Brexit Case HSBC

The process of UK leaving EU formally started on March 29, 2017 (Miele, 2017). The agreement on the British divorce settlement with the bloc was announced by the British and EU negotiators on December 8, 2017 (Herrero Vico, 2017). The exit bill that is to be paid by Britain was ranging between £35 billion to £39 billion. The agreement created the path to talk about the future relationship between Britain and EU through the talk have been delayed due to several issues involved in divorce. The British government and the EU are set to spend the next several years to negotiate a divorce balancing they are economic, social and political interests. The banking products and services offered reflect local requirements. Commercial Banking supports its customers with tailored financial products and services.

About 2 million customers from 54 countries were served by commercial banking by December 31, 2016. Commercial Banking has a wide range of customers right from small enterprises operating in the domestic market to big corporations operating globally. Products and services provided by Commercial and Banking include working capital, payment services and facilitation of international trade, also offers expert services in mergers and acquisitions and financial market access services. Due to the collapse in currency, inflation could rise by 5% hence resulting to the increase in import prices for firms. The company growth rate could decrease to 1% or 1. 5%, this is contrary to the 2017 growth forecast of 2. as one of the key dynamics, a fall in sterling would put Bank of England between a hard and rock place.

From the report its stated, “The BoE would face a dilemma (Herrero Vico, 2017). Currently, HSBC employs about 48,000 individuals in the UK and 260,000 across the world. HBSC plans to move its headquarters to Hong Kong despite of the significant amount of business it runs in Asia. Competition strategies Before strategizing on how to retain a top position in the industry, HSBC should have some considerations concerning the position of its competitors. Such considerations include changes in global trade routes by its competitors, how to respond to labor flows especially the ones affected by the currency movement. Investors are not sure whether they should channel their investments differently even before having an idea of the end results of the negotiation (Herrero Vico, 2017). It will be more effective if at least one of the company scenarios is challenging the company’s view on the way the world works.

The company should then look into the effects of each alternative future on its operations, how significant they will be, the most likely event timing, competitors who will survive under the stated scenarios if the company fails to, the alternative cause of the scenario, and risks and opportunities involved. The company should consider a number of questions that will help it eliminate different response for an individual scenario. The questions should be considered by the effective team formed mainly for that purpose. The questions to be considered include the strategies to be developed that will be robust under any of the scenarios, the investments to be made to ensure that the scenario is completely exhausted, and finally what the company should undertake to influence the establishment of the preferred scenario.

The company should be transparent in its dealings and allow people to express the opinion freely. Another strategy the company should consider in developing its foreign policy (Herrero Vico, 2017). As a global company operating in a global environment, the company should adopt changing regulations, consumer preference, and global culture. Finally, the company should be ready to welcome further public expression towards the strategy establishment. Conclusion UK exit from the European Union has various consequence including fall in sterling by 15% to 20% against the dollar, this will push sterling down to the level of the 1980s and towards parity with the euro. Cambridge University Press. Herrero Vico, P. Brexit: a challenging process with vital implications for the United Kingdom and the European Union.