The Ways Nissan is Effected By Brexit and the Ways to Tackle this Political Instability.

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Nissan is operating in Britain and as Mike Hawes, SMMT’s chief executive stated “the automotive sector” “has been hugely successful in boosting exports, creating jobs and generating economic growth in recent years” in Britain.

However, in the PEST analysis of Nissan, the political issues of Britain play a large role as Brexit: Britain’s exit from the European Union, correspondingly means that Nissan might have to pay taxes to export its goods from Britain to the EU. In addition, because of Brexit, some Europeans have started to ban products produced in the UK.

Nissan tries to tackle this political issue by asking the British government for a compensation for the losses related to the imposition of taxes and decrease of sales. In addition, Nissan tries to protect itself by not longer investing in the UK and gradually transferring their funds to other countries. For example, Nissan no longer considers to build the next Qashqau sport utility vehicle in UK.

The automotive industry generates more than 800,000 job positions in the UK and thus it might be detrimental for the UK if Nissan and other automotive companies gradually transfer their investments from the UK to other countries. If the government decides to pay Nissan the compensation it asks for, then there is a higher chance that Nissan continuous to operate in the UK. In my opinion, the amount the UK will have to pay for the compensation is trivial compared to the losses accompanied with Nissan’s withdrawal of investments.

However, if the UK government compensates Nissan, then  it gives the precedent for all the other firms operating in the UK to ask for compensation. Since this may not be done, the UK must negotiate with countries instead of firms. However, this might be an even more difficult as there are 27 countries in the EU, other than the UK, 50 additional countries with which the EU has preferential deals and another 161 countries, which are members of the World Trade Organization. Thus, negotiating with countries might take years or might even be impossible.

If this is the case, then the British economy is entirely on the hands of large firms like Nissan and their willingness to continue operating in Britain despite the tax imposed on goods exported in the EU and despite consumer’s unwillingness to buy British products.

All in all, Brexit has sparked a huge debate among economists on whether Britain should make trade negotiations and compensate firms that are vital to the British economy. In my opinion, Britain should do whatever it takes to persuade such firms to continue operating in Britain, but unfortunately it might be too late.

Is Starbucks genuinely ethical?

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Today I went to my University bookstore to buy a textbook when my eye caught an arrow that wrote “Ethically Sourced Coffee” and was pointing at a Starbucks store. This sigh was further accentuated as the “E” in the word “Ethical” was written in bright red and underlined.

This is an example pf Starbucks’s marketing strategy of selling the 99% ethically sourced coffee as its Unique Selling Point. Through this USP, Starbucks has managed to have  higher priced products compared to the products of many other coffee shops, such as the  Blenz Coffee shop and has also increased the prices of its drinks by as much as 30 cents. in the recent years.

Starbucks follows this pricing Strategy largely on the bases that people should pay more for its products compared to the products of other firms as ethically sourced coffee costs more than the unethically sourced one.

However, people have debated about whether Starbucks is overpricing its products to, indeed, cover the ethically-sourced-coffee costs or just to maximize its profit. If the second statement is true then Starbucks tries to maximize its profits by making people believe that they pay for an ethical purpose, which is greatly unethical.

Lets see the two points of the debate:

On the one hand Starbucks, indeed, ethically sources 99% of its coffee and rightly advertises this ethical activity

But on the other hand, this statement means that 1% of the coffee is not ethically sourced, and although 1% seems a very small percent, it translates to tons of unethically sourced coffee. In addition, Starbucks does not only sell coffee but other beverages such as tea, fresh juices and chocolate, the ingredients of which are not ethically sourced.

Since both sides of the debate are valid, the way a firm promotes its ethical behavior is what really matters. For example, if Starbucks had not overpriced its products so much then people might have appreciated more its ethical behavior.

Thus, whether a business is ethical or not is not a standard variable but depends on the viewpoint of each stakeholder and the marketing each business uses to promote its ethical behavior is what really matters.