• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Would BMW benefit if the UK government took us into the Euro by January 2004?

Extracts from this document...

Introduction

Would BMW benefit if the UK government took us into the Euro by January 2004? Introduction In this piece of coursework, I have been asked to research a business, in this case I have chosen BMW and see if they would benefit if the UK government took us into the euro by January 2004. To answer this question, I am going to use various sources (e.g. the Internet, newspaper articles, etc.) to research the British part of the BMW company, their finance system to see if they can cope with a change of currency and send a survey through e-mail to see what the managers and employees think about the situation. If BMW is a successful firm I can't see a change of currency affecting them in any way. Hypothesis When this piece of coursework is complete, I expect to find that BMW would benefit from the government's decision to take us into the euro by 2004. Because BMW is a successful business, with a more than capable financial system, I think that BMW will either not be affected or they will see an improvement in sales because of the conversion rate from the pound against the euro. Desk Research The euro is popular with some businesses because it: * creates stability, so levels of uncertainty are reduced, * reduces transaction costs because all deals ...read more.

Middle

The second trade-off is the constraint on economic policy. Once in the euro zone, a country must conform to certain macro-economic objectives. This may create difficulties for countries which are out of line with the rest. The political agenda may prove to be a stronger driving force than the economic one. Until the currency is more firmly established, it is difficult to tell whether the gains will outweigh the losses for any particular country. Field Research BMW is a major UK employer, with its UK sales and marketing operations at Bracknell, Berkshire, production plants at Hams Hall, Warwickshire, Swindon, Wiltshire and Oxford and Financial Services company in Hook, Hampshire. In January 1994 BMW acquired the Rover Group from British Aerospace. The two companies retained their separate identities, whilst reinforcing the integrated global nature of the BMW Group's presence the world over. Between them, the two companies produced over one million vehicles a year. Despite enormous investment of �3 billion in the Rover Group, its people, production facilities and new models, a combination of downward price pressure, the strength of the pound and lack of consumer confidence in the Rover brand led to continued losses - over �2 million a day in early 2000. With mounting losses and no likelihood of change in the situation it became clear that alternative courses of action to secure the future of BMW were required. ...read more.

Conclusion

Dealerships in the UK will only switch direct to euro pricing when and if the Government make the formal decision to join. BMW (GB) Ltd will then switch to handling all transactions in euros at the same time. However, any customer can pay in euros in the same way as they have been able to pay in any currency in the past. The invoice value would be converted using the daily exchange rate. The euro has no influence whatsoever on BMW pricing policy - so the introduction of the new currency will not make BMW products or services either cheaper or more expensive. Conclusion From the research and the results I have collected, I have come to the conclusion that the introduction of the euro will have no effect on BMW whatsoever, the prices of their products and services will not be cheaper or more expensive, there fore the company will not benefit and will continue to run the business as it was run before the introduction of the single currency. Because the company is financially prepared for the introduction of the euro, it is the company policy not to offer a dual pricing system in the UK because they have not joined the euro currency. Dealerships in the UK will only make the switch to euros when the government decides to join. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level UK, European & Global Economics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level UK, European & Global Economics essays

  1. Marked by a teacher

    The euro has many effects on businesses and the consumers not only within the ...

    4 star(s)

    Therefore creating positive externalities. As you can see there are many positive aspects to the single currency, however this does not tell the whole story. There are also many disadvantages of the euro. Firstly the cost of transitioning 12 countries' currencies over to a single currency is a very big disadvantage.

  2. Free essay

    does uk housing market warrant government intervention

    Property prices rise in areas where employment opportunities expand the fastest. People move to where the work is. And today the most common form of migration is not from the North to London but from Warsaw to London. In the first 18 months since the expansion of the EU in May 2004, 329,000 immigrant workers have registered in Britain.

  1. In what ways is the government attempting to increase the willingness to wor

    Government spending on education and training has improved workers human capital. Employees become better quality workers and therefore their productivity improves and so the LRAS curve shifts to the right. In 2007 Gordon Brown promised to increase spending on education by 5% each year for the next three years in

  2. Advantages and diasadvantages of joining the Euro

    If the UK wishes to borrow money for long-term investment, this would be against the guidelines. Loss of control of UK taxation It is most likely this will not take place immediately but the EMU includes economic as well as monetary union.

  1. Free essay

    Globalisation and changing career patterns

    Many of these IT services providers were American based organisations such as IBM, EDS & CSC - global powerhouses who had built their reputation as market leaders. Globalisation had allowed these companies to compete for business overseas. As part of many outsourcing arrangements, the IT staff of the original company, transferred to the new IT service provider with immediate effect.

  2. Where does the World Trade Organisation fit in the overall scheme of international public ...

    industrial goods. As a result of the Uruguay Round agreements, the WTO goes much wider and comes closer to universal coverage, providing market access rules for the bulk (if not all) of international trade. As important, the agreements go well beyond the coverage of border barriers (tariffs and quotas)

  1. Is there a trade-off between prosperity and violence? If so, what is it? If ...

    and secure the benefits that can be produced by the complementary efforts of those who employ land, labour and capital" (Bates, R, 2001, pg. 25). Therefore, contrary to the neo-liberal assumption that the involvement of the state inherently inhibits growth, it is state power that, in the history of successfully developed countries, has facilitated and secured the development process.

  2. International Trade - I have been asked to investigate the possibility of a company ...

    Quotas are imposed with the aim of stopping or even reversing a negative trend in a country's balance of payments. They are also used as a means of protecting domestic industry from foreign competition. Modern economic thought tends to condemn both quotas and the aims they serve as economically damaging protectionism.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work