Business Crises in Europe and Asia: The Role of Aggressive Expansion

This article provides insights into the causes of business crises in Europe and Asia that occurred between 2000 and 2022. The research offers a comprehensive analysis of 20 crisis situations, providing a deeper understanding of the factors that contributed to them. The study aims to identify common factors underlying business crises and detect the role of aggressive expansion that may be present in the activities of European and Asian companies. Knowing the causes, entrepreneurs can better understand the conditions for business development and make better decisions.

The research findings reveal that there are four main commonalities in the cases analyzed on both continents: 1) aggressive expansion; 2) market downturn and declining sales; 3) excessive debt and lack of liquidity; and 4) operating and labor costs. When analyzing the causes typical for one continent, we can point to conflicts and strikes in the case of Asia, and a lack of investments, as well as complex corporate structures, in the case of Europe.

In addition to identifying the causes, this analysis also suggests key solutions for businesses to avoid crisis and achieve success: managers should ensure the business can support new ventures without overextending resources; keep debt manageable by ensuring it aligns with the company’s revenue and growth projections; and develop strategies to quickly adapt to declining sales and market downturns. The research method used in this work is a comparative analysis of case studies, supported by a multidimensional correspondence analysis.