HAMPSTEAD TEA: COPING WITH BREXIT
CASE STUDY SOLUTION
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SYNOPSIS
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In March 2021, the founder of Hampstead Tea, a specialty-tea processor based in London, United Kingdom,
found herself at a crossroads. Since 1995, the founder had been exporting packaged tea to countries in the
European Union (EU) as well as selling it locally in the UK market. But effective December 31, 2020, the
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United Kingdom had exited the EU; in 2021, companies in the two regions could no longer buy and sell
goods freely across their borders. Uncertainty had gripped the flow of trade during the first three months of
tio
the new year. In March 2021, the founder was examining three options going forward: (1) divest the EU
operations and focus on the UK market; (2) continue to cater to both the home market and the UK market,
as before; and (3) relocate to a geography within the EU to focus on EU markets.
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The Case Solution Starts From page 5
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ASSIGNMENT QUESTIONS
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1. What is your appraisal of Hampstead as a business entity?
2. What is your assessment of the context surrounding Brexit?
3. What should Tawadey do, going forward?
4. What is the linkage between effectuation principles and the dilemmas that the founder of Hampstead is
facing on the way forward for her business?
ANALYSIS OF ISSUES
1. What is your appraisal of Hampstead as a business entity?
The Case Solution Starts From page 5
,2. What is your assessment of the context surrounding Brexit?
First the big picture. When the United Kingdom was a member of the EU during 1973–2020, companies
based in the United Kingdom could buy and sell goods freely across national borders within the EU. There
were no customs duties on goods and no quotas drawing limits on trade volume. Notwithstanding its
benefits, there were periodic rumblings in Britain about EU membership for three reasons: First, EU laws
were overriding the laws made by British Parliament, and British firms had become takeover targets of
European firms. Britain was thus perceived by many of its citizens to be forfeiting its national sovereignty.
Second, many British citizens were also unhappy about the pressure imposed by EU immigrants over local
jobs, wages, housing, infrastructure, and public services. And last, Britain was paying more into the EU
budget than it was getting in return.
The growing exasperation in the United Kingdom had led to a public referendum in July 2016 on whether
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The Case Solution Starts From page 5
, EXHIBIT -1: CAUSAL VERSUS EFFECTUAL REASONING
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The Case Solution Starts From page 5
CASE STUDY SOLUTION
e
pl
SYNOPSIS
m
Sa
In March 2021, the founder of Hampstead Tea, a specialty-tea processor based in London, United Kingdom,
found herself at a crossroads. Since 1995, the founder had been exporting packaged tea to countries in the
European Union (EU) as well as selling it locally in the UK market. But effective December 31, 2020, the
n
United Kingdom had exited the EU; in 2021, companies in the two regions could no longer buy and sell
goods freely across their borders. Uncertainty had gripped the flow of trade during the first three months of
tio
the new year. In March 2021, the founder was examining three options going forward: (1) divest the EU
operations and focus on the UK market; (2) continue to cater to both the home market and the UK market,
as before; and (3) relocate to a geography within the EU to focus on EU markets.
lu
So
The Case Solution Starts From page 5
, e
pl
m
Sa
n
tio
lu
ASSIGNMENT QUESTIONS
So
1. What is your appraisal of Hampstead as a business entity?
2. What is your assessment of the context surrounding Brexit?
3. What should Tawadey do, going forward?
4. What is the linkage between effectuation principles and the dilemmas that the founder of Hampstead is
facing on the way forward for her business?
ANALYSIS OF ISSUES
1. What is your appraisal of Hampstead as a business entity?
The Case Solution Starts From page 5
,2. What is your assessment of the context surrounding Brexit?
First the big picture. When the United Kingdom was a member of the EU during 1973–2020, companies
based in the United Kingdom could buy and sell goods freely across national borders within the EU. There
were no customs duties on goods and no quotas drawing limits on trade volume. Notwithstanding its
benefits, there were periodic rumblings in Britain about EU membership for three reasons: First, EU laws
were overriding the laws made by British Parliament, and British firms had become takeover targets of
European firms. Britain was thus perceived by many of its citizens to be forfeiting its national sovereignty.
Second, many British citizens were also unhappy about the pressure imposed by EU immigrants over local
jobs, wages, housing, infrastructure, and public services. And last, Britain was paying more into the EU
budget than it was getting in return.
The growing exasperation in the United Kingdom had led to a public referendum in July 2016 on whether
e
pl
m
Sa
n
tio
lu
So
The Case Solution Starts From page 5
, EXHIBIT -1: CAUSAL VERSUS EFFECTUAL REASONING
e
pl
m
Sa
n
tio
lu
So
The Case Solution Starts From page 5
