UK Trade & Brexit

This assignment focuses on the UK's trade relationship with the European Union, specifically analyzing its trade balances in goods and services both before and after Brexit. Students are required to examine provided data (Illustration 1) to understand the historical context of UK-EU trade and then delve into the implications of Brexit on this vital economic relationship.

Marketing within Global Economy

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Analysing the potential effect of Brexiton an organisation Originating Outside of Eu and
trading on EU market..................................................................................................................1
TASK 2............................................................................................................................................2
1. Identifying and explaining theory behind the trade integration..............................................2
2. Identifying possible models of economic relation between EU and -27 and UK after the
Brexit.,.........................................................................................................................................3
3. Identifying Theoretical opportunities and risks posed by Brexit which Prudential company
could face in different scenarios.................................................................................................5
4.Designing a strategy which organisation can used to exploit potential opportunities and
reduce threats..............................................................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................8

INTRODUCTION
Global marketing is defined as marketing on large scale taking commercial benefit of
international operation differences, similarities and opportunities in order to fulfil international
objective as well as goals. The study of marketing within global economy is essential as it assists
organisation in maintaining its competitiveness , to analyse the changing customers needs and
demands. It also supports firm in analysing current market trend, updating themselves with the
latest technology, meeting challenges of developing strong relationship with customers in global
market by providing them with good qualities of goods as services and by fulfilling their needs
(Kumar, 2015)
The report has focus on analysing potential effect of Brexiton which is an organisation
that has been originated outside of EU but operating in European market. Project emphasizes on
identifying threats and benefit faced by Prudential enterprise which is dealing in financial sector.
It will also include explanation about various theories behind trade integration. Analysing the
possibilities of economic relationship between UK and EU.
TASK 1
Analysing the potential effect of Brexiton an organisation Originating Outside of Eu and trading
on EU market.
The financial company Such as Prudential organisation has the high potential to execute
high quality financial activities. The leading global financial sector are operating within EU such
as in Luxembourg there are 12 companies, Frankfurt 19, Paris 29 organisation etc. Therese
number of enterprise represents the most important impact of a withdrawal of United Kingdom
from EU in context of financial services.
The potential United Kingdom withdrawal from EU has great effect on Prudential
company that is dealing in Financial sector, this is supported by four scenarios, which extent
from the United Kingdom losing access to financial market in European Union. It was the
approach of Friendly relation that has allowed the financial companies in United kingdom to
enter into European market in order to generate revenue and increase profitability.
Analysing the opportunities as well as challenges face by prudential organisation while
operating in Eu market.
As UK economy is based on EU financial service market to generate demand for
financial services. Some advantages that are gain by Prudential company are they have been
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provided opportunity to provide services for professional investors throughout EU. The
organisation that are operating in EU market may be able to gain advantage from a possible
European commission decision that include evaluation of credit risk of UK lenders as well as
counterparties. It may also may be benefited by Eu decisions related to compliance with trading,
reporting as well as clearing obligations (Salavati & Karami, 2015)
The threat that has been faced by organisation include economic crisis in the country,
decrease in rate of investment, implication of various new laws related to financial sector. The
potential risk of closing EU market to third countries entities and goods as well as detrimental
impact that new rules framed by EU may have great impact on competitiveness of Prudential
firm (Wright,2016)
` The various strategies that Prudential organisation can used to exploit potential
opportunities are market penetration and innovation strategy. Entering into emerging market will
assist business entity in minimising the threat of loosing market share. This will allow
organisation to explore more advantages by entering into new market and fostering market
growth. The Prudential business entity can conduct joint venture with global companies as this
will help and support firm in gaining competitive advantage in international market. It will also
aid enterprise in minimising the impact of macro environmental factors on its business
operations. Innovation and product development will provide organisation to attract more
numbers of customer and establish good position in international market (Pels, 2015).
TASK 2
1. Identifying and explaining theory behind the trade integration.
The theory of trade integration is not traditional. These theories have encouraged many
countries that have been badly impacted by Brexit to support free trade of agreement so that the
goods and services can be easily exchanged. These approaches have focus on production,
consumption and trade of products as well as services. Actual changes in structure as well as
nature of global trade has been characterised by rise in trade of highly differentiated goods, that
is combined by development in part of intra-industrial trade (Chen & et.al., 2015)
European integration is defined as a process of industrial and political economic, legal,
cultural integration of various state who are partially or wholly the part of European union.
Functionalism as well as Federalism projected the elements of nation state, whereas
Transactional have focus on explaining the condition for the stabilisations of nation-state system.
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The theory that has influenced the EU integration is neo-functionalism. The other theory
behind trade integration is inter-govermerntationalism (Kumar, 2016.)
2. Identifying possible models of economic relation between EU and -27 and UK after the
Brexit.,
Being a member of EU, United kingdom was being included in trade deals that has been
negotiated by European Union. There are approx 22 agreements has been facilitated by European
Union with various other countries. The major Five multi lateral agreement was being conducted
with two-fold countries. It has presented that the various organisation or financial institutions
wants to retain access to global market that has been covered by these agreements. UK has to
take initiative to renegotiate trade deals with all such countries and especially with EU (Kubacki,
& et.al., 2015. )
As Britain is considered as a big market, various financial companies like were getting
higher incentives as profits forced and encouraged UK to negotiate deal with EU (Jaramillo &
Spector,2015)
There are basically five models of economic relationship between EU-27 and UK after
post Brexit. These are :
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Illustration 1: UK Trade balances in Goods and services with EU
Source:Brexit-(The UK and European Union,2017)

 Norway model: The organisation in Norway That were operating in EU market
should get access to single market and such firm should take interest in making financial
contribution in market. It is essential for organisation to comply with all
legislation, code of conduct formed by EU. This model state that it is
compulsory for all global companies to contribute in economic development of
country. These rules and regulations are essential to implement as it will assist
Organisation Britain to access global market and maintain prices of goods as well
as services (Pavlou & Stewart,2015).
 Switzerland model- Switzerland as a member of Free trade association, can get access to
EU market that has been managed by various bilateral agreements, covers only some
aspects of trade. Switzerland also makes less economic contribution as compared to
Norway. It is not all essential for Switzerland to apply various laws that has been
formulated by EU in order to facilitate trade, free movement of products as well as
services. This agreement also requires free movement of people. Banking sector in
Switzerland do not have full access to Eu market.
 Turkey model-Turkey is the member of custom Union. It is not compulsory for
Organisation to comply with TARIFFS that are required while exporting products as well
as services in EU countries (Homburg, Jozić & Kuehnl, 2015)
 Canada Option-Canada has facilitated Ceta free trade agreement with EU that has not
been reinforced till now. The aim of the deal is to eliminate tariff on products. According
to this model it is essential for Exporting companies in Canada to prove that the product
they are exporting has been manufactured entirely in home country. Few aspects of
services sector has been included in this deal. This model states that it is compulsory of
various organisation operating in EU has to follow and maintain the product standard that
has been formulated by government (Anton,2015)
 Singapore and Hong Kong Model-This is unilateral free trade model. It has been
recommended by some advocates in Brexit that unilateral free trade strategy should be
adopted by UK as this will assist in eliminating various tariffs. For instance Hong Kong
has adopted the policy of free trade with China. This strategy means Some special
administrative region is required to maintain barriers on trade. There is less implication of
laws related to import as well as export licence. This model intends to make appeal to
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Brexit to support no trade restriction policies. It prefers to gather less assistance from
those countries who have less impacted by Brexit (lark, & et.al.,2016)
3. Identifying Theoretical opportunities and risks posed by Brexit which Prudential company
could face in different scenarios
As Prudential company is dealing in financial sector it may have threat of fluctuation in
currency rate such as decrease in rate of pound has great effect the profitability and growth of
firm as its is totally dependent on international operations. The organisation that holds foreign
currency as well as bonds are at high as bonds require interest as well as principal money in
foreign currency. Depending on global suppliers can also lead to increase in cost due to reduction
in rate of Pound. It has great impact on the profit margins of enterprise. These factors have great
effect on the revenues, operational funding requirement and payment obligations. Brexit can
have great effect on financial arrangement and relationship of Prudential company with other
global enterprise. UK leaving EU have great influence on enterprise performance as well as on
its growth. Enterprise has to face transfer price issue and tax implication has become major threat
for business entity (Demangeot, Broderick & Craig,2015)
The Prudential company has gained various opportunities in terms of operational, legal
and strategic point of view. Fluctuations in Exchange rate has provided organisation a
transactional benefit. The business entity has been benefited as Brexit doest not have much
influence on its customers. Firm has gain advantages of doing free trade and has got a chance to
eliminate various trade barriers, still industrial regulation that has been formulated by EU. It has
provided organisation an opportunity to reduce competitive and it has got a chance to restructure
themselves as well able to increase their competitive strength (Demangeot, Broderick & Craig, C
2015)
4.Designing a strategy which organisation can used to exploit potential opportunities and reduce
threats
It is required by various financial institution that has been badly impacted by Brexit to
develop team and should emphasize on gaining knowledge about the consequences of UK exit
from EU on their business activities. It is required prudential company to review their business
structure as well as model and relate effect that may lead to uncertainty (Ehrlich, Shoham &
Asseraf,2016)
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Firm should also facilitate a review law that are associated with the industry formed by
EU may have great impact on the business operations. It can also have great effect on the growth
as well as profitability of enterprise. Developing understating about various regulatory and
economic impact. With the assistance of such knowledge organisation can predict risks and
opportunities. This activity will assist business entity in minimising threats, exploring as well as
capturing more new opportunities. Measuring the level of operation that are to be conducted in
EU or UK will support business unit in provided coordinated response to other global companies
(Bahadir, S. C., Bharadwaj, S. G. & Srivastava, R. K., 2015)
The top level management in Prudential company need to consider various factors such
as impact of Brexit on consumers, effect of cost of trade, way the cessation of law framed by EU
may have great impact on finance sector, extent to which organisation can rely on EU agreement.
As Prudential enterprise is dealing in financial sector it is very essential for business entity to
analyse the effect of Brexit on cost of finance for borrowers in UK. It has been suggested to
organisation that it should rely as much as on domestic suppliers as depending on foreign firm
for obtaining supplies may lead to increase in cost of buying due to change in currency rate. As
Prudential company is trading in foreign currency should keep update themselves about changing
currency rates (Schmid, Grosche & Mayrhofer,2016).
Its is required by business entity to formulate communication plan in order to identify
that various methods and techniques adopted by management team to reduce the impact or
influence of Brexit on its business operation (Chen & et.al., 2015.) The communication plan also
have focus on external communication factors that include fulling the need of regulatory
reporting requirement as this will assist business unit in eliminating legal obligation. The
understanding and knowledge gain by top level management about consequences of Brexit on
business should be communicated to workforce. It is required by manager to provide open
communication platform to employees. As through this method workers will be able to provide
their views, ideas related to minimising the impact of Brexit. The internal as well as external
communications should be changed according to the demand of situations (Kaynak &
Kucukemiroglu,2015)
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CONCLUSION
It has concluded from the study that Brexit has great impact on the financial as well as
banking sector. It has presented that the various organisation has been benefited in terms of
economic, social, social and strategic point of view. Brexit has greatly effected the profitability
and growth of firm. There are various opportunities that can be adopted by various companies.
Report has successfully explained the various theories that has encouraged trade integration
between EU and United Kingdom. It has been identified that economic integration between these
two countries has lead to increase in export of differentiated and unique products (Barrett and
Weinstein, 2015.)
The Project has suggested various strategies to financial institution that can assist firm in
reducing the effect of Brexit on its business operation as well on profitability. Various options
and models has been recommended by assignment that can be used By UK for again signing a
trade deal with EU.
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REFERENCES
Books and journals
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Inertia, Stability, and Multinational Flexibility. In Rediscovering the Essentiality of
Marketing. Springer International Publishing.
Schmid, S., Grosche, P. & Mayrhofer, U., (2016). Configuration and coordination of
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Barrett, H. and Weinstein, A., 2015. Corporate entrepreneurship, the marketing mix, and
business performance. In Proceedings of the 1997 Academy of Marketing Science (AMS)
Annual Conference. Springer International Publishing.
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Chen, Y. and et.al., 2015. Linking market orientation and environmental performance: The
influence of environmental strategy, employee’s environmental involvement, and
environmental product quality. Journal of Business Ethics. 127(2). pp.479-500.
Homburg, C., Jozić, D. and Kuehnl, C., 2015. Customer experience management: toward
implementing an evolving marketing concept. Journal of the Academy of Marketing
Science. pp.1-25.
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Principle of Fungibility: Consumers’ Reactions to Membership Cards. In Creating and
Delivering Value in Marketing. Springer International Publishing.
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