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 - – increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, digital marketing is dominated by two big players Facebook and Google, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, cloud computing is disrupting traditional business models, increasing household debt because of falling income levels,
technology disruption, there is increasing trade war between United States & China, 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 -
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.
Successful track record of launching new products
– Greece's Eurozone has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Greece's Eurozone 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.
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.
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.
Low bargaining power of suppliers
– Suppliers of Greece's Eurozone in the sector have low bargaining power. Mismanagement of Fiscal Policy: Greece's Achilles' Heel has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Greece's Eurozone to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Greece's Eurozone 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 Mismanagement of Fiscal Policy: Greece's Achilles' Heel - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Greece's Eurozone 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 Greece's Eurozone is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Mismanagement of Fiscal Policy: Greece's Achilles' Heel Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
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.
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.
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.
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 -
High bargaining power of channel partners
– Because of the regulatory requirements, Tulsi Jayakumar suggests that, Greece's Eurozone 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.
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.
High operating costs
– Compare to the competitors, firm in the HBR case study Mismanagement of Fiscal Policy: Greece's Achilles' Heel 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 Greece's Eurozone 's lucrative customers.
Low market penetration in new markets
– Outside its home market of Greece's Eurozone, firm in the HBR case study Mismanagement of Fiscal Policy: Greece's Achilles' Heel needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Greece's Eurozone 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.
Interest costs
– Compare to the competition, Greece's Eurozone has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
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.
Slow decision making process
– As mentioned earlier in the report, Greece's Eurozone has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Greece's Eurozone even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
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 -
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Greece's Eurozone in the consumer business. Now Greece's Eurozone can target international markets with far fewer capital restrictions requirements than the existing system.
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.
Loyalty marketing
– Greece's Eurozone 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.
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.
Developing new processes and practices
– Greece's Eurozone can develop new processes and procedures in Global Business 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.
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. Greece's Eurozone can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Greece's Eurozone can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Mismanagement of Fiscal Policy: Greece's Achilles' Heel suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
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.
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.
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.
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.
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.
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 -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Greece's Eurozone with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
High dependence on third party suppliers
– Greece's Eurozone 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.
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.
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 Greece's Eurozone business can come under increasing regulations regarding data privacy, data security, etc.
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.
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.
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 .
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.
Technology acceleration in Forth Industrial Revolution
– Greece's Eurozone has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Greece's Eurozone needs to keep up with the evolution of technology in the Global Business 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.
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.
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.
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.