Case Study Description of Groupe Eurotunnel S.A. (A)
In the summer of 2006 the chairman and CEO of Eurotunnel Group is faced with the decision whether to file for bankruptcy protection, after having failed to gain creditor approval of an ambitious out-of-court restructuring plan. The company, which has been attempting to restructure its debt and operations for the last ten years, faces a number of daunting challenges. Eurotunnel is jointly listed in the U.K. and France, and its shareholders, who are largely based in France, face the prospect of significant dilution under any restructuring plan. The current chairman and CEO has been with the company for only a year-and-a half, following a decade of senior management turbulence in which the company has seen nine different CEOs and chairmen. Eurotunnel's capital structure is staggeringly complex, and a large fraction of its debt has come to be held by U.S.-based hedge funds that specialize in investing in distressed companies. Finally, Eurotunnel's business is extremely challenging to value, and is faced with significant competition. If the current chairman/CEO decides to file for bankruptcy, he faces the additional choice whether to file for bankruptcy in the U.K. or in France, which take quite different approaches to restructuring troubled companies.
Authors :: Stuart C. Gilson, Vincent Dessain, Sarah L. Abbott
Swot Analysis of "Groupe Eurotunnel S.A. (A)" written by Stuart C. Gilson, Vincent Dessain, Sarah L. Abbott includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Eurotunnel Eurotunnel's facing as an external strategic factors. Some of the topics covered in Groupe Eurotunnel S.A. (A) case study are - Strategic Management Strategies, Financial management, International business, Reorganization, Risk management and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Groupe Eurotunnel S.A. (A) casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, technology disruption, talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic ,
there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Groupe Eurotunnel S.A. (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Groupe Eurotunnel S.A. (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Eurotunnel Eurotunnel's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Eurotunnel Eurotunnel's 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 Groupe Eurotunnel S.A. (A) can be done for the following purposes –
1. Strategic planning using facts provided in Groupe Eurotunnel S.A. (A) case study
2. Improving business portfolio management of Eurotunnel Eurotunnel's
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Eurotunnel Eurotunnel's
Strengths Groupe Eurotunnel S.A. (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Eurotunnel Eurotunnel's in Groupe Eurotunnel S.A. (A) Harvard Business Review case study are -
Diverse revenue streams
– Eurotunnel Eurotunnel's is present in almost all the verticals within the industry. This has provided firm in Groupe Eurotunnel S.A. (A) case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Analytics focus
– Eurotunnel Eurotunnel's is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Stuart C. Gilson, Vincent Dessain, Sarah L. Abbott can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Ability to recruit top talent
– Eurotunnel Eurotunnel's is one of the leading recruiters in the industry. Managers in the Groupe Eurotunnel S.A. (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Eurotunnel Eurotunnel's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Eurotunnel Eurotunnel's 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.
Operational resilience
– The operational resilience strategy in the Groupe Eurotunnel S.A. (A) 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.
High brand equity
– Eurotunnel Eurotunnel's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Eurotunnel Eurotunnel's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Eurotunnel Eurotunnel's 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 Groupe Eurotunnel S.A. (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Eurotunnel Eurotunnel's 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 Eurotunnel Eurotunnel's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Groupe Eurotunnel S.A. (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Eurotunnel Eurotunnel's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Groupe Eurotunnel S.A. (A) Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Sustainable margins compare to other players in Finance & Accounting industry
– Groupe Eurotunnel S.A. (A) firm has clearly differentiated products in the market place. This has enabled Eurotunnel Eurotunnel's to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Eurotunnel Eurotunnel's to invest into research and development (R&D) and innovation.
Strong track record of project management
– Eurotunnel Eurotunnel's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Eurotunnel Eurotunnel's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Eurotunnel Eurotunnel's 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.
Weaknesses Groupe Eurotunnel S.A. (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Groupe Eurotunnel S.A. (A) are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Groupe Eurotunnel S.A. (A) 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 Eurotunnel Eurotunnel's has relatively successful track record of launching new products.
Lack of clear differentiation of Eurotunnel Eurotunnel's products
– To increase the profitability and margins on the products, Eurotunnel Eurotunnel's needs to provide more differentiated products than what it is currently offering in the marketplace.
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 Eurotunnel Eurotunnel's supply chain. Even after few cautionary changes mentioned in the HBR case study - Groupe Eurotunnel S.A. (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Eurotunnel Eurotunnel's vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners
– Because of the regulatory requirements, Stuart C. Gilson, Vincent Dessain, Sarah L. Abbott suggests that, Eurotunnel Eurotunnel's 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Eurotunnel Eurotunnel's 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.
Increasing silos among functional specialists
– The organizational structure of Eurotunnel Eurotunnel's is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Eurotunnel Eurotunnel's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Eurotunnel Eurotunnel's to focus more on services rather than just following the product oriented approach.
Skills based hiring
– The stress on hiring functional specialists at Eurotunnel Eurotunnel's has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Groupe Eurotunnel S.A. (A), is just above the industry average. Eurotunnel Eurotunnel's needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High operating costs
– Compare to the competitors, firm in the HBR case study Groupe Eurotunnel S.A. (A) has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Eurotunnel Eurotunnel's 's lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Eurotunnel Eurotunnel's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Groupe Eurotunnel S.A. (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– After analyzing the HBR case study Groupe Eurotunnel S.A. (A), it seems that company is thinking about the frontier risks that can impact Finance & Accounting strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Opportunities Groupe Eurotunnel S.A. (A) | 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 Groupe Eurotunnel S.A. (A) are -
Learning at scale
– Online learning technologies has now opened space for Eurotunnel Eurotunnel's 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.
Better consumer reach
– The expansion of the 5G network will help Eurotunnel Eurotunnel's to increase its market reach. Eurotunnel Eurotunnel's 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.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Eurotunnel Eurotunnel's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Eurotunnel Eurotunnel's has opened avenues for new revenue streams for the organization in the industry. This can help Eurotunnel Eurotunnel's to build a more holistic ecosystem as suggested in the Groupe Eurotunnel S.A. (A) case study. Eurotunnel Eurotunnel's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Eurotunnel Eurotunnel's in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Leveraging digital technologies
– Eurotunnel Eurotunnel's 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Eurotunnel Eurotunnel's can use these opportunities to build new business models that can help the communities that Eurotunnel Eurotunnel's operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Eurotunnel Eurotunnel's 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. Eurotunnel Eurotunnel's 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Eurotunnel Eurotunnel's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Eurotunnel Eurotunnel's 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 Finance & Accounting segment.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Eurotunnel Eurotunnel's to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Manufacturing automation
– Eurotunnel Eurotunnel's can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Low interest rates
– Even though inflation is raising its head in most developed economies, Eurotunnel Eurotunnel's can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Threats Groupe Eurotunnel S.A. (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Groupe Eurotunnel S.A. (A) are -
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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. Eurotunnel Eurotunnel's 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.
Stagnating economy with rate increase
– Eurotunnel Eurotunnel's 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Eurotunnel Eurotunnel's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Eurotunnel Eurotunnel's 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. Eurotunnel Eurotunnel's can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Eurotunnel Eurotunnel's needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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 Eurotunnel Eurotunnel's.
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 Eurotunnel Eurotunnel's in the Finance & Accounting sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Eurotunnel Eurotunnel's high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Regulatory challenges
– Eurotunnel Eurotunnel's 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 Finance & Accounting industry regulations.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Eurotunnel Eurotunnel's business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Eurotunnel Eurotunnel's in the Finance & Accounting industry. The Finance & Accounting 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Eurotunnel Eurotunnel's 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 Groupe Eurotunnel S.A. (A) .
Weighted SWOT Analysis of Groupe Eurotunnel S.A. (A) 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 Groupe Eurotunnel S.A. (A) 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 Groupe Eurotunnel S.A. (A) 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 Groupe Eurotunnel S.A. (A) 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 Groupe Eurotunnel S.A. (A) 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 Eurotunnel Eurotunnel's needs to make to build a sustainable competitive advantage.
