Case Study Description of EUROCAP Bank: Bonuses Driving Performance or Driving Discontent
By March 2000's first quarter evaluation, it was evident that EUROCAP Equities Japan had performed beyond expectations. Its primary year-2000 objective was to become the top-choice broker for its client for Japanese equities. However, when bonuses were handed out in March for 1999's performance, two key research analysts threatened to resign and the team was overall dispirited, as bonuses were lower than expected and lower than industry payouts. Key issues facing EUROCAP Equities Japan management included: How would key employees' expectations be managed in 2000? How was EUROCAP Equities Japan going to retain its employees in a bull-run with competitive pressures on the small local resource pool? How would employees be motivated through compensation packages, and what other methods would be used to make employees excel in their performance and thrust EUROCAP Equities Japan's performance into the limelight?
Authors :: Gilbert Wong, Heather McGregor, Shamza Khan, Pauline Ng
Swot Analysis of "EUROCAP Bank: Bonuses Driving Performance or Driving Discontent" written by Gilbert Wong, Heather McGregor, Shamza Khan, Pauline Ng includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Eurocap Equities facing as an external strategic factors. Some of the topics covered in EUROCAP Bank: Bonuses Driving Performance or Driving Discontent case study are - Strategic Management Strategies, Motivating people and Organizational Development.
Some of the macro environment factors that can be used to understand the EUROCAP Bank: Bonuses Driving Performance or Driving Discontent casestudy better are - – increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%, customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google,
talent flight as more people leaving formal jobs, increasing commodity prices, etc
Introduction to SWOT Analysis of EUROCAP Bank: Bonuses Driving Performance or Driving Discontent
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in EUROCAP Bank: Bonuses Driving Performance or Driving Discontent case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Eurocap Equities, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Eurocap Equities operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of EUROCAP Bank: Bonuses Driving Performance or Driving Discontent can be done for the following purposes –
1. Strategic planning using facts provided in EUROCAP Bank: Bonuses Driving Performance or Driving Discontent case study
2. Improving business portfolio management of Eurocap Equities
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Eurocap Equities
Strengths EUROCAP Bank: Bonuses Driving Performance or Driving Discontent | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Eurocap Equities in EUROCAP Bank: Bonuses Driving Performance or Driving Discontent Harvard Business Review case study are -
Learning organization
- Eurocap Equities is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Eurocap Equities is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in EUROCAP Bank: Bonuses Driving Performance or Driving Discontent Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Eurocap Equities digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Eurocap Equities has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Sustainable margins compare to other players in Organizational Development industry
– EUROCAP Bank: Bonuses Driving Performance or Driving Discontent firm has clearly differentiated products in the market place. This has enabled Eurocap Equities to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Eurocap Equities to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Eurocap Equities has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Ability to lead change in Organizational Development field
– Eurocap Equities is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Eurocap Equities in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Eurocap Equities in the sector have low bargaining power. EUROCAP Bank: Bonuses Driving Performance or Driving Discontent has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Eurocap Equities to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Eurocap Equities has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in EUROCAP Bank: Bonuses Driving Performance or Driving Discontent HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Eurocap Equities is one of the most innovative firm in sector. Manager in EUROCAP Bank: Bonuses Driving Performance or Driving Discontent Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Successful track record of launching new products
– Eurocap Equities has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Eurocap Equities has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Operational resilience
– The operational resilience strategy in the EUROCAP Bank: Bonuses Driving Performance or Driving Discontent Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Effective Research and Development (R&D)
– Eurocap Equities has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study EUROCAP Bank: Bonuses Driving Performance or Driving Discontent - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Eurocap Equities has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Eurocap Equities to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses EUROCAP Bank: Bonuses Driving Performance or Driving Discontent | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of EUROCAP Bank: Bonuses Driving Performance or Driving Discontent are -
Products dominated business model
– Even though Eurocap Equities has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - EUROCAP Bank: Bonuses Driving Performance or Driving Discontent should strive to include more intangible value offerings along with its core products and services.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Eurocap Equities supply chain. Even after few cautionary changes mentioned in the HBR case study - EUROCAP Bank: Bonuses Driving Performance or Driving Discontent, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Eurocap Equities vulnerable to further global disruptions in South East Asia.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the EUROCAP Bank: Bonuses Driving Performance or Driving Discontent HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Eurocap Equities has relatively successful track record of launching new products.
Lack of clear differentiation of Eurocap Equities products
– To increase the profitability and margins on the products, Eurocap Equities needs to provide more differentiated products than what it is currently offering in the marketplace.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study EUROCAP Bank: Bonuses Driving Performance or Driving Discontent, in the dynamic environment Eurocap Equities has struggled to respond to the nimble upstart competition. Eurocap Equities has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High bargaining power of channel partners
– Because of the regulatory requirements, Gilbert Wong, Heather McGregor, Shamza Khan, Pauline Ng suggests that, Eurocap Equities is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Slow to strategic competitive environment developments
– As EUROCAP Bank: Bonuses Driving Performance or Driving Discontent HBR case study mentions - Eurocap Equities takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Low market penetration in new markets
– Outside its home market of Eurocap Equities, firm in the HBR case study EUROCAP Bank: Bonuses Driving Performance or Driving Discontent needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Workers concerns about automation
– As automation is fast increasing in the segment, Eurocap Equities needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High cash cycle compare to competitors
Eurocap Equities has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study EUROCAP Bank: Bonuses Driving Performance or Driving Discontent, it seems that the employees of Eurocap Equities don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Opportunities EUROCAP Bank: Bonuses Driving Performance or Driving Discontent | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study EUROCAP Bank: Bonuses Driving Performance or Driving Discontent are -
Building a culture of innovation
– managers at Eurocap Equities can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Organizational Development segment.
Loyalty marketing
– Eurocap Equities has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Creating value in data economy
– The success of analytics program of Eurocap Equities has opened avenues for new revenue streams for the organization in the industry. This can help Eurocap Equities to build a more holistic ecosystem as suggested in the EUROCAP Bank: Bonuses Driving Performance or Driving Discontent case study. Eurocap Equities can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Eurocap Equities to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Eurocap Equities to hire the very best people irrespective of their geographical location.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Eurocap Equities is facing challenges because of the dominance of functional experts in the organization. EUROCAP Bank: Bonuses Driving Performance or Driving Discontent case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Learning at scale
– Online learning technologies has now opened space for Eurocap Equities to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Eurocap Equities can use these opportunities to build new business models that can help the communities that Eurocap Equities operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Better consumer reach
– The expansion of the 5G network will help Eurocap Equities to increase its market reach. Eurocap Equities will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Developing new processes and practices
– Eurocap Equities can develop new processes and procedures in Organizational Development industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Organizational Development industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Eurocap Equities can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Eurocap Equities can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Eurocap Equities in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Organizational Development segment, and it will provide faster access to the consumers.
Leveraging digital technologies
– Eurocap Equities can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Eurocap Equities can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, EUROCAP Bank: Bonuses Driving Performance or Driving Discontent, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats EUROCAP Bank: Bonuses Driving Performance or Driving Discontent External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study EUROCAP Bank: Bonuses Driving Performance or Driving Discontent are -
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Eurocap Equities in the Organizational Development sector and impact the bottomline of the organization.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Eurocap Equities.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study EUROCAP Bank: Bonuses Driving Performance or Driving Discontent, Eurocap Equities may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Organizational Development .
Environmental challenges
– Eurocap Equities needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Eurocap Equities can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Eurocap Equities in the Organizational Development industry. The Organizational Development industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Consumer confidence and its impact on Eurocap Equities demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Easy access to finance
– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Eurocap Equities can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Eurocap Equities can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study EUROCAP Bank: Bonuses Driving Performance or Driving Discontent .
Increasing wage structure of Eurocap Equities
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Eurocap Equities.
Regulatory challenges
– Eurocap Equities needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Organizational Development industry regulations.
Stagnating economy with rate increase
– Eurocap Equities can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Technology acceleration in Forth Industrial Revolution
– Eurocap Equities has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Eurocap Equities needs to keep up with the evolution of technology in the Organizational Development sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Eurocap Equities will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Weighted SWOT Analysis of EUROCAP Bank: Bonuses Driving Performance or Driving Discontent Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study EUROCAP Bank: Bonuses Driving Performance or Driving Discontent needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study EUROCAP Bank: Bonuses Driving Performance or Driving Discontent is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study EUROCAP Bank: Bonuses Driving Performance or Driving Discontent is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of EUROCAP Bank: Bonuses Driving Performance or Driving Discontent is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Eurocap Equities needs to make to build a sustainable competitive advantage.
