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 - – cloud computing is disrupting traditional business models, increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google,
technology disruption, customer relationship management is fast transforming because of increasing concerns over data privacy, 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 -
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.
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.
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.
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.
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.
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.
Operational resilience
– The operational resilience strategy in the European Financial Integration 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.
Learning organization
- European Integration 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 European Integration is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in European Financial Integration Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
High brand equity
– European Integration has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled European Integration to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
Successful track record of launching new products
– European Integration has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. European Integration has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Weaknesses 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.
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.
High bargaining power of channel partners
– Because of the regulatory requirements, Rawi Abdelal, Christopher M. Bruner suggests that, European Integration 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.
No frontier risks strategy
– After analyzing the HBR case study European Financial Integration, it seems that company is thinking about the frontier risks that can impact Global Business strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
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.
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.
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.
Need for greater diversity
– European Integration 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.
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.
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.
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.
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 -
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, European Integration 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.
Using analytics as competitive advantage
– European Integration 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 European Financial Integration - to build a competitive advantage using analytics. The analytics driven competitive advantage can help European Integration to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– European Integration 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.
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.
Better consumer reach
– The expansion of the 5G network will help European Integration to increase its market reach. European Integration 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.
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.
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.
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.
Leveraging digital technologies
– European Integration 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.
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.
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 European Integration 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.
Buying journey improvements
– European Integration can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. European Financial Integration 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.
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 -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study European Financial Integration, European Integration 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 .
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.
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.
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.
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.
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.
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.
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 European Integration in the Global Business sector and impact the bottomline of the organization.
Consumer confidence and its impact on European Integration 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.
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.
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.
Stagnating economy with rate increase
– European Integration 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.
High dependence on third party suppliers
– European Integration 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.
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.
