The Benefits Of The Single Market

1486 Words3 Pages

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

Open Document