Euro Zone Convergence, Divergence and then what? Case Solution & Answer

Euro Zone Convergence, Divergence and then what?

General Government Net Lending and Borrowing

Spain has lower lending and borrowing which means the government of Spain pays a low amount of borrowing payment of interest. High lending is good but high borrowing increases the cost of interest for the government of the country. Germany has high lending and borrowing Germany earns good revenue from the lending from which it pays the amount of interest paid.

Position Your Hedge Fund

After explaining the Comparison of Germany, Italy, and Spain we can say that the hedge fund is profitable. Germany is the most advanced in technology through which the country earns a lot of revenue which increases the Gross Domestic Product of the country. In the Net debt graph, the government of Germany has a low debt amount whereas the revenue and Gross domestic product of Germany are high. Germany also leads the money high compared to Italy and Spain and tries to grab the opportunities which increase the GDP of the Country. Germany earns a lot of revenue through hedging funds and increases the growth of the country.

SWOT Analysis


  • The company has low bargaining power over suppliers which helps the company manage the supply chain and the distribution of its products.
  • The company has a successful track record of launching new products in the market which shows that it has the effective processing of exploring new products and performs quick pilot testing.
  • It has an extensive network of distribution that helps the company lunch new products into the market.
  • The company has an innovative culture, so that is why they spent a huge budget on R&D activities.
  • The company has differentiated products in the market that aid the company in fetching price premiums as compared to their rivals in the global market.
  • Zone Rates have strong brand equity that helps in acquiring new customers and building strong profitable relationships with their loyal customers.


  • Zone Rates have a product-dominated business model that made the lunch of new products very critical and resist the continuous economic growth of the company.
  • The company has a lack of differentiated products which is the biggest challenge for the company to maintain its market value.
  • The company could not able to capital investments to tune the of the business competitors due to which company facing the stiff competition in the market.
  • The operating cost of the company is very high, which would cause unsustainability while it would provide an opportunity to other competitors to attract the customers of zone rates towards themselves.
  • The company has high bargaining power of channel partners because of regulatory requirements the company could not able to streamline the operations to reduce the bargaining power of channel partners.
  • The dependency on the star products is the main weakness of the company which could affect the focus on launching new diverse and qualitative products.


The zone Rate has various opportunities which enable the company to build a strong market value as compared to their rivals.

  • While the company spends various funds on the integration of analytics and machine learning in its various sectors, that would enable the company to build competitive advantages and market as well.
  • Due to the COVID-19, the customer behaviors are changed so the company can use these changes to build up an efficient business model that helps the company build a profitable market as compared op the other competitors.
  • Companies can leverage various digital technologies for the creation of a wide range of markets and by using these technologies, i.e. artificial intelligence, a machine learning company can automate their operations can reduce the production cost.
  • The company uses the various latest technologies, so by using 3-D printing and CAD Company can build up quick prototype pilot testing products.
  • By expanding the digital payment system by using digital currencies, the company can reconfigure its business model.
  • The company can expand its business by using e-commerce platforms that help the company engage its customers directly via direct communications.


  • The company faces downward pressure because of the increase in the completion by the international market players because they had a stable revenue that can penetrate the market of the Zone rates.
  • Due to the COVID-19, there was a high-pitched increase in the wages which build up the downward pressure on the margin of the Zone Rates.
  • The entrance of the new competitors having versatile analytical strategies and innovative technologies that result in building a highly competitive market for the companies and affect the marketplace.
  • The artificial intelligence and other analytical technologies and analytical strategies pieces of training are highly complex so it will consume a long time to train the employees that buildup on the production and launching of new products….

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