Turbulent Times in the Euro Zone SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Turbulent Times in the Euro Zone
Newspaper headlines and editorials revealed the intense attention the euro zone had received in the last few months. The current crisis occurred shortly after Greece announced that its 2009 budget deficit was 13% of GDP-twice as high as previously predicted. For some, this was the beginning of the end for the euro zone. Could it lead to the demise of the euro altogether? Others insisted that expelling Greece might be necessary. In tune with headlines at the time, the exchange markets did not display much confidence in the euro. By summer 2010, the euro had lost at least 10% of its value against the dollar since the beginning of 2010. Financial markets were nervous. What should EU leaders do help stave off a major crisis?
Swot Analysis of "Turbulent Times in the Euro Zone" written by Peter Debaere includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Euro Zone facing as an external strategic factors. Some of the topics covered in Turbulent Times in the Euro Zone case study are - Strategic Management Strategies, and Global Business.
Some of the macro environment factors that can be used to understand the Turbulent Times in the Euro Zone casestudy better are - – increasing energy prices, central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies,
customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Turbulent Times in the Euro Zone
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Turbulent Times in the Euro Zone case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Euro Zone, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Euro Zone 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 Turbulent Times in the Euro Zone can be done for the following purposes –
1. Strategic planning using facts provided in Turbulent Times in the Euro Zone case study
2. Improving business portfolio management of Euro Zone
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 Euro Zone
Strengths Turbulent Times in the Euro Zone | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Euro Zone in Turbulent Times in the Euro Zone Harvard Business Review case study are -
Diverse revenue streams
– Euro Zone is present in almost all the verticals within the industry. This has provided firm in Turbulent Times in the Euro Zone 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.
Learning organization
- Euro Zone 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 Euro Zone is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Turbulent Times in the Euro Zone Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Global Business field
– Euro Zone 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 Euro Zone in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Euro Zone
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Euro Zone does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Euro Zone has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Euro Zone to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Euro Zone 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.
Highly skilled collaborators
– Euro Zone 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 Turbulent Times in the Euro Zone HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Euro Zone is one of the most innovative firm in sector. Manager in Turbulent Times in the Euro Zone Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Strong track record of project management
– Euro Zone 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
– Euro Zone has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Euro Zone 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 Turbulent Times in the Euro Zone 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.
Training and development
– Euro Zone has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Turbulent Times in the Euro Zone 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.
Weaknesses Turbulent Times in the Euro Zone | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Turbulent Times in the Euro Zone are -
Slow to strategic competitive environment developments
– As Turbulent Times in the Euro Zone HBR case study mentions - Euro Zone 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 Euro Zone, firm in the HBR case study Turbulent Times in the Euro Zone needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 Euro Zone supply chain. Even after few cautionary changes mentioned in the HBR case study - Turbulent Times in the Euro Zone, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Euro Zone vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Turbulent Times in the Euro Zone, is just above the industry average. Euro Zone 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.
Need for greater diversity
– Euro Zone has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Lack of clear differentiation of Euro Zone products
– To increase the profitability and margins on the products, Euro Zone needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Euro Zone is dominated by functional specialists. It is not different from other players in the Global Business segment. Euro Zone needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Euro Zone to focus more on services rather than just following the product oriented approach.
Aligning sales with marketing
– It come across in the case study Turbulent Times in the Euro Zone that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Turbulent Times in the Euro Zone can leverage the sales team experience to cultivate customer relationships as Euro Zone is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Euro Zone 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Peter Debaere suggests that, Euro Zone 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 harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Euro Zone is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Turbulent Times in the Euro Zone can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Turbulent Times in the Euro Zone | 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 Turbulent Times in the Euro Zone are -
Better consumer reach
– The expansion of the 5G network will help Euro Zone to increase its market reach. Euro Zone 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Euro Zone is facing challenges because of the dominance of functional experts in the organization. Turbulent Times in the Euro Zone 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 Euro Zone 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.
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 Euro Zone in the consumer business. Now Euro Zone can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Euro Zone has opened avenues for new revenue streams for the organization in the industry. This can help Euro Zone to build a more holistic ecosystem as suggested in the Turbulent Times in the Euro Zone case study. Euro Zone can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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, Euro Zone can use these opportunities to build new business models that can help the communities that Euro Zone operates in. Secondly it can use opportunities from government spending in Global Business sector.
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. Euro Zone can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Euro Zone 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Euro Zone 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 Euro Zone to hire the very best people irrespective of their geographical location.
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. Euro Zone 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. Euro Zone 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.
Building a culture of innovation
– managers at Euro Zone 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 Global Business segment.
Leveraging digital technologies
– Euro Zone 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.
Using analytics as competitive advantage
– Euro Zone 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 Turbulent Times in the Euro Zone - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Euro Zone to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Turbulent Times in the Euro Zone External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Turbulent Times in the Euro Zone are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Euro Zone 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.
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 Euro Zone.
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. Euro Zone can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Euro Zone has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Euro Zone 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.
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 Euro Zone business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Euro Zone 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Euro Zone with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Euro Zone 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. Euro Zone can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Increasing wage structure of Euro Zone
– 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 Euro Zone.
Regulatory challenges
– Euro Zone 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.
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.
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 Euro Zone in the Global Business sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Turbulent Times in the Euro Zone, Euro Zone 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 .
Weighted SWOT Analysis of Turbulent Times in the Euro Zone 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 Turbulent Times in the Euro Zone 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 Turbulent Times in the Euro Zone 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 Turbulent Times in the Euro Zone 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 Turbulent Times in the Euro Zone 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 Euro Zone needs to make to build a sustainable competitive advantage.
