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Term paper on Euro zone

According to mentioned report, the following immediate defensive actions are required in order to react to the challenges posed by crisis:

In accordance to Neill Thomas, KPMG Head of Debt Advisory: ”˜With the potential impact on bank liquidity, we could see a second credit crunch. Companies should diversify their funding sources and ensure they are not over-dependent on a narrow base of lending institutions’. (KPMG report, 2011)

Also, in accordance to KPMG report, the following immediate trading response are required in order to react to the crisis:

 

In terms of planning there are two kinds of planning required – continuity and contingency planning. Professional researchers from KPMG recommend to prepare the company recommend to plan for the worst situation possible. Besides there is another recommendation that states that triggered response plans should be produced, it means ”˜creating a single contingency plan that thinks through and sets out the response to a range of agreed trigger events’ (KPMG report, 2011)

Other crucial points that have to be considered are the communication plans and operations that are implemented in a fundamentally different environt. Communication plans may be used to keep close to customers, suppliers and other stakeholders who need to be aware of the plans of the company. Regarding the operations that are implemented in a fundamentally different environ, authors of the  report claim that under influence of the negative post Euro crisis situation, it is likely that organizations ”˜will be operating in a very different external environment, as such, current strategies and operating models may not still hold’. (KPMG report, 2011) Therefore some organizations could make a decision of limiting operations in a country or exiting the country. But there is another chance ”“ the organization may choose to get ”˜an advantage of the situation by acquiring a local rival and thus increasing their market share.’ (KPMG report, 2011) Besides, the tax environment is influenced by the significant changes, for instance, austerity measures that may involve new taxes, increased rates and widened tax base, and also the implementation of the initiatives to stimulate growth, and even European further tax harmonization. Thus taking all of these circumstances into account, considering various scenarios, organization should make the right investment decisions.

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