Can the Eurozone Survive? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Can the Eurozone Survive?
The sovereign debt crisis that took Greece by storm in 2010 began to spread to other European markets. Within a few months Ireland and Portugal had also lost access to the sovereign debt markets and had to rely on supranational loans for their financing. The risk of further contagion was clear and present. Political leaders continued to seek measures to stem the crisis and to avoid the larger economies of Spain and Italy becoming involved. The European financial system became strained. Banks were found to be undercapitalized and began to ration credit to the economy. The European Central Bank intervened to provide liquidity to the system in order to avoid a credit crunch. Could the eurozone survive the storm?
Swot Analysis of "Can the Eurozone Survive?" written by Dante Roscini, Jonathan Schlefer includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Eurozone Sovereign facing as an external strategic factors. Some of the topics covered in Can the Eurozone Survive? case study are - Strategic Management Strategies, Costs, Currency, Financial analysis, Government, International business, Recession and Global Business.
Some of the macro environment factors that can be used to understand the Can the Eurozone Survive? casestudy better are - – digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices, technology disruption, wage bills are increasing, supply chains are disrupted by pandemic , talent flight as more people leaving formal jobs,
cloud computing is disrupting traditional business models, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Can the Eurozone Survive?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Can the Eurozone Survive? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Eurozone Sovereign, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Eurozone Sovereign 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 Can the Eurozone Survive? can be done for the following purposes –
1. Strategic planning using facts provided in Can the Eurozone Survive? case study
2. Improving business portfolio management of Eurozone Sovereign
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 Eurozone Sovereign
Strengths Can the Eurozone Survive? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Eurozone Sovereign in Can the Eurozone Survive? Harvard Business Review case study are -
Training and development
– Eurozone Sovereign has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Can the Eurozone Survive? 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.
Diverse revenue streams
– Eurozone Sovereign is present in almost all the verticals within the industry. This has provided firm in Can the Eurozone Survive? 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.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Eurozone Sovereign digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Eurozone Sovereign has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Ability to recruit top talent
– Eurozone Sovereign is one of the leading recruiters in the industry. Managers in the Can the Eurozone Survive? are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High brand equity
– Eurozone Sovereign has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Eurozone Sovereign to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Eurozone Sovereign 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 Can the Eurozone Survive? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Eurozone Sovereign 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 Can the Eurozone Survive? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Eurozone Sovereign is one of the most innovative firm in sector. Manager in Can the Eurozone Survive? Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Eurozone Sovereign 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 Eurozone Sovereign is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Can the Eurozone Survive? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Eurozone Sovereign 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.
Successful track record of launching new products
– Eurozone Sovereign has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Eurozone Sovereign 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.
Strong track record of project management
– Eurozone Sovereign is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Can the Eurozone Survive? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Can the Eurozone Survive? are -
Low market penetration in new markets
– Outside its home market of Eurozone Sovereign, firm in the HBR case study Can the Eurozone Survive? needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study Can the Eurozone Survive? 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 Can the Eurozone Survive? can leverage the sales team experience to cultivate customer relationships as Eurozone Sovereign is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Eurozone Sovereign has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Eurozone Sovereign even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High cash cycle compare to competitors
Eurozone Sovereign 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.
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 Eurozone Sovereign supply chain. Even after few cautionary changes mentioned in the HBR case study - Can the Eurozone Survive?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Eurozone Sovereign vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Can the Eurozone Survive?, is just above the industry average. Eurozone Sovereign 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Can the Eurozone Survive?, it seems that the employees of Eurozone Sovereign 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, Dante Roscini, Jonathan Schlefer suggests that, Eurozone Sovereign 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, Eurozone Sovereign is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Can the Eurozone Survive? can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Eurozone Sovereign 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.
Increasing silos among functional specialists
– The organizational structure of Eurozone Sovereign is dominated by functional specialists. It is not different from other players in the Global Business segment. Eurozone Sovereign needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Eurozone Sovereign to focus more on services rather than just following the product oriented approach.
Opportunities Can the Eurozone Survive? | 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 Can the Eurozone Survive? are -
Manufacturing automation
– Eurozone Sovereign can use the latest technology developments to improve its manufacturing and designing process in Global Business segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Creating value in data economy
– The success of analytics program of Eurozone Sovereign has opened avenues for new revenue streams for the organization in the industry. This can help Eurozone Sovereign to build a more holistic ecosystem as suggested in the Can the Eurozone Survive? case study. Eurozone Sovereign can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Eurozone Sovereign 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.
Learning at scale
– Online learning technologies has now opened space for Eurozone Sovereign 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Eurozone Sovereign 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 Eurozone Sovereign to hire the very best people irrespective of their geographical location.
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 Eurozone Sovereign in the consumer business. Now Eurozone Sovereign can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Eurozone Sovereign 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.
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. Eurozone Sovereign 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. Eurozone Sovereign can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Eurozone Sovereign 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, Can the Eurozone Survive?, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Eurozone Sovereign can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Can the Eurozone Survive? 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.
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 Eurozone Sovereign 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Eurozone Sovereign 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Eurozone Sovereign is facing challenges because of the dominance of functional experts in the organization. Can the Eurozone Survive? 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.
Threats Can the Eurozone Survive? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Can the Eurozone Survive? are -
Regulatory challenges
– Eurozone Sovereign 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.
Increasing wage structure of Eurozone Sovereign
– 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 Eurozone Sovereign.
High dependence on third party suppliers
– Eurozone Sovereign 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.
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.
Consumer confidence and its impact on Eurozone Sovereign 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.
Stagnating economy with rate increase
– Eurozone Sovereign 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.
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. Eurozone Sovereign 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Eurozone Sovereign with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Eurozone Sovereign in the Global Business sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Eurozone Sovereign is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Eurozone Sovereign 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 Eurozone Sovereign.
Weighted SWOT Analysis of Can the Eurozone Survive? 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 Can the Eurozone Survive? 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 Can the Eurozone Survive? 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 Can the Eurozone Survive? 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 Can the Eurozone Survive? 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 Eurozone Sovereign needs to make to build a sustainable competitive advantage.