Case Study Description of Mismanagement of Fiscal Policy: Greece's Achilles' Heel
In December 2016, the debt-stricken Greek government announced the distribution of a sizeable "Christmas gift" to its low-income pensioners, a one-time bonus that would cost the government a??617 million. This cost was in addition to suspending increases in the value-added tax on some Greek islands. These plans were in clear violation of the terms of a bailout provided to Greece by Eurozone nations in 2015, which required Greece to implement austerity measures and achieve specific fiscal targets. What was the reason for Greece's economic troubles and why did Greece's debt-to-GDP (gross domestic product) ratio climb to its current three-digit figure? Faced with an imminent exit from the Eurozone, how could the country's government solve Greece's longstanding fiscal problems? Tulsi Jayakumar is affiliated with SP Jain Institute of Management & Research.
Swot Analysis of "Mismanagement of Fiscal Policy: Greece's Achilles' Heel" written by Tulsi Jayakumar includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Greece's Eurozone facing as an external strategic factors. Some of the topics covered in Mismanagement of Fiscal Policy: Greece's Achilles' Heel case study are - Strategic Management Strategies, Policy, Recession and Global Business.
Some of the macro environment factors that can be used to understand the Mismanagement of Fiscal Policy: Greece's Achilles' Heel casestudy better are - – there is increasing trade war between United States & China, talent flight as more people leaving formal jobs, technology disruption, there is backlash against globalization, increasing transportation and logistics costs, increasing energy prices, geopolitical disruptions,
banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Mismanagement of Fiscal Policy: Greece's Achilles' Heel
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Mismanagement of Fiscal Policy: Greece's Achilles' Heel case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Greece's Eurozone, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Greece's Eurozone 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 Mismanagement of Fiscal Policy: Greece's Achilles' Heel can be done for the following purposes –
1. Strategic planning using facts provided in Mismanagement of Fiscal Policy: Greece's Achilles' Heel case study
2. Improving business portfolio management of Greece's Eurozone
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Greece's Eurozone
Strengths Mismanagement of Fiscal Policy: Greece's Achilles' Heel | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Greece's Eurozone in Mismanagement of Fiscal Policy: Greece's Achilles' Heel Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Greece's Eurozone are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Ability to lead change in Global Business field
– Greece's Eurozone 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 Greece's Eurozone in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Greece's Eurozone 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 Mismanagement of Fiscal Policy: Greece's Achilles' Heel HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Greece's Eurozone 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 Tulsi Jayakumar 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.
High switching costs
– The high switching costs that Greece's Eurozone 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.
High brand equity
– Greece's Eurozone has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Greece's Eurozone to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy in the Mismanagement of Fiscal Policy: Greece's Achilles' Heel 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.
Superior customer experience
– The customer experience strategy of Greece's Eurozone in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Greece's Eurozone is one of the leading recruiters in the industry. Managers in the Mismanagement of Fiscal Policy: Greece's Achilles' Heel are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Global Business industry
– Mismanagement of Fiscal Policy: Greece's Achilles' Heel firm has clearly differentiated products in the market place. This has enabled Greece's Eurozone to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Greece's Eurozone to invest into research and development (R&D) and innovation.
Training and development
– Greece's Eurozone has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Mismanagement of Fiscal Policy: Greece's Achilles' Heel 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.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Greece's Eurozone digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Greece's Eurozone 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.
Weaknesses Mismanagement of Fiscal Policy: Greece's Achilles' Heel | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Mismanagement of Fiscal Policy: Greece's Achilles' Heel are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Mismanagement of Fiscal Policy: Greece's Achilles' Heel, is just above the industry average. Greece's Eurozone 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.
Lack of clear differentiation of Greece's Eurozone products
– To increase the profitability and margins on the products, Greece's Eurozone needs to provide more differentiated products than what it is currently offering in the marketplace.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Mismanagement of Fiscal Policy: Greece's Achilles' Heel, it seems that the employees of Greece's Eurozone 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Mismanagement of Fiscal Policy: Greece's Achilles' Heel 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 Greece's Eurozone has relatively successful track record of launching new products.
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 Greece's Eurozone supply chain. Even after few cautionary changes mentioned in the HBR case study - Mismanagement of Fiscal Policy: Greece's Achilles' Heel, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Greece's Eurozone vulnerable to further global disruptions in South East Asia.
Skills based hiring
– The stress on hiring functional specialists at Greece's Eurozone 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.
Increasing silos among functional specialists
– The organizational structure of Greece's Eurozone is dominated by functional specialists. It is not different from other players in the Global Business segment. Greece's Eurozone needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Greece's Eurozone to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Greece's Eurozone has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Slow to strategic competitive environment developments
– As Mismanagement of Fiscal Policy: Greece's Achilles' Heel HBR case study mentions - Greece's Eurozone 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Greece's Eurozone is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Mismanagement of Fiscal Policy: Greece's Achilles' Heel can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Products dominated business model
– Even though Greece's Eurozone 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 - Mismanagement of Fiscal Policy: Greece's Achilles' Heel should strive to include more intangible value offerings along with its core products and services.
Opportunities Mismanagement of Fiscal Policy: Greece's Achilles' Heel | 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 Mismanagement of Fiscal Policy: Greece's Achilles' Heel are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Greece's Eurozone 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 Greece's Eurozone to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Greece's Eurozone has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Mismanagement of Fiscal Policy: Greece's Achilles' Heel - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Greece's Eurozone to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Greece's Eurozone 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. Greece's Eurozone 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Greece's Eurozone 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Greece's Eurozone is facing challenges because of the dominance of functional experts in the organization. Mismanagement of Fiscal Policy: Greece's Achilles' Heel 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Greece's Eurozone in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Greece's Eurozone 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, Mismanagement of Fiscal Policy: Greece's Achilles' Heel, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Greece's Eurozone 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.
Better consumer reach
– The expansion of the 5G network will help Greece's Eurozone to increase its market reach. Greece's Eurozone 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Greece's Eurozone can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Greece's Eurozone 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.
Creating value in data economy
– The success of analytics program of Greece's Eurozone has opened avenues for new revenue streams for the organization in the industry. This can help Greece's Eurozone to build a more holistic ecosystem as suggested in the Mismanagement of Fiscal Policy: Greece's Achilles' Heel case study. Greece's Eurozone can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Greece's Eurozone 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.
Threats Mismanagement of Fiscal Policy: Greece's Achilles' Heel External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Mismanagement of Fiscal Policy: Greece's Achilles' Heel 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 Greece's Eurozone in the Global Business sector and impact the bottomline of the organization.
Environmental challenges
– Greece's Eurozone 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. Greece's Eurozone can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Greece's Eurozone in the Global Business industry. The Global Business 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, Greece's Eurozone 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 Mismanagement of Fiscal Policy: Greece's Achilles' Heel .
Consumer confidence and its impact on Greece's Eurozone 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.
Stagnating economy with rate increase
– Greece's Eurozone 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.
Regulatory challenges
– Greece's Eurozone 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 Global Business industry regulations.
Shortening product life cycle
– it is one of the major threat that Greece's Eurozone is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Greece's Eurozone.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Greece's Eurozone can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Mismanagement of Fiscal Policy: Greece's Achilles' Heel, Greece's Eurozone may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
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. Greece's Eurozone needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Mismanagement of Fiscal Policy: Greece's Achilles' Heel 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 Mismanagement of Fiscal Policy: Greece's Achilles' Heel 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 Mismanagement of Fiscal Policy: Greece's Achilles' Heel 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 Mismanagement of Fiscal Policy: Greece's Achilles' Heel 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 Mismanagement of Fiscal Policy: Greece's Achilles' Heel 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 Greece's Eurozone needs to make to build a sustainable competitive advantage.