When the Single Market was created by the European Union in 1993, the United Kingdom, alongside its fellow member countries, were introduced to the four freedoms. These four freedoms are the movement of goods, services, people and capital without restriction between those countries who are members of the European union. However, with the result of the European referendum in the UK meaning we will in the near future be leaving the European Union, companies within the UK must now look at what this means for their business, not just financially, but also politically and socially. Strategic planning such as globalisation and industrialisation may be affected and the means by which a company trades and manufactures its goods could also change dramatically. …show more content…
The European Union is not the only organisation committed to free trade, with the UK already a member of The World Trade Organisation since its introduction in 1995. There are 164 member countries (WTO, 2016), compared to the European Union’s 28 members, meaning although the companies no longer have as stable a free trade with EU countries, there are still guidelines put in place by the WTO that these companies can benefit from. In fact, statistics from the Brexit economists show that free trade under WTO rules could lower consumer prices by an average of 8% (Financial Times, 2016.) Lower prices could mean more products being purchased, which is great for any companies five year strategical plan, as more business means more money. There are also other ways of selling their goods internationally. The internet is a huge commodity today, and companies all around the world are using it to sell into new markets, taking advantage also of its low costs (Baines, 2011.) Therefore, although a UK company such as Diageo may struggle to begin with post Brexit, the European Union is not the only option out there for the free movement of goods. Strategically, the company will need to make sure it assesses the economic impact …show more content…
In today’s economic society, it is all about transferring from an agricultural to industrial country. Developing countries such as India, where 60% of the population is agricultural (Morrison, 2011), are desperate to drum up the trade to become more industrialised. This is great for a UK company post BREXIT as it allows them to barter trade deals beneficial to them out with the EU in countries such as the BRICS. In 2012, Chinese company Huawei invested $2 billion in the UK, taking advantage of its ICT and world class research capability (Ernst and Young, 2013.) Therefore, in a UK companies five year plan post BREXIT, although free trade of goods is useful through the EU and stops domestically sourcing goods which can be a lot more expensive, the chance of international trade deals is not going to cease as there are many developing trade countries who will be willing to buy and sell goods in order to advance in the current trade market
Tesco is a UK based Supermarket Company which was founded in 1919 by Jack Cohen, since then it has grown to become a multinational company which specialises in a lot more than just groceries, this has improved the overall profit of the company. The overall employees recorded at the end of 2015 was 476,000+, this shows that is a source of employment for nearly half a million people in the UK. The supermarkets are no longer just in the UK they also have shops based in Malaysia, India and Poland, this presents that they are increasing the size of business to a multinational company and is also a good source of jobs for people in poorer countries. In the world over 75million people travels
In conclusion, the benefits of the UK’s membership in the EU outweigh the costs. The most significant benefit is the access they have to the single market as this has managed to benefit quite Access to single market is aiding this inward investment
...with the dollar. He also points out that joining the Euro will boost up the inflation rates within the country, as the European inflation rates are currently higher than those of Britain. As for jobs, Browne believes that joining the Euro would destroy British jobs and would repel foreign investors, as it would be a profound shock to the economy and decrease Britain’s effectiveness in the business world. It would no longer be the country that has both - access to the European market and a separate secure currency closely tied with the dollar. The government of Tony Blair has heard many forecasts that multinational corporations will seek business elsewhere if Britain does join the Euro. Even the simple costs of retraining personnel, buying new machines and accounting systems would impose a burden on small businesses in the UK when changing the national currency.
It is for sure that the UK and the other EU would be directly or indirectly affected by Brexit. According to a survey, it is found that many businesses in UK are already worried about the
To start with, what is the meaning of the Single Market? According to European Commission website, Single Market indicates the EU as one territory that has no internal borders or any other controlling complications that lead to the free movement of booth services and goods (The European Single Market - European Commission, 2017). According to the same source, single market has great benefits. It encourages competition and trade, increases efficiency, promotes quality, as well as helps in cutting the prices. In addition, the same source considers the European Single Market as one of the EU’s ultimate accomplishments that powered the economic growth and made the everyday life of European businesses and consumers easier (The European Single Market - European Commission, 2017).
It is well known that after World War II, states began to move away from the trends of nationalism that had brought on conflict in the first place. Across large parts of Europe, there is instead great support for federalism and get support for integration and interdependence. In 1952, the European Coal and Steel Community was created, followed by the establishment of European Economic Community in 1957. With allies being made and different treaties and agreements being signed, Europe was definitely becoming a ‘federation’. In 1973, Britain joins the EEC along with Denmark and Ireland. The European Union is then formally established by the Maastricht in 1993 and gains its 28th member, Croatia by July 2013. When a referendum was taken in the UK regarding joining the EU the vote was two-to-one in favour. The benefits of joining of the EU were clear. The UK would benefit not only in an economic sense but also politically and socially. However, in recent times, opinions have changed. There is now debate as to whether the UK should remain n member of the EU. More and more people are speaking in favour of the United Kingdom leaving the EU and standing on its own. While there are persuasive arguments for and against, it could still be argued that the argument against...
It's a politically motivated defensive measure. In the short run, it works. But it is very destructive in the long term. The supporters of Brexit have made various numbers of claims arguing that in the field of trade, the UK will benefit from its new ability to set its own agenda and choose its own trade partners. Some agree that Britain may indeed gain by not being a member of the EU. However, due to the post-exit arrangements, some are distressed because they see it as a disadvantage. The United Kingdom, been a part of the EU has access to third countries with which the EU has signed trade agreements. These include Mexico, Chile, Algeria, South Africa, Turkey etc. Britain, been part of the UK is able to trade with those countries only through the EU. In other words, Britain’s decision to exit the EU not only abandons trade arrangements that cover more than 60% of its trade but also impacts them tremendously. However, Brexiters have argued, without elaborating on how and what they will improve on existing bilateral agreements. It is will be interesting to see how this can be
One of the major advantages of globalisation to LEDC’s is that trade barriers are significantly lowered or removed completely. This promotes and encourages exports to new countries because before LEDC’s simply could not afford to export their goods to major countries such as USA or UK due to high import taxes they have set, so it was simply not worth it. But with free access to new markets LEDC’s have access to a much greater customer base and that should, in theory, significantly boost economic growth. Empiri...
First of all, encouragement of free trading blocks. As stated by Lynch (2003) government is highly interested in promotion of easier trade in order to benefit from globalization. So the expansion of European Union presented many opportunities for Tesco's international plans. A good example would be the acceptance of 10 new countries of Western and Eastern Europe in 2004 (BBC,2009). This allowed easier access to new markets with relatively law competition and high growth potential which is exactly what the company was looking for in foreign markets.
This challenge is seen as a threat which could cause major damage to the UK economy so in order to minimise the risk, weaknesses need to be analysed and reduced. Financial Services are an essential part of the UK economy and the vote to leave the EU has a number of substantial consequences associated with financial services sector. As London is capital of Europe’s financial system with a surplus in financial services of £63bm in 2015, there is major concerns associated with Brexit (Irwin, 2016). Financial centres within London may relocate and this will have a negative effect of the economy. If the UK loses passport rights large financial organisations may decide to relocate (Protts, 2016). Pass-porting allows UK banks etc. the opportunity to operate in other EU countries, however Brexit may impact these rights which may result in London losing its title of finical capital. This is a challenge for managers and the organisation as the structure and systems within organisations will need to change.
• Support to a further 32,000 UK firms to export through UK Trade and Investment
Being part of the EU ensures that each member has free trade between all its member states. This is a great advantage for the UK and its businesses because it leaves them with no worry about import taxes or quotas. One of the main benefits of the European union is that it’s our main trading partner ,and membership of the EU has helped reduced both tariff and non- tariff barriers. According to sources, Half of the UK’s exports go to the EU (Shattock, 2013). As their main trading partner .If the UK was to leave the EU , it would be faced with the iron tariff wall that non-members face. This would destroy Britain’s Aggregate demand tremendously. Leaving the EU, could put the UK in jeopardy as it is an important aspect of the economy. Euro sceptics and the UKIP believe that even if we leave the EU, the UK’s free trade agreements can still be maintained due to the fact that countries such as Switzerland and Norway haven’t been excluded from EU agreements (Pettinger, 2013). However, it could be argued that France, Germany among with the rest of the main EU leading nations would never allow Britain a "pick and mix" approach to the bloc's rules (Peter, 2013) They also argued that Britain should rely on the membership of the World Trade Organisation to give access to markets. But, although the World trade organisation has indeed made a lot of progress with trade, it hasn’t secured free trade in manufacturing or services which do account for mostly all of the UK’s GDP. Also, if the UK left the EU, Britain would be opening up their markets to some of the world’s biggest economies such as China or Japan, more than they would open up theirs to Britain. This means, that Britain would be a minor under all these large economies a...
First, the structure of the framework strongly supports an extensive analysis of the directive and of the context in which it was formulated and implemented. Second, each element is important when trying to clarify how a policy is created in the European Union and the impact of the policy on businesses. The 'issue' element provides an opportunity to explain the content of the directive. The 'actors', 'interests','arenas' and 'assets' elements describe and illustrate the power play involved in European Union policy formulation and implementation and the place occupied by businesses. The 'information' element demonstrates the ever increasing importance that knowledge has within the European Union and how it can be used by businesses. Finally, the design of a non-market strategy supported by the (IA)3 framework enables a firm to become active and not only adapt to a certain policy but also gain an opportunity to influence the environment within which it is
Political: following the European free trade Agreements, the market has opened up for British companies to invest in Asia. Tesco already has a dozen of stores in Asia. Tesco also need to give each employee the right and teach employees about anti-discrimination law. Failed to do this Tesco will be prosecuted and fined.
The United Kingdom was a member of the European Union. The European Union is an example of the second most integrated arrangement, the economic union. Therefore, voting to leave is a direct effort to reverse regional economic integration.