A piece of writing on a particular topic or subject in a magazine or newspaper is known as Articles. This report is based upon three different articles i.e. Merging between Lloyd- TSB and HBOS, Cafe Portrait and Impact Of Brexit. This articles are published in UK national print press. Basically, this report gives knowledge about changes in business environment.
In first story, merging of two big banks of United Kingdom i.e. Lloyd- TSB and HBOS is shown. Halifax Banks Of Scotland is taken over by Lloyd- TSB during emergency in 2009. from this article we identifies that the addition of both the banks has the ability to change the whole banking sector. Lloyd Banking Group brings many of the high street brands at one place.
In second story, information about a well known restaurant in United Kingdom is provided. In which, affects of microeconomic environment on Cafe Portrait is given. Cited firm have various threats from their competitors ( Lantana Cafe). Portrait Cafe have to provide better quality than other at same or cheaper rate to exist in the competition for longer period of time.
In third story, how will UK's decision to leave the European Union will affect the economy of UK or Impacts of Brexit. It shows the short term disadvantages and long term advantages for the UK. Also, due to Brexit overall GDP of UK falls down which is one of the major issue.
STORY 1: “Merger between Lloyds- TSB and HBOS”
HBOS (Halifax Banks Of Scotland) is a Finance and Insurance company in United Kingdom which is fully acquired by Lloyd Banking group as it was taken over in 2009 (Marks, 2010). It was founded in 2001 and headquarter of cited firm is situated in Edingburgh, Scotland. Another firm is Lloyd- TSB, which is a public limited company and provides various financial services. It was founded in 1765 i.e. 252 years ago by Lloyds and Taylors.
Lloyd Banking Group plc- institution of finance, which is formed by addition of HBOS and Lloyd TSB. In 2009, both of the company started working together which bring many of the high street brands under a single roof. In mortgage market, the combination of both the banks accounts at number three. The sudden effects are less for the customers, but as the time passes people will start feeling differences and the banking climate of UK changes (Wei, 2010). Since, it has minimum international profile as compared to other banks like HSBC, Barclays, etc. as a result it will remain smaller. But in field of savings by big margin it will remain the leader in market. In long run, it may leads to very expensive mortgages as it is three times bigger than his strongest competitor in the field of mortgages.
As per the terms in deal of takeover, each HBOS share will get 0.83 of the shares of Lloyd which means that HBOS shareholders will dilutes the shareholding of Lloyd. HBOS 's existing shareholders will own 44 per cent of new organization and remaining 56 per cent owns by the existing shareholders of Lloyd TSB. The risk which is previously made by HBOS has taken by the Lloyd group, which have the possibility of higher growth or profit in the future when time is good.
In 2011, an additional annual pre-tax profit of one billion euro is estimated by Lloyd TSB after the addition of HBOS (Dumas, 2010). The stability and strength of this sector improves after this merger. In comparison of both the organization, Lloyd have 1900 while HBOS have 1100 branches around the globe. In terms of customers, Lloyd have 16 million on the other hand HBOS have 22 million customers. Also Lloyd have 70,000 employees while HBOS have 72,000 employees. The total equity of the Lloyd Banking Group is 41.234 billion euro in 2015.
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STORY 2: “CAFE PORTRAIT”
Cafe portrait is situated at Edingburgh, Scotland, where people enjoys delicious food, cake and coffee and takes a break from sightseeing. This restaurant uses fresh seasonal products, organic ingredients and there workers gives best oft hem as they are self confessed foodies (Kolstad, 2011). There food is very tasty just because they prepared food from scratch in their kitchen. In 2014- 2015, Cited organization achieves first position in the list by Glasgow Eating and Drinking Guide and The List Magazines Edinburgh. Cited organization is operated and maintained by Heritage Portfolio. The annual sales of this firm is 4,28,000 euro.
The main aim of any cafe owner is to manage the Controllable Profit. In this cafe, one of the main expense is labour. For the progress of the cafe labour's trust towards the organization is necessary. Second factor which effects is the milk waste, there are lots of milk required by any cafe and to use and manage it efficiently is the biggest task.
The biggest competitor of portrait cafe is Lantana Cafe as this is also among one of the fastest growing cafe in United Kingdom (Foster, 2010). Both the cafes uses different strategies to make more and more profit. The marketing strategies of Lantana Cafe is better than the cited firm, as result more customers are getting attracted towards them. Nowadays, there are various options or alternatives in front of customers so they can easily switch the cafe if they do not like anything about it. Therefore, customer satisfaction and providing them better quality service is necessary.
The main challenge in front of Portrait Cafe is increase in number of competitors from other retailers who are proving the same product at the lower prices. To maintain their brand reputation, cited firm must be able to withstand with other retailers and give them tight competition. The organization have to collaborate with other big as well as small cafes which further increases the distribution and also gives rise to the newer products.
Portrait Cafe have to provide better quality than other at same or cheaper rate to exist in the competition for longer period of time (Liedholm, 2013). Cited organization is famous for it's unique environment which is the main advantage of the firm. The company have good presence in United Kingdom and have good reputation among the customers. The trust of the customers towards the brand makes the growth or progress of the company much easier.
STORY 3: “ IMPACT OF BREXIT”
The biggest trade partner of United Kingdom is the European Union as approximately half of UK's business is with EU. Trade costs between both the groups is reduced by membership of European Union (Dhingra, 2016). As a result, for people of UK services and goods are cheaper and also encourages business of the country to export more. The barriers of the trade (high tariff or non tariff) would reduces the trade between both the countries due to Brexit i.e. leaving the European Union. The net contribution in the EU budget will be lower, which is the main economic advantage of Brexit.
After Brexit, all of the European Union countries losses income. The income loss in all EU countries are 12 billion euro to 28 billion euro and the overall fall of GDP in UK is 26 billion euro to 55 billion euro which is approximately twice of the income loss of EU. Smaller gain in the incomes of the countries is experienced which are not the part of EU (Dominiczak, 2016). After Brexit, the income of UK will fall by 2.3% in case of pessimistic and 1 % in the case of optimistic, if they all of its import tariffs from the countries other than EU. Reduction in trade lowers the productivity in long run.
In 1973, United Kingdom achieves a big deal when European Economic Community joins them, but now many of the things are changed. There are many serious issues such as either their productivity will recover or not (Wadsworth, 2016). There are various fields in which benefits of Brexit will be good or positive such as freedom of making trade deals, policies of immigration, etc. Impacts of properties of London, financial services and foreign direct exchange, etc. are short term costs while in these areas there are many long term opportunities due to Brexit.
There are various advantages of Brexit such as people will able to strike new business deals, the migration policies will be skill based, savings will be there on European Union contributions and also there will be less regulation (Dhingra, 2016). Despite of this, there are many disadvantages of Brexit such as the access is lost in single market, it provide damages to the cities, there are sudden fall in investments due to uncertainty, tariffs are high for export to European Union country, etc.
First story concludes that the merging of two organizations i.e. HBOS and Lloyd TSB forms Lloyd Banking Group which bring many of the high street brands at one place. In terms of savings by big margin it is the leader in market. The sudden effects of this collaboration is less, but as the time passes people will start feeling the difference. The organization have low international profile. The addition of both the banks has the ability to change the whole banking sector.
Second story concludes that cafe portrait is the well known restaurant of United Kingdom and to maintain it's reputation they have to take some serious steps. Also, they have to adopt new strategies as per the requirement of market. They have to provide better quality than other at same or cheaper rate to exist in the competition for longer period of time. Main focus of the cited firm is customer satisfaction and providing them better quality services than others.
Third story concludes that the economic consequences of the Brexit depends upon the policies which are adopted by United Kingdom. Also, for people of UK services and goods are cheaper and also encourages business of the country to export more. The trade between both the countries will reduce. Due to Brexit, overall GDP of UK falls down. There are various positives and negative impacts of Brexit on both the countries, but negative impacts are much more than positive one. Both UK and European Unions will take time to recover economically.
- Dhingra, S. and et.al., 2016. The consequences of Brexit for UK trade and living standards.
- Dhingra, S. and et.al., 2016. The impact of Brexit on foreign investment in the UK. BREXIT 2016. pp.24.
- Dominiczak, P. and Riley-Smith, B., 2016. David Cameron branded ‘totally irresponsible’for warning of Brexit impact while not creating contingency plans. Daily Telegraph, 29.
- Dumas, M. and et.al., 2010, October. Merging business process models. In OTM Confederated International Conferences" On the Move to Meaningful Internet Systems" (pp. 96-113). Springer Berlin Heidelberg.
- Foster, A. D. and Rosenzweig, M. R., 2010. Microeconomics of technology adoption. Annu. Rev. Econ.. 2(1). pp.395-424.
- Kolstad, C., 2011. Intermediate Environmental Economics: International Edition. OUP Catalogue.