After Brexit: Rethinking the structure of the UK economy and its branding strategies

• Published date: 01 September 2018
• DOI: http://doi.org/10.1002/jsc.2228
• Date: 01 September 2018

RESEARCH ARTICLE

After Brexit: Rethinking the structure of the UK economy and

its branding strategies

Barry Ardley

Lincoln International Business School,

University of Lincoln, Lincoln, United Kingdom

Correspondence

Barry Ardley, Lincoln International Business

School, University of Lincoln, Brayford Pool

Campus, Lincoln LN6 7TS, UK.

Email: bardley@lincoln.ac.uk

Abstract

Brexit is currently making the economic climate uncertain. It will have an impact on the eco-

nomic health of the UK economy and its products may suffer as consequence. It presents condi-

tions for engendering both the positive and negative features of a falling currency. Associated

with Brexit is the possibility of negative customer brand perceptions, a result of the UK country

of origin effect. This raises the issue of considering alternative strategic routes to growth.

1|INTRODUCTION: BREXIT, BRANDS,

AND THE ECONOMY

In terms of a rare and largely unexpected occurrence, there is little to

compare with the UK's Brexit decision taken in 2016. It surely can be

seen as what Andersen & Poulfelt (2014) describe as a “Black Swan”

event. The subsequent uncertainties generated by the decision have

been manifested in the falling levels of the exchange rate. The pound

fell 6% in 2 min according to the Independent (2016), not long after

the vote to leave took place. Uncertainties can result in these types of

“Flash Crashes.”So far, however, Brexit fears have not led to negative

growth rates and there may be opportunities from lower export prices

and the flexibility to undertake new trade deals (Guardian, 2018). Posi-

tive openings for UK brands may exist in other strategic marketing

alternatives as well, considered later in this article. This article draws

on macroeconomic theory related to exchange rates and data and

additionally, a marketing perspective, utilizing country of origin, brand

equity, and consumer co-creation perspectives. These differing view-

points are adopted in order to examine to what extent Brexit might

impact on the health of UK products and how any adverse factors

might be mitigated. Relevantly, an increased focus from government

on supporting key brands for exporting, may also have an impact on

the concept of creating more shared values. However, evidence would

suggest that much needs to be done to maintain a competitive edge

in the global market place.

2|THE CURRENT ECONOMIC CLIMATE

Concerns over the pound have been debated for some while and the

value against the dollar fell by around 20% between May and October

2016. Indeed, this may represent an opportunity for exporters. Low

prices could lead to a greater demand in the short term as well as

favorable levels of employment (Krugman, 2008). Local firms also gain

an advantage over foreign firms in the home market. More tourism

may take place in the UK due to the lower value of the pound and

there has been a boost to stock market prices, as overseas firms see

more possible bargains in terms of share prices and real estate. There

may also be a chance to rebalance the economy more toward

manufacturing. Here, the potential for exploring new trade deals exist,

as UK trade with countries outside the EU accounts for more than

50% of total trade (ONS, 2018). This is contingent on many factors

though. First, we need to have the right goods for export that are in

demand. In this regard, Thirwall (1982), has demonstrated this was not

the case a few decades ago, though a more flexible and skilled labor

market has helped much improve the UK economy today. The Olym-

pic Games' success and the rise of Cool Britannia helped to illustrate

this. However, there is much to be done to maintain this position due

to the rise of competition in both goods and services from Asia.

Despite rising levels of immigration, unemployment has remained low

which illustrates the risk of skills gaps post Brexit and in this respect,

Tung (2016) illustrates the importance of developing employees with

a bicultural identity. This will become more important as competitors

such as China move up the value chain and compete on innovation

rather than low cost. This represents a move away from made-

in-China toward created-in-China (Futurebrand, 2014).

JEL Classification codes: A12, M30, M31

DOI: 10.1002/jsc.2228

Strategic Change. 2018;27:441–446. wileyonlinelibrary.com/journal/jsc © 2018 John Wiley & Sons, Ltd. 441