The uncertainty surrounding the government’s likely decisions around Brexit certainly makes forecasting and planning difficult, especially for those businesses with a direct or indirect dependency on the EU for customers, suppliers or labour.  However, despite the fact that the post Brexit business environment is full of risks, there are also ample opportunities.  Now could be the best time to review options and maybe even revisit some of the sacred cows in your business strategy.

Investment decisions, go-to-market strategies and plans will certainly need to be reviewed.  The lack of certainty that we now see in Britain is not new and/or unique to Britain.  Businesses sometimes choose to invest in uncertain and often highly hostile investment environments.  In response, they flex and adapt their business models and where they incur additional costs and/or higher risk, they seek to extract a  higher rate of return on their investment.  Brexit is another element of risk that businesses now need to consider – together with political risk, country risk, currency risk and other risks – when making strategic business decisions.

Hard Brexit, Soft Brexit and the middle ground will each entail different levels of risk and change to the business landscape – tariffs, availability of skills and labour, exchange rates, regulations and more may change.  The most basic tool available to planners, in situations of high uncertainty, is scenario planning.  The idea is to focus on the most likely scenarios and/or scenario combinations and formulate appropriate responses to each. Scenario planning or war games was pioneered by the military as a way to focus minds on, and ensure preparedness for, the most likely situations.

Brexit and the implications of it can be represented by a number of scenarios, the most likely outcomes can be modelled and managed as appropriate.  For example, the possible impact of a weak Pound on imports and exports can be modelled across the supply chain – some businesses might hedge the risk with forward currency contracts and/or explore paying suppliers in a different currency. Given the risk and possible cost burden of new import tariffs, a business with physical stores might seek to focus more on digital instead of physical channels to market due to the potential for cost savings.  If a physical presence is necessary and channel control is of less concern then appointing a local partner under a license or franchise might be an option.  The key to success is in the preparation and planning.  We have already seen the likes of Nissan take a stance by demanding subsidies in anticipation of post Brexit tariffs.   SoftBank recently purchased ARM holdings for $32m, timed to benefit from a weak Pound, in response to other strategic considerations.   Businesses that choose to do nothing may find themselves exposed to manageable risks, yet unprepared and directionless, despite the abundance of opportunity.  Businesses can choose to be proactive and consider Brexit for what it is – risks that can be managed and opportunities to explore and consider as options.

G2Guide 

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