Brambles Company Profile - Case Study Example

Brambles Company Profile Name Institution Course Lecturer Date BRAMBLES LIMITED COMPANY PROFILE Executive summary Brambles limited has its history traced in the 18th century when it was started as a butchery business by the then Walter Bramble. During this period, the business began to grow gradually which prompted Walter to register it as Bramble &sons limited and the same time other operations like transport and logistics were included. Though the growth was quit gradual, its vision was to become one of the best pallet pooling companies worldwide and hence in the mid-19th century, it purchased CHEP from the Australian Government and at the same time it moved its headquarters to Sydney. By this period Brambles Company was growing to a group of companies and hence it was changed to Brambles Industries Limited. (Jarillo & Martíanez, 1990) New sectors have been discovered during this period through their ‘2former businesses. For instance, through its Cleanaway business, waste management sector were discovered which has remained to be the most effective way of waste management in Australia, America, Europe among other countries until 2006 when clean away Australia and its Brambles industries limited was sold to kahlberg Kravis Robert Cleanaway UK was sold to Veolia of France. Record Management sector emerged through recall business which together with CHEP and pallet pooling business has remained the core operations of the Brambles limited. These sectors have shown a rapid growth in most countries served by this company. Bramble Company as it will be discussed in this report it is now among the world’s largest corporations that have been spotted to perform very well in the market. This can be proofed through the company’s financial report. The consistence in its earnings indicate that the company has gradually been raising or improving in terms of profitability as well as globalization. Table of Contents Executive summary 2 Table of Contents 4 Introduction 5 Company overview 5 Company’s location 6 History 7 Company’s outlook 8 Administration 9 COMPANY’S ORGANIZATION AND STRUCTURE 9 Ownership overview 9 Holding Company 10 Positioning in the market 10 Prime subordinates 12 Corporate Annexations 12 Technological application 13 FINANCIAL PROFILE 14 Profit and Loss Account 14 PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 14 Balance Sheet 16 Audit report for the company 17 Business Community Perception 18 REFERENCE 21 Introduction Brambles is a group of companies that are spread worldwide with Brambles limited being the holding company that controls all the managerial operations of the entire Brambles group of companies. Brambles Limited has over 55% voting stock on all its subsidiaries that gives it a strong managerial power over its subsidiaries. The company operates globally in more than 50 countries. It mainly deals with pooling of unit-load equipment and other related services and focuses on crates pallets and containers which are outsourced from other organizations. (Webb, 2011) In this profile we will discuss the various components of the company including the corporate and the management composition of the company as outlined by its directors. Moreover the report will also discuss the SWOT analysis of the company as well as well as the company’s relation with the community. Most importantly the company’s market segment as well as the brand positioning will also be discussed so as to determine how the company is able to keep with the global competition in providing its products and services. (Fukui & Takano, 1998) Company overview The company operates globally in more than 50 countries. It mainly deals with pooling of unit-load equipment and other related services and focuses on crates pallets and containers which are outsourced from other organizations. The company has primarily specialized in CHEP and IFCO brands. CHEP and IFCO are companies on its own each specializing on its own line of operation. For instance CHEP specialises on providing logistics services, reusable crates, containers and pallets. CHEP has a relatively large market of about 50 countries worldwide where it owns and manages about 300 million containers, pallets and crates. IFCO takes right after CHEP with about 150 reusable plastics crates and through is pallet management network, IFCO is able to reissue and repair about 200 million pallets in a period of one year. (Ng & Tai, 1994) Brambles limited has a unique strategy in which it carries out business. It has a pallet which normally serves clients in at least three major regions in multiple supply chains in these regions. Normally the regions include Asia Pacific, Americas and regions of Africa. During its business operations, it engages the reusable plastic crates for only one purpose which is to serve the sectors that deals with fresh produce in regions of South Africa, Australia and New Zealand among others. When dealing with bulk goods and automotive, the company uses containers because they are the best solution to these as they are safe and would rarely corrode with the most reactive commodities like chemicals. This approach of doing business at brambles limited makes it one of the most popular supply chain companies worldwide. Company’s location Brambles limited has its headquarters in Australia, Sydney from which it oversees the operations of the other branches that are found in about 50 countries worldwide. Brambles limited is mostly traced in the most prestigious places mostly the capital cities of these 50 countries. This aspect makes it easy for it to serve its clients more effectively and also it is easy to attract more customers. History Brambles limited has its history traced in the 18th century when it was started as a butchery business by the then Walter Bramble. During this period, the business began to grow gradually which prompted Walter to register it as Bramble &sons limited and the same time other operations like transport and logistics were included. Though the growth was quit gradual, its vision was to become one of the best pallet pooling companies worldwide and hence in the mid-19th century, it purchased CHEP from the Australian Government and at the same time it moved its headquarters to Sydney. By this period Brambles Company was growing to a group of companies and hence it was changed to Brambles Industries Limited. New sectors were discovered during this period through their former businesses. For instance, through its Cleanaway business, waste management sector were discovered which has remained to be the most effective way of waste management in Australia, America, Europe among other countries until 2006 when clean away Australia and its Brambles industries limited was sold to kahlberg Kravis Robert Cleanaway UK was sold to Veolia of France. Record Management sector emerged through recall business which together with CHEP and pallet pooling business has remained the core operations of the Brambles limited. These sectors have shown a rapid growth in most countries served by this company. (Davis, Bagozzi & Warshaw, 1989) This disinvestment was to make its operations more effective and efficient and at the same time giving quality services to all its stakeholders. To make this possible a single entity was created from its Australia and British entities. With time Brambles limited has zeroed in to provision of pooling solutions which is as a result of Recall holdings Limited taking ownership of Recall information management business. Company’s outlook The Goal of Brambles limited is to the best in all its operations and in relation with its customers it aims at making sure that its customers are fully satisfied with its services and compared to other services provided by different companies, the customers will feel that Brambles’ is the best. Despite the fact that the company is in the market to make profit, it aims at providing a value that is equivalent to the prices charged. It provides a platform that is convenient for the customers to do business together with it to work together towards a mutual objective. Brambles limited is constantly involving itself with its customers so that it can learn new ventures and new grounds to provide more services to them. With this commitment and capacity to respond to customers’ needs positively, Brambles has been able to expand their services to an international scale. Brambles limited is a unique company. Its values are not diverse as it is the case with its services, geographical locations and cultures. Those in the local and international subsidiaries share similar values with those in the holding company. Due to this aspect, the company is able to provide services that adequately meet the customers’ needs globally. Its customers are in that case able to and willing to be served by the company from where it is convenient to them since the values are the same everywhere.it is a strategy that has increased the company’s sales at a high rate. Administration Since 20th century, Brambles limited has had an executive management system which has shown tremendous effort in making Brambles limited position itself in the Australian Exchange market. The company has a list of Board of Directors and the executive leadership team which is headed by the CEO, Tom Gorman who has been the CEO since November 1, 2009. Since then, He has been the manager and the executor of the company’s operations. He presides over the day-to-day operations of the company to make sure every operation is in line with the set objectives and ensure equipment are readily available where needed .Graham Kraehe who is Australian Based has served the company as the Chairman of the Board. He has been working closely with the CEO to ensure that all the requirements as decided upon by the Board are well coordinated. (Davis, Bagozzi & Warshaw, 1989) COMPANY’S ORGANIZATION AND STRUCTURE Ownership overview At Brambles limited the summary Data of its ownership is normally calculated on daily basis using the most recent information to ensure the information given is more reliable to evaluate the performance of the company. Normally its ownership overview provides a particular stock activity and an illustration of institutional holdings. These institutional holdings usually show different terms related to their mode of operation. For instance, if the holders have sold out their positions they, cannot be included in the total number of Holders, only those that have retained their positions have the right to be included here. In relation to this, different terms apply to different institutional holdings. If the number of buyers is to be realized, in that case during the change of shares the resultant must be greater than zero and if it is less than zero, then that’s where the number of sellers are realized. (Jensen, 1988) Holding Company Brambles is a group of companies that are spread worldwide with Brambles limited being the holding company that controls all the managerial operations of the entire Brambles group of companies. Brambles Limited has over 55% voting stock on all its subsidiaries that gives it a strong managerial power over its subsidiaries. The subsidiaries do not have full right to make decisions on their own but rather decision making at Brambles group of companies are centralized especially when major decisions like disinvestment, demergers or mergers are involved. (Jensen, 1986) Positioning in the market Brambles has a perfect competitive position and a scale of its kind as investigated by Lewis who acts as the lead Analyst for the Brambles Company. Brambles limited is known to hold a highest position in the Fast Moving Customer Goods in the chain of supply globally. This company has strong financial profile which gives it a powerful competitive ability CHEP being one of its major operating businesses has rated the best in networking of containers and pallets. This business keeps Brambles at a higher scale as its difficult to wipe out such a business ones it is established in the market. Since Brambles took its place in the market in the early 90s, it has not been easy for other companies to displace it in the market hence it has been able to retain its big market share. To facilitate this, Brambles ensures that it grows with technology to ensure its services are up to date and make their products better and ensure that systems of the similar complexity that come up later do not displace it in the market. Brambles has a very reliable cash flow that enables it to maintain a stable and steady liquidity platform. The rating of the company is likely to remain high if it retains high competitive position, high earnings and its high revenue profile. To be able to position Brambles rating, the competitive power if the company is highly evaluated as compared to other industries that has a similar operation in the industry. Financial risk and its capital organization are also used widely to determine the rating of the company (De Clercq & Sapienza, 2006). It dictates the position of the company in the market in the next couple of years as compared to its competitor. With this the analysts are able to advice the company to retain its mode of operation or to change. Brambles limited has a high tolerance to risk and commendable management’s track records that counts greatly to its high rating in the market. Among other companies that are in the same industry brambles limited has been rated the best pallet and container pooling supply chain solutions globally. This activity is credited to CHEP which has continually lead in this service provision. Since Brambles limited began, there has not been any other company which has been rated global leader of pallet and container pooling supply chains (Nysveen & Pedersen, 2004). Brambles has retained its position in the Australian Stock Exchange highlighted as one of the best companies with the highest level of assets of around 5.1 billion US dollars in which each and every there has been a net profit of about 10 billion US dollars. Brambles limited is one of the ten Holding companies that have the most favourite Brands. It has retained about 95% of its customers who joined in its early 90s to this day among others who have continually joined (Curran & Pluta, 2008). They have expressed full satisfaction making Brambles limited one of the best ten companies globally. Prime subordinates Brambles limited is made up of two major subsidiaries. CHEP which mainly deals with Cleanaway business has remained to be the principal line of the Brambles operations in the local and international industries. Another subsidiary is the Recall business which has dominated the Record management business, now working as a holding on its own after the demerger from the Brambles limited. Despite the high rating and high positioning in the market, there has also been still competition from many other companies worldwide (Prospectus, 2008). For instance ABB Limited and Allied Waste industries has shown tremendous efforts to catch up with the Brambles company.it has employed the modern methods of operation to make their operation effective and efficient. Their aim is to improve the value of their products, increase productivity while reducing costs. For Brambles limited to outdo this kind of competition, it has to effectively incorporate technology in all its operations to make its productivity more cost effective. (Allen, 1984) Corporate Annexations Brambles limited has implemented some changes in their operations. On December 2013, there was need to demerge the call business since the Recall holdings limited would operate on it in a more effective way. Today the Recall business operates as an independent company registered as Recall Holdings limited. Recall Holdings no longer appears n the stock exchange market as one of the Brambles group of company. During the process of demerging, the shareholders who were involved in it, were allowed one share in the Recall Holdings for every five shares that were held in Bramble Holdings. The shares were counted as from 16th December 2013.Thre are some stakeholders of Brambles Company that had no shares at all and therefore when the demerger happened ,they were given the department of sales as sales agent. The shares that were sold to the stakeholders were later taken to Australian Securities exchange that in return it earned then some proceeds which were shared to them on 24th January 2014 in the ratio of their shares (Le Nadant & Perdreau, 2006). After this demerge, Brambles limited was left to dominantly work on the pallet, crates and container pooling solutions business. It has been able to work effectively under CHEP and IFCO in more than 50 countries. This demerge has helped Brambles limited to increase its production because it has a relatively fewer areas of concentration hence making their services more quality. Technological application Brambles limited is one of the best companies that has a commendable use of technology in its operations. It incorporates internet in advertising its services and gives option for its customers to order for services online. This enables the company to reach a large number of customers at a lower cost.in the internal operations of the company, there are no more uses of manual way of production as it has proofed less cost effective and its produce is of very low quality scaring away its customers (Rao, Waters & Payne, 1995). Technology application at Brambles limited has made the management easy and also easy networking especially with all the branches worldwide. FINANCIAL PROFILE Profit and Loss Account Brambles limited financial year ends as at 30th June every year. For the year 2013 the profit and loss account showed that during this year the company has made a profit of 9.5 billion dollars which represents 8.6%.This is an increase from the previous financial year where the net profit listed at 0.9 billion dollars (7.9%).This is a reflection of how the operations were carried out as at 30th June 2013. BRAMBLES LIMITED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 30TH JUNE 2013 Total revenue $ 12,000,000 100% Less Cost of Goods Sold $ 526,200 42.6% Gross Profit $ 773,800 57.4% Less Expenses Accounting and legal fees $ 51,700 Advertising $ 25,000 Depreciation $ 58,000 Electricity $ 4,700 Insurance $ 65,200 Interest and bank charges $ 37,300 Printing and stationery $ 89700 Rent for premises $ 84,300 Repairs and maintenance $ 41,100 Training $ 7,900 K8 Vehicle operating costs $ 40,000 Wages and salaries $ 523,500 Workers compensation $ 8,500 All other expenses ­­­­­­­­­­­­­_______ $ 34,100 Less Total Expenses $ 688,300 48.8% Equals Net Profit $ 95,500 8.6% Balance Sheet The balance sheet extracted from the profit and loss account highlights the total number of Assets owned by Brambles Company as at 30th June 2013.At this date the company’s capital was summarised 6.6 billion Dollars. The figure 1.1 shows a complete summary of the company’s balance sheet. BRAMBLES LIMITED BALANCE SHEET AS AT 30TH JUNE 2013 ASSETS Current Assets Cash $ 2,880,000 Accounts receivable $ 2,215,000 Inventory $ 33,150,000 Total Current Assets $ 106,185,000 Non-Current Assets Plant and equipment $ 455,350,000 Business premises $ 66,650,000 Vehicles $ 776,570,000 Total Non-Current Assets $ 45,678,770,000 TOTAL ASSETS $ 46,987, 955,000 Current Liabilities Tax liability $ 70,000 Total Current Liabilities $ 70,000 Non-Current Liabilities Long term business loan $ 6,450,000 Total Non-Current Liabilities $ 78,500,000 TOTAL LIABILITIES $ 102,570,000 NET ASSETS $ 45,927,385,000 OWNERS EQUITY $ 6,623,385,000 Audit report for the company Brambles ensures that all the required instruments for its operations are available in order to avoid any risk that may arise during the business. For instance the containers, pellets and other logistics services are always maintained in good conditions so that the company runs without any miss up. Moreover the company keeps an eye on the competition posed by other related companies so as to ensure that it is aware of its strengths and weaknesses. Through a SWOT analysis the company is able to identify various opportunities, threats as well as weaknesses that exist in the economy thus ability to cope with the competition strategies employed by other firms. Some of the strengths of Brambles Company is the ability to increase its market share by globalising its operations. Brambles operates in more than 50 countries where in each of country the company has been able to win quite a big percentage of loyal customers. The market segments of Brambles are also well defined making it easy for the management to improve its marketing strategies depending on the type of the consumers within any one given segment. The company has also been able to conduct advisement of its products in a manner that they are accepted in different geographical areas in the world. The major weakness that affects the progress of the company is the inability to uphold the loyalty of the consumers in countries where there are other firms that offers similar or closely related services or products. This has been a major problem to the company since it requires a continuous improvement of the company’s brand position. Moreover, this requires the company to always be updated about the new trends and dynamics taking place in the market. However apart from the strengths and the weaknesses the company through its intensive research it has been able to identify several opportunities that it can embark on and increase its profit margin. Such opportunities include reaching out to consumers who need the company’s services though they are in remote places. The company expects that by venturing in such remote areas it will be able to increase its market share. Business Community Perception This refers to the opinions of the consumers and other external participants in the market concerning the company’s products and services. The community perception on the company’s products and services determines the size of the company’s market share. The brand positioning is the main determinant for the type of perception that the community poses. Brand positioning refers to the features that make the product to stand out among other firms in the market. For a product to compete globally it has to ensure that it puts into consideration the type of the product features that its products has. For instance if the product has features that are pleasing to many, not only locally but also globally then it means that the consumers opinion is positive towards the product. (Rimmer & Taylor, 1985) Brambles has been able to obtain a good reputation in its areas of operations thus increasing its market share. The company offers services that are well specialized so as to ensure that it is able to reach to its specific market segment. Moreover motivated by the good social responsibility activities conducted by the company to the society, more consumers are encouraged to give the company a good reputation. Generally the communities where Bramble group of companies operate in has been of great significance in the companies performance.it has enabled the company to improve the quality of its services through their response. Also, it has provided a more efficient way of production in the company by providing labourers who have the relevant skills to work with Brambles group of companies. Brambles limited has the plans of increasing its labour and therefore the community has shown great efforts to work with this company by advising youths to take courses that are related to the operations at Brambles limited. With the knowledge of Brambles future plans of education its business community on environmental health; this community has embraced it so positively by providing peaceful environment that enhances its immense growth. However the idea of integrating CHEP and IFCO has not been fully embraced by the society as most of the employees will end up being laid off. The society has appealed to the company to at least come up with other departments that are going to accommodate those that shall be laid off during the integration. (Graswell, 1992) REFERENCE Allen, T. J. (1984). Managing the flow of technology: Technology transfer and the dissemination of technological information within the R&D organization. MIT Press Books, 1. Curran, I., & Pluta, S. (2008). Overview of machine to machine and telematics. Davis, F. D., Bagozzi, R. P., & Warshaw, P. R. (1989). User acceptance of computer technology: a comparison of two theoretical models. Management science, 35(8), 982-1003. 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