Impact Of Brexit On UK’s Global Economy And Business Opportunities

Negotiation Strategies and Government Approaches

Discuss about the impact of Brexit over the Organization in the UK.

UK elected to depart from European Union (EU) on 23^rd June 2016. The invocation of the article 50 of the Lisbon Treaty initiated on that issue and that departing process ended up by the conclusion of the treaty of March 2017. Brexit may be implemented in several ways but the main aspect of the process was the negotiation principles. UK declared that they had a greater idea of managing Government aims and services thus they did not need further support from EU. The UK was not being able to the European court of justice and has gained a partial membership to European Court of Justice (Adler-Nissen, Galpin and Rosamond 2017). The government had aimed to control over the immigration and able to stick their law over the trade level. There is basically two approaches had been taken by the executives to the Brexit process. One of them was the Defensive approach, which was taken to minimize the risk factor of Brexit as the dealing process intrinsically unsafe and the task of compromise as one of annoying to keep as many of the profit of EU association as possible. The other approach was the Aggressive approach, which centered on the possible benefit and set the future trends in the UK that also provide the fundamental continuous process of business threat and development.

In this report, the impact of the global economy and the government approach in the UK was the main concern. The negotiation process and the fundamental opportunities were the prime concern in this report and what were the chances of establishing a business was started over here.

The most important decision that had been taken by the UK at the ballot box where the overstatement of EU had been nullified and most of UK government set their aims to complete their business development (Toly 2017). UK government allows the political integration and opts out Britain from EU membership. Another restriction of EU migrants was to ensure the revised national legislation for the other members in Europe. Both the negotiation strategy introduced by Brexit was provided some grasping opportunity and choice the trade-off that involves the accepting risk for the enhance me of business.

Figure 1: Trade relationship of UK with EU

(Source: weforum.org, 2017)

The defensive negotiation strategy aims at minimizing risks that can be evoked by the influence of Brexit. In this particular approach, there was very little chance of achieving and from that process management in greater business had to take some risk and mitigate them effectively.

Opportunities and Challenges in Business

Figure 2: Negotiation Strategy

(Source: demos.co.uk 2017)

In case of the other approach, mitigation of excessive demand was the main criteria and ignorant of risk situation or the process of maintaining the business economy of EU was the concern idea of that matter (O’Reilly et al. 2016). There were certain policies that have examined in this sectors like the Social and environmental outcome, labor market, Industry and trade and civil society. 

The decision of Brexit not only shocks the British Banking sector but also influenced by the global economy. Brexit decision had created a direct impact on the economy, the baking sectors were highly affected, and stock market fall and British pound sank 10%. All these problems were highlighting the issue that the decision was positive or not in favor of Britain (Cumming and Zahra 2016). If their business infrastructure had really grown up then the application of the business market can sustain on that place and that evaluate the projected service fall that EU provides in favor of UK.

Figure 3: Sector of challenges due to Brexit

(Source: demos.co.uk 2017)

There were certain opportunities that affect Brexit case and evaluate the business processes and their enhancement in business. Advocacy was the first thing that creates an effective engagement with customers. That ensures all effective and proportionate national laws to provide freedom in aspect to build the new business in a new form. Trade deals were being affected on that time with other countries (Clarke, Goodwin and Whiteley 2017). The competitive market analysis was the key aspect of the business price accommodation and that diversified in trading blocks and most trading areas. The UK will not associate to deal their business with other inter-governmental organization thus their economic growth and sustainable business orientation had got a threat that protects the consumer and fair trade option. The opportunity that British business had evaluated through the opportunity was the legal expertise that evaded by the process of Brexit (Owen and Walter 2017). The UK could guide the world in usual invention directives by integrating the balanced, impartial and reasonable fundamentals of EU commandment and ditching the respite part that evaluated by Brexit. This was one of the opportunities that UK had got from the detachment of EU. The main opportunity that had been gained by the UK was the free building of their business manner. In that case, UK had considered them as the free nation where external restrictions were not imposed on them and this is the main reason that they can produce their own product and sold them in the external market (Farrell and Newman 2017).

Impact on the Global Economy

There were certain problems also that have been faced by the UK in this trouble situation where the trade negotiation with other countries was not taken place as the countries were an integral part of EU. So this was another challenge that had been faced by the UK to made business with other nations (WU and TAN 2016). Usual products organizations did not rely on EU law commencing by the European Court of Justice where this exercise authority was taken more preventive decisions by UK establishment. If EU counties were not interested to deal with the UK then that must be a threat to the economic enhancement of UK and that enhancement was stopped growing perspective of the nation (Cumming and Zahra 2016). Parliament advocacy and natural product business was another concern that provide the best interest for the UK and that enables the political inputs in the legal aspect within this, this was another lacking sense that had created by EU to make proper justification over the Brexit case. Trade block was another problem that had been facing the UK from the issue of Brexit (Burdekin, Hughson and Gu 2017).

Company operation had been reduced by the effective impact of the business operation. The decisions were very much pre minded by the companies and they have interpreted the thing for their company development. There was a certain effect that comes to the mind at the establishment of the companies and that situations were making worried about them. The basic concern for the companies was the uncertainties of their business process and that concern issue impacted over the companies (James and Quaglia 2017). The trade market and the enhancement of their product in the external market had been limited and that impacted over the general agreement of the companies to the nation. Another problem that companies in the UK had faced in that time was the currency appreciation.

Figure 4: Brexit on global economy

(Source: Datacenterconsulting.com 2017)

Therefore, logical support that the UK reserves will be required to lower interest charge to attempt and turn away a recession.  It was also probable that the USD will be carried on high on international Foreign Exchange markets as a secure refuge currency policy. Most of the UK goods and services were not meeting the profit margin as the internal market had been compressed by the effect of Brexit (Hatzigeorgiou and Lodefalk 2016). Another important challenge that company had face while facing the business expansion in the UK was the regulation binding of a free market. The process will no longer be in that case once the UK foliage the EU.  Companies were really wasn’t to sell their product in UK market. However, with the UK exterior the free marketplace, send abroad system will likely be relevant, the information of which will for probably for another 2 years (Grant 2016).  This will perform as a deterrent for US companies to arrange their European revenue hub in the UK. Direct taxation policy was also get affected by the influence of Brexit, for that reason, Vodafone thought at the initial stages to change headquarter out of UK. The decision had taken place by the impact of Brexit and their impact on the UK economy assess the circumstances and will take any decisions were suitable for the wellbeing of our clientele, shareholders, and people (Bourn 2016). In case of Tesco, which entire retail pricing price has grown up 5% and from the comparison with previous year, inflation had doubled. This was the major problem that had been faced by the existing customers of Tesco. The inflation rate had been uplifted by 1.4% and that signifies the price incensement and that evaluate the competitive market and executive understanding of the increased cost of supermarkets like Tesco (Burdekin, Hughson and Gu 2017). The trade becomes more expensive in that scenario and that impacted over the people, as the people were not accustomed to the high production rates thus companies have to deal with that high price rate and struggling for their revenue generation.

Impact on Companies in the UK

The pound has drooping aligned with the dollar as the first monetary implications of the UK’s elected to leave the EU sparked a value row between Tesco and its contractor Unilever. The parental company Unilever has the authority or power to make the change against Tesco if they do not obey their rule and as the process goes on Unilever had stated that 10% of price rise on each product of Tesco (Burdekin, Hughson and Gu 2017). The higher cost of Tesco and the marginal assimilation had got from the other external market can enhance their business but most of the time the business is not effectively processed over the supermarkets. Authentic trading at $1.216 in unties trading, down 17 % ever since the EU referendum (Seabrooke and Wigan 2017). The issue of Brexit and its impact on the supermarket are infectious as the value of each product had increased and for that reason, the price and living standard of people had got a threat (Yueh 2017). The global economy and the advancement of companies were associated with the revenue generation of the company. So most of the companies were getting fear to invest in Britain as they were in trouble situation where the economic imbalance situation was the concern reason behind that. The Global economic forum was the concern matter for the reformation of business in Britain as the internal imbalance situation was already persisted in the UK (Hepburn and Teytelboym 2017). The major aspect that impacted the business is the economic condition of UK and that has imposed from the time of Brexit. Thus the following issue is the concerned chapter of UK history where the pursuing trade deal that other nations have done was not formulated by the UK at all.

Figure 5: Brexit impact over Tesco’s share

(Source: thisismoney.co.uk 2017)

Tesco launched a £1billion turnaround plan in the UK after delivering a distress income caveat in January due to Brexit and admitted it was under pressure in a value war which has seen supplies spray customers with reduction vouchers. Investors are the concern with Tesco’s share as the increased expenses are the reason behind that (Simionescu et al. 2017). The company had gained almost 50% of price hike in this seasonal period but that has not affected the rise of price and product culture. The foods products are not meeting quality as the consumers want and that also imposed the burden to shop from there. 

The government negotiation process to encouraging the companies to do business in the UK supports the business accumulation a bit, but most of the cases companies are afraid of doing business over there. Companies are not supposed to do business in the UK and they have some valid reason due to the negotiation. Stakeholders are not supposed to encourage the business and for that reason, the companies are not strengthening enough to do the business on their own, and that creates a problem for the business market of UK (Hadfield and Hammond 2017). An additional area for sanguinity is the UK’s probable potency in consultation, the business attentiveness to depart the Single marketplace and even go away the EU without a free operational trade agreement in this situation (Syromiatnikova 2017). The UK’s choice to extract from the EU, the major political alignment method that was a disastrous operation of self-indulgence surfaced on a risible over judgmental of the country’s present connotation and bargaining authority.

Global Britain trade strategy can be used in this disaster scenario to get rid of this process and that also analyze the free trade agreement for the development of trade. This is an open economy forum that predominantly maintains the export and import scenario of business in the UK. For this reason, the restrictive infrastructure of WTO has broken down and bilateral trade agreement has imposed over the UK. Another recommendation that can be imposed in the UK was the accumulation and segregation of multi-polar world economy. The advanced economic aggressiveness and the advancement have been done by the economic trend of the country so it that cases the economic growth of the company and the probable service that has been given to the nation is the ultimate thing so that the UK can develop their economic formation and strengthen the global process of stable economic balance. EU-CARIFORUM trade deal or the USSR trade dealings were the previous steps that have taken at the initial stages of Brexit however, from the long-term sustainable condition organization retention policy and trade approach need to be redefined so that smaller market can be extracted from EU and that was the major effective portion that evaluates the existing trade in a new dimension. Tesco has to take the certain recommendation from this for the development of their business in the long term business run.

Conclusion

Therefore, the report can be concluded that all the aspect of the findings is associated with the impact of Brexit. Tesco has been chosen and their trade maintenance and trade opportunities have been discussed over here and what are the initiations that can take place is the key discussion in the report. In this report, the drooping economy of Britain and companies insecurity is the concern matter that provides enough challenge to the UK. Most of the countries are attached with EU are not dealing their business with the UK so in that case, the agreement the economic loss has to persist in this scenario. The business structural change that Britain has done for the development of the economic state is established over here and that signifies the effect of Brexit in the UK.

References

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