Business Expansion Beyond Britain Post Brexit †Free Samples

Question: Discuss about the Business Expansion Beyond Britain Post Brexit. Answer: Introduction: The aim of the paper is to analyse and evaluate the applications, costs and benefits of supply chain management. The backdrop of the paper is a set on Brexit and its impact on the British companies which have their major operations in Europe. The case study presents an automobile company whose major business operations are concentrated in Europe. The company would be losing its supply chain, majority customers and even employees due to Britains withdrawal from the EU. The paper studies the impact the loss of European market would have on the business of the company. It also suggests the measures like entering new markets which would help the motor making company to mitigate the business risks it would face by losing its European market. Impacts of Brexit on the automobile company: The four key factors that would have direct effect on the business of the Cardiff automobile manufacturing company in Britain if the country loses free access to the European market post Brexit are as follows: Human resource scarcity: The case study reports that the European division of the Britain based automobile company sources a major portion of its human resources from Europe. Strategic management of employees plays a very important role in the productivity of every organisation because they execute the business strategies made by the management (Epstein and Buhovac 2014). Britain would be formally exiting Brexit in 2019, which means that the companies based in the country would not have access to the free labour markets of Europe. This is an important factor as it would affect the talent pipeline of the British companies dependent on the labour markets of Europe for their labour supply (pwc.co.uk 2017). One can state in the light of the above discussion that Brexit would create scarcity in the talent acquisition of the Cardiff based automobile company as it would no longer have access to the labour markets under the EU. Material scarcity: The second factor, which would influence the productivity of the automobile company, would be scarcity of raw materials. As pointed out Britain would lose the access to the resource rich markets of Europe post Brexit. The case study shows that the automobile company sources 68 percent of its components from Europe, which it is dependent on the resource market of Europe heavily to achieve productivity. Thus, losing of access to the European market would hit the production of automobile motors in the Cardiff based company heavily (independent.co.uk 2017). Customer base: The case study shows that the automobile motor manufacturing company is based in the free market economy of Europe which means that its main consumer base is also in Europe. Thus, exit of Britain from Brexit would hit the revenue generation of the company fatally. This is because by losing access to the profitable market of Europe, the company would access to its customer base, which would decrease its revenue generation largely (Seuring 2013). Legal complications: The case study clearly mentions that the automobile company has entered into 5 years contracts with its customers, which also includes service level contracts. The means that post Brexit, the company would have to offer goods and services as per those contracts in order to avoid legal penalties. Post Brexit, the British companies would not have access to free markets of Europe and pay huge amount of taxes on their earnings in Europe. This means that the automobile company based in Britain would have to pay huge amount of taxes to operate in Europe and cater to its customers (nytimes.com 2017). Two factors influencing the automobile business: The two factors impacting the European business of the automobile company post Brexit would be scarcity of human resources and losing its substantial customer base. The overall impact of these two factors in the business of the Britain based automobile company would be a massive reduction in productivity and revenue generation. The company would be required to pay huge logistics expenses to acquire resources and sell goods in Europe post Brexit that would lead to plummeting operating costs. The company due to Brexit would be forced to lose customers, suppliers and human resources in Europe, which would restrict it within Britain, its local market. This decrease in market presence and profitability would result in reduction of risk mitigation capabilities of the company. Moreover, the company would be required to make strategies to deal with its increase in business risk. Skills sets required to function post Brexit: The following are the skills, which the automobile company requires to develop in order to operate post losing access to the markets of Europe and uphold productivity and delivery of products to retain customers: Training of human resource in Britain: Training can be defined as the human resource function which involves imparting skills and knowledge to employees to improve their performances. The case study shows that majority of the human resources of the company originates from Europe. The company would require paying 1000 per European employee yearly to employ them post Prexit which would greatly increase the operation costs (independent.co. 2017). The automobile company must acquire and train human resources from Britain to make them capable of delivering high productivity so that the it can earn profits even after it loses its European employees. The company must train new supply chain managers who would appraise and schedule the supply chains to bring about their improvements. Thus training the employees would help the company to manage its supply chains to acquire superior quality raw materials (Aradhye and Kallurkar 2014). Diversity management: Diversity management refers to the skills of the organisations to employ and manage a diverse employee population having varying gender, cultural, national or religious background. The case study clearly states that the majority of the employees working in the automobile company were from Europe while the remaining employees were from Britain. Brexit would require the company to lose its majority workforce due to loss of access to the markets of Europe, which would impact its productivity. The company should adopt the skill of diversity management to employ employees from other big labour markets like America, Australia and Asia (forbes.com 2017). This would ensure uninterrupted productivity and delivery of products to the customers. Consideration and evaluation of new supply chain: It can be evaluated that the automobile company can explore the possibilities of seeking supply chain in new markets to source raw materials and sell finished goods. The markets of Asia and America can provide the car component making company in Cardiff with human resources, material resources and capital. These markets experience huge demands of automobile motors and hence can provide the Cardiff based company with a huge customer base. This evaluation shows that the motor manufacturing company can enter these markets to earn huge profits. Moreover, the company can use the profit it earns from these markets to diversify the losses it would incur by losing free access to the markets of Europe post Brexit (Christopher 2016). Expansion of Supply chain into new markets: The company can expand its supply chain into new markets like Asia and would require an aggressive foreign market entry strategy to enter these new markets. It would first require carrying out a feasibility test to ensure that the motor parts making business would be able to thrive in the new markets like Asia. The feasibility tests should include technology, human resource and financial feasibility tests. If the feasibility tests are positive, the company can form foreign market entry strategies, which is the second stage (Epstein and Buhovac 2014). The company must consider several foreign market entry strategies like partnership, direct export and franchisee. The third stage would be forming strategies like product strategy, supply chain management strategy, human resource strategy and marketing strategy to enter the new markets. The fourth strategy would be carrying out market segmentation to locate the potential customers who can purchase the motors of the automobile company in these new markets. The fifth stage the automobile company can take to expand its supply chain management into the new markets of Asia and America is to seek advices from business consultants and partners having knowledge about these markets (forbes.com 2017). Analysis of performance of supply chain management: The automobile company based in Cardiff should analyse the performance of the supply chain by using appropriate logistics techniques. The study would consider using transit time from new warehouses or manufacturing plants to measure performance of supply chain in the new markets. The supply chain should employ just in time(JIT) logistic techniques to ensure that minimum time is wasted to transport the materials to the production plants from the new warehouses in the new markets. This would ensure that the materials are made available for production and help the company to save inventory costs in the new markets (Chyr and Huang 2016). Viability of sole reliance of business operations on the UK: It will not be viable for the automobile company to restrict its business dealings to British and it must split its business between Britain and its new markets like the USA to counteract the challenge it is facing by probable loss of the European markets. This will allow it to use the international logistics network of the country to acquire raw materials and sell finished goods (Monczka et al. 2015). Cost benefit analysis: As per the currency exchange rate as on November 21, 2017, I GBP is equal to $1.32. This means an amount of GBP 100000 is equal to $ 132345.16. Again $1 is equal to GBP 0.76. If the automobile company sells a unit of motor for GBP 100000 or $132345.16 in the US at 10% profit, it would gain revenue of $ 145579.68 $ 145579.68 would come to GBP 109927.20 which means the company gains a profit of 10% on a unit of motor by selling it in the US. Evaluation of the findings of the analysis: An evaluation of the above explanations shows that by expanding into foreign markets like the US, the motor company can earn high profits. This will allow the company to enjoy the benefit of distributing the losses it would suffer by withdrawn from Europe post Brexit. Moreover, the company can benefit by catering to the motor industry of the US, which would allow it to earn high profits (Brandenburg et al. 2014) Conclusion: The above analysis shows that the British automobile parts making company would suffer huge losses by losing its European markets due to Brexit. It can be recommended that the company should enter new markets like Asia and America. 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