Euro Zone Convergence, Divergence...and Then What? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Euro Zone Convergence, Divergence...and Then What?
A hedge-fund strategist had two decisions to make. First, what was the path of core euro zone long-term interest rates likely to be over the next year? Was the dramatic decline in German long rates over the past two years an aberration that would soon be reversed, or was it part of the "new normal" that would persist for some time? Second, how would periphery long rates evolve relative to core rates? That is-the spread between long rates in the likes of Greece, Spain, and Ireland and those in Germany-how would they evolve over the next year? Was the dramatic divergence in euro zone long rates likely to persist, or would the coming year see a reconvergence? He knew many factors influenced long-term interest rates; he would have to use his entire toolkit to address this issue. The evidence was in no way clear-cut. Some factors pointed toward lower German rates, some toward higher, some toward a widening of euro zone spreads (even a dissolution of the euro zone as we know it?), and some toward reconvergence. To form an opinion on the likely paths of euro zone long rates, he would have to sort through mounds of information.
Swot Analysis of "Euro Zone Convergence, Divergence...and Then What?" written by Francis Warnock, Peter Debaere includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Zone Rates facing as an external strategic factors. Some of the topics covered in Euro Zone Convergence, Divergence...and Then What? case study are - Strategic Management Strategies, Financial markets, International business and Global Business.
Some of the macro environment factors that can be used to understand the Euro Zone Convergence, Divergence...and Then What? casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, cloud computing is disrupting traditional business models, increasing commodity prices, challanges to central banks by blockchain based private currencies, increasing government debt because of Covid-19 spendings,
increasing inequality as vast percentage of new income is going to the top 1%, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Euro Zone Convergence, Divergence...and Then What?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Euro Zone Convergence, Divergence...and Then What? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Zone Rates, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Zone Rates 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 Euro Zone Convergence, Divergence...and Then What? can be done for the following purposes –
1. Strategic planning using facts provided in Euro Zone Convergence, Divergence...and Then What? case study
2. Improving business portfolio management of Zone Rates
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 Zone Rates
Strengths Euro Zone Convergence, Divergence...and Then What? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Zone Rates in Euro Zone Convergence, Divergence...and Then What? Harvard Business Review case study are -
Sustainable margins compare to other players in Global Business industry
– Euro Zone Convergence, Divergence...and Then What? firm has clearly differentiated products in the market place. This has enabled Zone Rates to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Zone Rates to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Zone Rates 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 Euro Zone Convergence, Divergence...and Then What? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy in the Euro Zone Convergence, Divergence...and Then What? 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.
Analytics focus
– Zone Rates is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Francis Warnock, Peter Debaere can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Superior customer experience
– The customer experience strategy of Zone Rates in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Zone Rates
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Zone Rates does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Global Business field
– Zone Rates 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 Zone Rates in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Zone Rates is one of the leading recruiters in the industry. Managers in the Euro Zone Convergence, Divergence...and Then What? are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Effective Research and Development (R&D)
– Zone Rates 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 Euro Zone Convergence, Divergence...and Then What? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Zone Rates 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
– Zone Rates has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Euro Zone Convergence, Divergence...and Then What? Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Zone Rates digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Zone Rates has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Weaknesses Euro Zone Convergence, Divergence...and Then What? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Euro Zone Convergence, Divergence...and Then What? are -
Skills based hiring
– The stress on hiring functional specialists at Zone Rates 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Zone Rates is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Euro Zone Convergence, Divergence...and Then What? can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, firm in the HBR case study Euro Zone Convergence, Divergence...and Then What? 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 Zone Rates 's lucrative customers.
Aligning sales with marketing
– It come across in the case study Euro Zone Convergence, Divergence...and Then What? 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 Euro Zone Convergence, Divergence...and Then What? can leverage the sales team experience to cultivate customer relationships as Zone Rates is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Zone Rates 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.
Capital Spending Reduction
– Even during the low interest decade, Zone Rates 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.
No frontier risks strategy
– After analyzing the HBR case study Euro Zone Convergence, Divergence...and Then What?, 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.
Products dominated business model
– Even though Zone Rates 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 - Euro Zone Convergence, Divergence...and Then What? should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, Zone Rates 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Euro Zone Convergence, Divergence...and Then What?, is just above the industry average. Zone Rates 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.
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 Zone Rates supply chain. Even after few cautionary changes mentioned in the HBR case study - Euro Zone Convergence, Divergence...and Then What?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Zone Rates vulnerable to further global disruptions in South East Asia.
Opportunities Euro Zone Convergence, Divergence...and Then What? | 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 Euro Zone Convergence, Divergence...and Then What? are -
Loyalty marketing
– Zone Rates 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.
Using analytics as competitive advantage
– Zone Rates 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 Euro Zone Convergence, Divergence...and Then What? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Zone Rates to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Zone Rates in the consumer business. Now Zone Rates can target international markets with far fewer capital restrictions requirements than the existing system.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Zone Rates 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, Euro Zone Convergence, Divergence...and Then What?, 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. Zone Rates can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Zone Rates is facing challenges because of the dominance of functional experts in the organization. Euro Zone Convergence, Divergence...and Then What? 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.
Leveraging digital technologies
– Zone Rates can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Better consumer reach
– The expansion of the 5G network will help Zone Rates to increase its market reach. Zone Rates 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
– Zone Rates 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Zone Rates can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Zone Rates 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 Zone Rates to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Zone Rates 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Zone Rates can use these opportunities to build new business models that can help the communities that Zone Rates operates in. Secondly it can use opportunities from government spending in Global Business sector.
Threats Euro Zone Convergence, Divergence...and Then What? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Euro Zone Convergence, Divergence...and Then What? are -
Regulatory challenges
– Zone Rates 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.
Consumer confidence and its impact on Zone Rates 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.
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. Zone Rates 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 Zone Rates.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Euro Zone Convergence, Divergence...and Then What?, Zone Rates 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 .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Zone Rates 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.
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 Zone Rates business can come under increasing regulations regarding data privacy, data security, 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 Zone Rates in the Global Business sector and impact the bottomline of the organization.
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.
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. Zone Rates can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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. Zone Rates needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Zone Rates 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 Euro Zone Convergence, Divergence...and Then What? .
Weighted SWOT Analysis of Euro Zone Convergence, Divergence...and Then What? 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 Euro Zone Convergence, Divergence...and Then What? 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 Euro Zone Convergence, Divergence...and Then What? 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 Euro Zone Convergence, Divergence...and Then What? 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 Euro Zone Convergence, Divergence...and Then What? 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 Zone Rates needs to make to build a sustainable competitive advantage.