Case Study Description of European Financial Integration
Provides background on the history and status of financial integration in the European Union. Describes the pertinent treaty-based "fundamental freedoms," emphasizes challenges to further cross-border consolidation in the banking sector, and examines the regulatory role of the European Commission in fostering conditions conducive to further financial integration.
Swot Analysis of "European Financial Integration" written by Rawi Abdelal, Christopher M. Bruner includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that European Integration facing as an external strategic factors. Some of the topics covered in European Financial Integration case study are - Strategic Management Strategies, Mergers & acquisitions, Regulation and Global Business.
Some of the macro environment factors that can be used to understand the European Financial Integration casestudy better are - – central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, wage bills are increasing, digital marketing is dominated by two big players Facebook and Google,
cloud computing is disrupting traditional business models, increasing energy prices, etc
Introduction to SWOT Analysis of European Financial Integration
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in European Financial Integration case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the European Integration, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which European Integration 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 European Financial Integration can be done for the following purposes –
1. Strategic planning using facts provided in European Financial Integration case study
2. Improving business portfolio management of European Integration
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 European Integration
Strengths European Financial Integration | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of European Integration in European Financial Integration Harvard Business Review case study are -
Effective Research and Development (R&D)
– European Integration 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 European Financial Integration - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of European Integration
– The covid-19 pandemic has put organizational resilience at the centre of everthing that European Integration does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For European Integration digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. European Integration 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.
Innovation driven organization
– European Integration is one of the most innovative firm in sector. Manager in European Financial Integration Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Diverse revenue streams
– European Integration is present in almost all the verticals within the industry. This has provided firm in European Financial Integration 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.
Superior customer experience
– The customer experience strategy of European Integration in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that European Integration 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.
Sustainable margins compare to other players in Global Business industry
– European Financial Integration firm has clearly differentiated products in the market place. This has enabled European Integration to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped European Integration to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the European Integration 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.
Training and development
– European Integration has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in European Financial Integration 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.
Low bargaining power of suppliers
– Suppliers of European Integration in the sector have low bargaining power. European Financial Integration has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps European Integration to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– European Integration is one of the leading recruiters in the industry. Managers in the European Financial Integration are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses European Financial Integration | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of European Financial Integration are -
Aligning sales with marketing
– It come across in the case study European Financial Integration 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 European Financial Integration can leverage the sales team experience to cultivate customer relationships as European Integration is planning to shift buying processes online.
High cash cycle compare to competitors
European Integration has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Increasing silos among functional specialists
– The organizational structure of European Integration is dominated by functional specialists. It is not different from other players in the Global Business segment. European Integration needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help European Integration to focus more on services rather than just following the product oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the European Financial Integration 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 European Integration has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, European Integration 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.
Products dominated business model
– Even though European Integration 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 - European Financial Integration should strive to include more intangible value offerings along with its core products and services.
Workers concerns about automation
– As automation is fast increasing in the segment, European Integration needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High 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 European Integration supply chain. Even after few cautionary changes mentioned in the HBR case study - European Financial Integration, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left European Integration vulnerable to further global disruptions in South East Asia.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study European Financial Integration, it seems that the employees of European Integration 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.
Slow to strategic competitive environment developments
– As European Financial Integration HBR case study mentions - European Integration 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.
Lack of clear differentiation of European Integration products
– To increase the profitability and margins on the products, European Integration needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities European Financial Integration | 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 European Financial Integration are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for European Integration 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, European Integration 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, European Financial Integration, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. European Integration can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, European Integration can use these opportunities to build new business models that can help the communities that European Integration operates in. Secondly it can use opportunities from government spending in Global Business sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, European Integration is facing challenges because of the dominance of functional experts in the organization. European Financial Integration 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.
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. European Integration 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. European Integration 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. European Integration can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects European Integration can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Learning at scale
– Online learning technologies has now opened space for European Integration 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.
Creating value in data economy
– The success of analytics program of European Integration has opened avenues for new revenue streams for the organization in the industry. This can help European Integration to build a more holistic ecosystem as suggested in the European Financial Integration case study. European Integration can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 European Integration in the consumer business. Now European Integration can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– European Integration 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 European Integration 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 European Integration to hire the very best people irrespective of their geographical location.
Threats European Financial Integration External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study European Financial Integration are -
Shortening product life cycle
– it is one of the major threat that European Integration is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents European Integration with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for European Integration 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.
Regulatory challenges
– European Integration 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, European Integration 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 European Financial Integration .
Increasing wage structure of European Integration
– 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 European Integration.
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 European Integration business can come under increasing regulations regarding data privacy, data security, etc.
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. European Integration can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. European Integration needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
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. European Integration 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.
Environmental challenges
– European Integration 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. European Integration can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Technology acceleration in Forth Industrial Revolution
– European Integration has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, European Integration 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.
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 European Integration.
Weighted SWOT Analysis of European Financial Integration 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 European Financial Integration 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 European Financial Integration 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 European Financial Integration 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 European Financial Integration 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 European Integration needs to make to build a sustainable competitive advantage.