The Euro: operational hype or strategic relevance?

Paul Verdin and Nick Van Heck

European Management Journal, 1999, vol. 17, issue 4, 356-367

Abstract: Now that the Euro has been introduced and Europhoria is still running high, it is time to (re)consider the strategic question surrounding the Euro from a corporate perspective. Is the Euro really strategic? In what way? Or is it just an operational nuisance? Only a few months ago, most managers still considered the Euro as mainly a technical and operational issue. Only one out of two companies saw strategic implications. Are these companies right? What are the real strategic questions that companies are facing up to and how does the Single Currency affect these? We see three main strategic questions: 1. What does the nature and structure of our industry look like and what forces are at hand to change it? Particularly, what pressures for market convergence do we see in our industry and competitive landscape in the European scene? 2. What new opportunities for (or threats to) value creation and value capturing will arise at the company level? Particularly, what opportunities for increased efficiency and cross-border segmentation can be expected in 'Euroland'? 3. How will the basis and sustainability of our competitive advantage vis-à-vis our competitiors change in the Eurozone? What is the differential effect of the Euro on different types of players in our industry? We have addressed these questions in our paper, working against a background of year-long research in a wide range of industries and companies and on the development of European strategies and organizations.

Date: 1999
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