Analysis: Influence of Brexit on the Global Economy and UK Businesses

This report provides a comprehensive analysis of the influence of Brexit on the global economy, focusing on the challenges and opportunities it presents for businesses in the UK and beyond. It examines the impact of Brexit on trade relations, negotiation strategies, company operations, and market analysis, along with the effects on the labor market and supermarkets. The report delves into the defensive and aggressive approaches taken by the UK government, highlighting the uncertainties and economic implications faced by companies. It further explores the impact of Brexit on company investment, business expansion, and the value of the pound, while also providing recommendations and concluding with an overview of the subject matter. The report also analyzes the negotiation process and the fundamental opportunities for establishing businesses in the UK post-Brexit, along with the challenges faced by the UK in trade negotiations with other countries.

Running head: INFLUENCE OF BREXIT IN GLOBAL ECONOMY
INFLUENCE OF BREXIT IN GLOBAL ECONOMY
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Executive Summary
The report has shed light on the impact of Brexit over the organization in the UK. The major
economic problem faced by the nation was the reason behind the detachment of economic
alignment from other European Union companies. The trade relation and the negotiation strategy
were the important aspects that continue the differentiation process in between marketplace in
internal and external process. The labor market and the influence of supermarkets were important
in this aspect to analyze the issue of Brexit and its impact on the economic condition of Britain.
There was certain government negotiation process to enhance the business scenario was the
important aspiration that companies can get from the UK government but that was not enough to
mitigate the effect of Brexit.

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Table of Contents
Introduction......................................................................................................................................3
Overview of Brexit..........................................................................................................................3
Challenges and Opportunity in Business due to Brexit...................................................................5
Company operation and business expansion in the UK..................................................................7
Company investment and UK business operation...........................................................................9
Activities for joining or moving out from the UK.........................................................................11
Recommendation...........................................................................................................................12
Conclusion.....................................................................................................................................12
References......................................................................................................................................14

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Introduction
UK elected to depart from European Union (EU) on 23rd 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.
Overview of Brexit
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

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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.

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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.
Challenges and Opportunity in Business due to Brexit
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

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(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

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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).
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 and business expansion in the UK
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

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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

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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.
Company investment and UK business operation
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

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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

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(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.
Activities for joining or moving out from the UK
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.