Brexit and Inflation: Effects on UK Local Business Growth Case Study

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Report 1:

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Introduction

This report's main purpose is to explore global inflationary pressures and the subsequent growth in the cost of living’s impact on local town businesses through a case study of Apple store. The exploration helps to supply valuable information about different experiences and challenges faced by corporations in the current era. It will also help to understand the appropriate solution to make growth.

Global inflationary pressures and the subsequent impact on the cost of living

According to the most delinquent PMI survey information, global inflationary pressure was relieved in May, although it remained high due to many factors. Price rises were thus more largely noticed in the economy of labour-intensive services, however selling prices declined in manufacturing. Examining the world's significant economies, it has been found that inflationary pressures were most persistent in the UK in May, with sales inflation for services and goods now operating well above averages for the US, the eurozone and Japan.

Figure: Price charge changes in manufacturing and services

The above figure shows that the UK possesses the highest price charges for manufacturing and services in comparison to the other developed countries (IHS Markit, 2023). On the manufacturing side, labour costs were the only significant element exerting any substantial upward pressure on sales prices. Both raw material prices and demand are now putting negative pressure on output prices, with product demand significantly plying the most powerful deflationary pressure in the survey's history (Chowdhury, 2023). Energy costs have been the biggest higher price driver throughout largely of the pandemic, now pushing closer to long-term averages. Another significant higher inflation driver is fuel prices, with road fuel and household fuel duty costs rising in 2022. These factors put a significant mark on local businesses like Apple stores.

Apple store is a local outlet that provides services on technology such as i-pad, watches and many more. In the UK there are 40 Apple stores of Apple. In England, the company has the most number of stores (Apple, 2023). The store addresses itself in the circle of inflation. Enhancing purchasing costs has a direct impact on product quality and accuracy. Additionally, the store relies heavily on its supply chain management for products of different ranges. The fuel cost increment disrupted their supply chain by making delivery prices high and delaying in the supply of products. Due to inflation clients' living costs also increase which becomes extremely sensitive in the aspect of pricing guiding toward minimising shopping. In 2022 the customer price index shows a 7.9% housing cost increment (ONS, 2022). In this context, the CEO of Apple Store stated that the corporation is noticing inflationary pressure that has reduced near about 124 billion USD in sales. The consumer price index source is a significant price enhancement around the customer goods basket that Rose by 7% from the previous year. He also provides shipping cost examples to understand inflation's impact on Apple's business (Leswing, 2022). This has a direct influence on store revenue as clients find it beneficial to purchase essential products overspending on luxury items. Besides that, the store also experiences issues with maintaining equilibrium between handling cost and product range diversification. The inflation rate of price pressurizes the corporation to restructure its pricing strategy which limits its reach to large customer segments (IFS, 2021). Price-conscious clients purchase affordable Technology such as watches, iPads and many more from other brands over Apple.

Brexit and Inflation: Effects on UK Local Business Growth Case Study

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Recommendation:

Market analysis

The corporation needs to research the market to know about the current market trends and growing clients' demands. This information can be beneficial for developing effective personalized initiatives that can help to attract large customer segments (di Giovanni et al., 2022). Additionally, it also helps them to remain competitive within this evolving business dynamic.

Strategically collaborate with Supplier

The Apple Store needs to investigate different suppliers who can provide them with raw materials at an affordable price. Additionally, it can also offer them the opportunity to negotiate with them at a suitable price and provide them stability in good supply (Padhi et al., 2022).

Conclusion

Overall it can be stated that global inflation pressure is marked by high labor costs, raw material pricing hikes, high energy costs and high living costs. Local businesses in the UK such as Apple Store also experience minimisation of revenue due to these factors. This demanded a significant approach that could help them mitigate this challenge by providing further business growth. In this initiative, they can adopt market research and supplier collaboration. That can help them to combat inflation and maintain their pricing strategy to attract large customers.

Report 2:

Brexit-Driven Demographic Shifts and Their Impact on Local Small Business Growth

Whether you're studying microeconomics, macroeconomics, or econometrics, our economics assignment help covers everything, from fundamental theories to the latest economic models

Introduction

The report focuses on evaluating the influence of changing demographics of economic migration due to Brexit's impact on small independent business entrepreneurial growth in the local area. Investigation of this aspect will supply significant, valuable information about local startup businesses or entrepreneurs experiencing challenges. It has been done by examining some examples of small independent businesses. Besides that, it will also help to establish proper suggestions for sustaining business growth.

Changing demographics of economic migration in the context of Brexit

After Brexit, the economic migration illustrated a transformative influence on local areas' economic demographics. For instance, transformation in policies and Visa requirements can attract distinct skilled workers as well as entrepreneurs from multiple Nations. This demographic transformation analysis is essential for acknowledging their impact. In the UK, Brexit has raised the price and complication of obtaining labour and exporting and importing goods (Igwe, Nwajiuba and Igwe, 2021). This also retained an indirect effect on UK exchange rates, with the pound depreciating significantly since 2016 in comparison to the dollar. However, current inflation is driven by energy prices. Rising electricity prices and wholesale gas are feeding growing commercial and domestic energy bills. In 2020 the petrol price increased to double from the previous year. Government insurance and tax enhancement as well as pandemic-relevant removal of public credit and other advantages enhance fueled growth. Also, wage restraint and austerity conditions for much of the population have stagnated their incomes and reduced spending for many. Additionally, the Bank of England has raised their base rate from 0.1% to 1.25% in the last of 2022 in five hikes as a result of inflation concerns affecting business lending and consumer spending (Sparks, 2022). Beside that after Brexit, well-equipped worker arrival enhances local communities' inclusion and diversity. These demographic transformations enhanced client demand. Local small independent businesses such as cafes and local retailers signify the scope to attract a large customer base by supplying different services and products that resonate with their growing preferences (Lomax et al., 2019).

Impact on the entrepreneurial growth of small independent businesses

Small changes in the demographics after Brexit is found due to the migration of large businesses to small independent businesses. This demography includes all local's different types of individual stores cafes as well as inventory stores but this creates opportunity as well as faces different types of challenges (Brewster et al., 2023). Different small businesses face different types of challenges due to a lack of skilled workers which changes the taste of choice. Local coffee shops can show different types of diversity along with popularity. it offers some special taste which is actually inspired by customers who help to capitalize on that change in a particular demographic area creating

a good selling position. For instance, Prufrock Coffee a small coffee shop provides a specific beverage range to attract new diversified residents. However, the imported coffee beans price also increases by 7% during this time (Independent, 2019). Different types of small businesses have faced several challenges basically boutique stores, as well as classical fashion, faced those types of challenges and they struggled at their initial time. As a result, they have to lead with their customer base which helps to make a unique Identity in the market. Different types of strategies regarding marketing help to make a good approach that makes it travel in the market of competition.

Recommendation

Digital presence:

In order to mitigate these challenge small corporations can focus on their online presence through incorporating digital marketing channels such as social media, emails, twitter and more. This can help them to enhance their visibility by reaching large target customers (Billing et al., 2020).

Developing a strong network:

Those small corporations can also establish a strong network with other businesses to grab business expansion opportunities. It is also helpful to develop a supportive and positive ecosystem that emphasises mutual development (Bauzá et al., 2020). Through this, they can also reach large customer not only in their region but also in other regions. 

Conclusion

These reports actually focus on the comprehensive study of different types of macro environmental issues in the local sector throughout the globe. There are different recommendations which when put into action increase the empowerment of businesses as well as mitigate different types of challenges in a particular way. These not only show the way how to minimise the challenge but also it help to stay in the open market in this economy. Different types of strategic ideas hills to increase the local business by making a particular type of change in the environment of the market.

References

Report 1:

• Apple (2023). Regent Street - Apple Store - Apple. [online] Apple (United Kingdom). Available at: https://www.apple.com/uk/retail/regentstreet/#:~:text=Regent%20Street%20%2D%20Apple%20Store%20%2D%20Apple%20(UK) [Accessed 17 Jan. 2024].
• Chowdhury, M. (2023). On Money and Inflation. SSRN Electronic Journal. doi:https://doi.org/10.2139/ssrn.4406437.
• di Giovanni, J., Kalemli-Özcan, Ṣ., Silva, A. and Yildirim, M.A. (2022). Global Supply Chain Pressures, International Trade, and Inflation. [online] National Bureau of Economic Research. Available at: https://www.nber.org/papers/w30240.
• IFS (2021). lnstitute for Fiscal Studies. [online] Available at: https://ifs.org.uk/sites/default/files/output_url_files/2-UK-economic-outlook-the-future-isn%2525E2%252580%252599t-what-it-used-to-be-.pdf.
• IHS Markit. (2023). Wage pressures keep global inflation elevated, most notably in the UK, but goods prices fall. [online] Available at: https://www.spglobal.com/marketintelligence/en/mi/research-analysis/wage-pressures-keep-global-inflation-elevated-most-notably-in-the-uk-but-goods-prices-fall-jun23.html#:~:text=Stubborn%20inflation%20most%20evident%20in [Accessed 17 Jan. 2024].
• Leswing, K. (2022). Apple CEO Tim Cook: ‘Everybody’s seeing inflationary pressure’. [online] CNBC. Available at: https://www.cnbc.com/2022/01/27/apple-ceo-tim-cook-everybodys-seeing-inflationary-pressure-.html.
• ONS (2022). Consumer price inflation, UK - Office for National Statistics. [online] www.ons.gov.uk. Available at: https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/may2022.
• Padhi, A., Smit, S., Greenberg, E. and Belotserkovskiy, R. (2022). Few chief executives have faced the challenge of leading a company through an inflationary spike like today’s. Lessons from strong leaders and bold action can help CEOS make the decisions that only they can make. Navigating inflation: A new playbook for CEOS. [online] Available at: http://dln.jaipuria.ac.in:8080/jspui/bitstream/123456789/14278/1/Navigating-inflation-a-new-playbook-for-CEOs.pdf.

Report 2:

• Bauzá, F., Ruiz-Manzanares, G., Pérez-Sienes, L., Tarancón, A., Íñiguez, D. and Gómez-Gardeñes, J. (2020). Analyzing the potential impact of BREXIT on the European research collaboration network. Chaos: An Interdisciplinary Journal of Nonlinear Science, 30(6), p.063145. doi:https://doi.org/10.1063/1.5139019.
• Billing, C., McCann, P., Ortega-Argilés, R. and Sevinc, D. (2020). UK analysts’ and policy-makers’ perspectives on Brexit: challenges, priorities and opportunities for subnational areas. Regional Studies, 55(9), pp.1–12. doi:https://doi.org/10.1080/00343404.2020.1826039.
• Brewster, C., Fontinha, R., Haak-Saheem, W., Lamperti, F. and Walker, J. (2023). Linking embeddedness to physical career mobility: How Brexit affected the preference of business, economics and management academics for leaving the UK. Research Policy, [online] 52(9), p.104855. doi:https://doi.org/10.1016/j.respol.2023.104855.
• Igwe, J.O., Nwajiuba, A. and Igwe, P.A. (2021). Migrants as Creative Economic Forces and Contributions to the UK Local Economy. Migration Practice as Creative Practice, pp.119–131. doi:https://doi.org/10.1108/978-1-83867-765-720211015.
• Independent (2019). Brexit could push up the price of coffee by 5%. [online] The Independent. Available at: https://www.independent.co.uk/news/business/news/brexit-increase-price-of-coffee-london-roasters-eu-referendum-pound-dollar-a7133881.html [Accessed 17 Jan. 2024].
• Lomax, N., Wohland, P., Rees, P. and Norman, P. (2019). The impacts of international migration on the UK’s ethnic populations. Journal of Ethnic and Migration Studies, 46(1), pp.177–199. doi:https://doi.org/10.1080/1369183x.2019.1577726.
• Sparks, L. (2022). How is the cost of living crisis affecting retailers and their customers? [online] Economics Observatory. Available at: https://www.economicsobservatory.com/how-is-the-cost-of-living-crisis-affecting-retailers-and-their-customers.