Business Management Chapters

Impact of polices of the European Union on Harrods

European Union plays an important role in influencing the business in most of the companies in UK including Sainsbury. Some of the policies are discussed below.

Freedom of movement of goods and services: The movement of goods and service was made free according to the EU since 1957 when the Treaty of Rome was signed. Reducing the barriers has resulted in increase of market and provides Sainsbury a larger market to target and also reduces the price which helps in increasing the purchasing power of consumer.

Freedom of movement of capital and labour: Another important benefit provided by EU is the freedom of movement of capital and labour. Thus, labour can move freely where job opportunities are more. Hence Sainsbury can offer new job opportunities to wider range of people and will have more diversified workforce to operate with which is important when the company operates in different parts of the world. Freedom of movement of capital also helps Sainsbury to invest wherever they wish to and open new stores wherever they like without any discrimination.

Sovereignty implications of Single Market: Another importantpolicy is the existence of Single Market among EU member States. Thus, itprovide Sainsbury to come out of Oligopoly type of market structure thatprevails in UK retail sector and gives them wide market to operate. Singlemarket eliminates the way differences exist in the functioning of market indifferent countries. It helps in standardizing the quality of product,strengthens competition, protect the consumer, etc.