listed companies. This business report will
include location of Grandbridge LTD and type of business it is going with. It will also include
different places where company sells and produces its products and services and also about the
main customers of Grandbridge LTD with there locations. There are many competitors of
Grandbridge LTD that are given in report with their location. Market share of the company and
its competitors are included in the report and different substitutes of business products of
Grandbridge LTD is also been included. Report further includes all the respective business
environment of Grandbridge LTD(Braouezec and Joliet, 2019). Report also analysed production
costs and scale of the business and further it describes the macro business environment in which
business operates. At the end report includes sustainability practices of the business and its
positive and negative externalities.
1) Introduction to the business and general business environment
Name, location and type of the business:- Grandbridge LTD is an investment company that is
publically listed in Australian Stock Exchange and was founded in the year 2000. Company is
located in North Perth, Australia. They provide services related to investment analysis, Estate
planning, Retirement planning and investment products. Company also provides personalized
services to small firms while drawing resources and financial strength of large one. They give
their clients flexibility to run their businesses in accordance with their respective needs.
Business produces and sells:- It is engaged in the development of products and services within
private and public equity markets in Australia, Europe, Asia and the United States. It also
provides corporate advisory services to a selected group of private and public listed companies.
Operating segments of Company includes Consulting services, investing and Corporate.
Company is also providing corporate advisory services to businesses that includes:- assisting
with corporate structuring, corporate recognition, strategic development and initial public
offerings (IPOs).
1

Main customers of Grandbridge LTD:- Main customers of Grandbridge LTD are different
business sectors like oil and gas, agriculture, technology and mining etc. All small and large
business take financial advice from Grandbridge LTD.
Location of most of the customers:- Most of the customers are located in Australia, Europe,
Asia and US markets.
Competitors:- Top competitors of Grandbridge LTD are Carlton Investments Limited, WAM
Capital Limited, Mirrabooka Investments, Milton corporation limited etc.
Competitors location:- Top competitors are located in Australian market and Europe.
From the above report it is been analysed that competitive environment in which
Grandbridge LTD operates is closer to perfect competition as there are large numbers of
producers and consumers that are competing with Grandbridge LTD(Azevedo and Gottlieb,
2017). Company is not only the supplier of these services as there are many other competitors
leading the market.
Figure:- 1
Company is having perfect competition in market that is it is having large number of buyers and
sellers in market and have homogeneity of its products in market. There is a perfect mobility of
the factors of production and goods and is having homogeneous products that is products and
services quality do not vary between the suppliers(Littlechild, 2018).
2
Illustration 1: perfect competition

Substitutes of product and services:- There are very few substitutes available for the products
and services that Grandbridge LTD operates. Few substitutes that are available in market are
produced by industries that are having low profit earning. There are few substitutes having high
quality of product and services but they are more expensive than what Grandbridge LTD is
offering. There are less chances that clients will switch to substitute products(Feimi, Kume and
Pulaj, 2016).
The cost of the product and services that company is offering is affordable to all the
customers as sales price per unit of the product and services that company is offering is approx
63 USD for standard products and 85 USD for Custom products. As there are less substitutes
available in market with respect to products and services offered by the company so demand
curve is inelastic as price change will have less effect on buying behaviour of the customers.
Company is having potential to set price above marginal cost as demand is more and substitutes
are less. This will add profit to the firm in short period of time and will bring chance for the
company to enter in new market.
Market share:-
3

Company had $612.67 thousand market cap and shares issued were approx 30.63 million.
The top 20 shareholders of GBA were holding 63.39% of share issue since past 10 years.
However, since five years company have stopped trading in Australian stock exchange.
2) Production costs and scale
Provide a description of the required factors of production, grouping them according to whether
the factors of production are:
The factors of production for any business are the basic inputs required in order to
achieve economic profit. The major factors of production include land, labor, capital and
entrepreneurship.
 Land: Land is an important factor of production because every company requires a place
to set their business. Especially, Grandbridge company that has spread their operations all
around the world therefore land is an essential factor for them(Rossi, 2015).
 Labor: Labor refers to the entire workforce from top level management to employees that
focus on the achievement of goals and objectives of the Grandbridge company. Every
business requires workforce to perform business activities and to generate innovative
ideas.
 Capital: Capital typically refers to the finance and the money involved in the business.
No business can survive and grow without the capital and it has potential to provide great
returns for any business.
 Entrepreneurship: Entrepreneurship is the concept of integrating all the factors and then
working accordingly in order to maximize the profits for the company. An Entrepreneur
is the leader of the company and is responsible for both success and failure of
organization(Braouezec and Joliet, 2019).
Comment on the likely overall cost structure of your business. For example: are fixed costs large
or small relative to variable costs? Does this mean that the firm’s ‘optimal’ size is likely to be
small, medium or large?
The cost structure of every company depends on its fixed and variable cost. Grandbridge
company's major fixed cost comprises of its assets like properties, plants and
equipment,employee salaries and rent whereas the variable cost includes administrative
expenses, wages, raw materials and packaging. Grandbridge company's fixed expenses outweigh
4

its variable expense thus it can be concluded that the optimal size of Grandbridge organization is
large because the company operates in a lot of places like Asia, Europe and Australia which
increases their overall fixed cost related to rent, salaries and other such expenses(Liu, Li and Li,
2019).
3) Macro business environment
Stability of the political system of Australia in which Grandbridge LTD operates:- The
government policies are changing on continuous bases, Company is required to have study on
these changes very closely(Feimi, Kume and Pulaj, 2016). There are changes in trade
regulations, labor and tax laws and not only this there are many legislative problems coming out
for the company to handle. As company is present in multiple market there is an increase in risk
related to political instability. The geo political risks have also been increased for the company
due to global political scenario development.
Inflation and its impact:- Inflation is strongly impacting the pricing structure of Grandbridge
LTD. There is an increase in inflation rate in Australian market that is it rose to 1.6%. That is the
reason company have to focus on the pricing structure(Klachkova, 2017).
Unemployment:- As unemployment is increasing in Australian market it is making labor docile
and is reducing business cost of Grandbridge LTD . As a result demand of business output also
decreases. Potential consumers do not have money to spend due to low wages and that results in
less sales and low profit of the business.
Interest rate:- Interest rate in Australia affects every individual's borrowing and investing
power. If rates are high than it would result in greater investment and this will result in more
growth of Grandbridge LTD(Eling and Schaper, 2017).
As Grandbridge LTD is operating in different countries, economic and political changes
may affect the growth of the organisation as import and export of survives depends on the
political stability of the country over the years. The trade barriers that host country is having that
will protect Grandbridge LTD but on the other side potential trade partners would harm by
preventing potential export. Economy is seem to be in a recession but Australia is managing to
avoid recession and bring opportunity for the investment companies.
Grandbridge LTD is exporting its product and services to other countries also and with
respective exchange rates:- For European countries like Germany the exchange rate is 1.60 that
5

is 1 Euro is equal to 1.60 Australian dollar. United States is having exchange rate of 1.45 that is 1
USD is equal to 1.45 Australian dollar(Risman and et.al., 2017). Exchange rate of these countries
impact profitability of Grandbridge LTD as company is engaged in international trade. The
stability in currency is also very important as not having stable currency may discourage the
international investors to invest for Grandbridge LTD.
The main products and services that company is offering to its customers is having good
quality and customers are generally happy with the services offered by Grandbridge LTD. If
recession is there then there are chances that demand from customers may get
reduced(Braouezec and Joliet, 2019). Economic climate of the countries also affects the business
sales of Grandbridge LTD as company is giving its services to many popular countries.
Company is having good image in market but if economic conditions are not suitable than clients
will not be able to invest money and this will result in lower sale of the business.
Business actually face problems in getting access to key factors of production. As
shortage of skills is seen due to increase in competition and market demand, Good financial
advisors are required for giving efficient services to the customers. If such employees are hired
from different part of the country then the employee demand high pay to work for Grandbridge
LTD(Rossi, 2015). In such situation company have to pay them there desired amount in order to
satisfy the customers and this increases there production cost. Now a days competition is
increasing as companies are coming with innovative technology that analyse the portfolio of
clients on its own. Grandbridge LTD have to come up with different technology that can bring
competitive advantage to the firm. In order to implement such tools and techniques operating
cost will increase.
If Grandbridge LTD is exporting its products and importing the labor for effective
business performance it will negatively affect the cost of business if exchange rate is high. As
company is exporting its services to different countries, transportation cost will be seen and
company is also importing good financial advisors or technology from other countries so hiring
such employees and taking such technology in business will also be costly for the company.
6

4) Sustainability practice of the business
a. The production process of the business generate any positive or negative externalities. If
negative, is the government put in place any measures to mitigate. The ways to mitigate by the
business and if positive the respective way to take advantages.
Grandbridge limited is a multinational investment company that provides funds to private
and public companies in Australia, Europe and Asia(Rossi, 2015). The company also provides
necessary consultancy and guidance to its clients and other listed startups and businesses. The
company has a huge impact on the overall environment and other parties.
Externalities are concerned with the positive or negative impacts on the third party after
the production or consumption of goods and services by a company. The production process of
Grandbridge ltd. Company has a positive impact on the society as the funds distributed and
allocated by the organization to other micro and medium companies increase their scope for
innovation, research and development so that they can provide better goods and services to the
society. This will further result in improved standard of living and better quality of life for the
people of the country.
There have been some negative externalities that have affected the general public and
society because the Grandbridge company provides investment and advisory services to startups
and some other manufacturing organizations which further leads to use of toxic chemicals in
their factory and thus causes harm to the environment(Schaltegger, Lüdeke-Freund and Hansen,
2016).
b. The consumption of the goods produced by the business generate any positive or negative
externalities. In case of negative, has the government put in place any measures to mitigate. Way
to mitigate by the business and If it is positive than what are its advantages.
The company provides investment and consultancy to other businesses thus these
organizations act as a consumer of their services therefore it has led to positive externalities like
providing investment and consultancy to other startups and businesses that helps them to grow
incessantly. Growth and development of an organization also generates more employment
opportunities which can further lead to economic development of the country. Moreover,
investment to these startups further help the companies in research and development and
identifying needs and wants and then solving the problems of the public by developing a new
product.
7

The consumption of goods and services by the general public and society can have an
adverse effect on them which is beyond their control like Grandbridge is listed on all the stock
exchange and sometimes the general public can face losses on purchasing their shares(Liu, Li
and Li, 2019). Thus it can have a negative impact on the third party which is beyond their
control.
CONCLUSION
From the above study it is been analysed that company is engaged in the development of
products and services within private and public equity markets in Australia, Europe, Asia and the
United States. Main customers of Grandbridge LTD are different business sectors like oil and
gas, agriculture, technology and mining etc. There are very few substitutes of products and
services that Grandbridge LTD is operating in. Company is having potential to set price above
marginal cost. Overall cost structure of the the company describes the required factors of
production. Report also concludes that political stability, inflation rate, exchange rate etc. affects
the business performance of Grandbridge LTD. As unemployment is increasing in Australian
market it is making labor docile and is reducing business cost of Grandbridge LTD. Report also
concludes that stability in currency is also very important as not having stable currency may
discourage the international investors to invest for Grandbridge LTD. At last report makes
conclusion that company is following sustainability practices that generates positive externalities
in the business and company consumption of the good produced by the business also generates
positive externalities.
8

REFERENCES
Books and Journals
Azevedo, E.M. and Gottlieb, D., 2017. Perfect competition in markets with adverse selection.
Econometrica. 85(1). pp.67-105.
Braouezec, Y. and Joliet, R., 2019. Time to invest in corporate social responsibility and the value
of CSR operations: The case of environmental externalities. Managerial and Decision
Economics. 40(5). pp.539-549.
Eling, M. and Schaper, P., 2017. Under pressure: how the business environment affects
productivity and efficiency of European life insurance companies. European Journal of
Operational Research. 258(3). pp.1082-1094.
Feimi, D., Kume, V. and Pulaj, E., 2016. Macro environment and innovation in service sector.
The evidence from Albanian context. European Journal of Sustainable Development. 5(2).
pp.137-142.
Klachkova, O.A., 2017. Modelling the Impact of Inflation on Economic Growth for Countries
with Different Levels of Economic Freedom. Economic Policy. 5. pp.22-41.
Littlechild, S., 2018. Regulation and the nature of competition. Journal of Air Transport
Management. 67, pp.211-223.
Liu, Y., Li, W. and Li, Y., 2019. Ambidexterity between low cost strategy and CSR strategy:
contingencies of competition and regulation. Asia Pacific Journal of Management, pp.1-28.
Risman, A. and et.al., 2017. Commodity Prices, Exchange Rates and Investment on Firm's Value
Mediated by Business Risk: A Case from Indonesian Stock Exchange. European Research
Studies. 20(3A). p.511.
Rossi, E., 2015. Modulating the sensitivity to syntactic factors in production: Evidence from
syntactic priming in agrammatism. Applied Psycholinguistics. 36(3). pp.639-669.
Schaltegger, S., Lüdeke-Freund, F. and Hansen, E.G., 2016. Business models for sustainability:
A co-evolutionary analysis of sustainable entrepreneurship, innovation, and transformation.
Organization & Environment. 29(3). pp.264-289.
ONLINE
Grandbridge LTD. 2019. [ONLINE]. Available. Through<http://grandbridge.com.au/>
Perfect competition. 2019. [ONLINE]. Available. Through<https://www.google.com/search?
q=perfect+competition+graphs&source=lnms&sa=X&ved=0ahUKEwiYkdmbitfkAhWFe30KHd
mnDTAQ_AUIDSgA&biw=1291&bih=612&dpr=1>
9