Contemporary Issues in Management finalle.docx

2016 however with the vote for brexit amazon has to

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2016). However, with the vote for Brexit, Amazon has to set up fulfillment centers in the United Kingdom and operate them differently from those in the rest of European nations (Imrg, n.d. pg 4). It has a negative impact since it leads to an increase in the operating costs. Hiring Amazon has heavily depended on immigrant workers for staffing in the United Kingdom warehouses (Forbes.com. 2016). Brexit has created hitches on the near term operations of the company. If the organization’s existing workforce is not able to operate and reside in the United Kingdom, Amazon’s labor costs would increase significantly (Leadem, 2016). It also creates economic uncertainty that delays the hiring and spending activities of the organization
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Management 4 (Fulbright, 2016 pg 5). It makes it difficult for the firm to realize its plans to build an additional warehouse that will realize an increased workforce by about 2500 employees (Taylor, 2016). Sales The vote to have Britain out of the European Union leads to some potential economic uncertainty (Forbes.com. 2016). There is the potential that the United Kingdom’s gross domestic product growth rate is likely to fall on lower trade and investment activity (Carter, 2017). It is likely to lead to a decrease in consumer spending (Shepherd and Wedderburn, n.d. pg 1). It will, in turn, have a negative impact on revenues and merchandise value of commodities sold out by Amazon (Prokes, 2016). In this case, Brexit has a potential negative impact on the economies of Amazon. However, it could have a less mild impact. With a potential slowdown in the economy, consumers are likely to become more price conscious (Forbes.com. 2016). Their demand for improved deals and discounts will go up. In such a scenario, Amazon is best positioned to become the go-to marketplace. The increase in the customer demand will have a neutral to positive impact on the economies of Amazon. Taxation The European operations by Amazon are headquartered in Luxembourg (Forbes.com. 2016). They remit their levies and duties to the United Kingdom. Therefore, Brexit is not likely to have any great economic impact on Amazon as a result of taxation (Loyens and Loeff n.d. pg 2). The company will get along with its held custom of paying duties to the United Kingdom. Amazon Web Services Prior to the vote in favor of Brexit, Amazon was in the process of setting up Amazon Web Service data centers in the United Kingdom (Forbes.com. 2016). They were anticipated to be
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Management 5 ready by the end of 2017. Europe has two established Amazon Web Service regions that cater to cloud demand. They are situated in Frankfurt and Ireland. They make cloud services faster and more accessible. Amazon’s vision to have a data center located in the United Kingdom was aimed to assist the organization in wadding off concerns about information security. The Brexit vote is likely to have little impact on the Amazon Web Services. Organizations in the United Kingdom such as Shazam, The Guardian among others that use the Amazon Web Services are not likely to withdraw from using the services.
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