Aiming Toward a Hydrogen Economy: Icelandic New Energy Ltd. (Islensk Nyorka) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Aiming Toward a Hydrogen Economy: Icelandic New Energy Ltd. (Islensk Nyorka)
Icelandic New Energy Co., a research and development consortium based in Reykjavik, Iceland, is considering its future direction. The two-person team has met its first major goal--the installation of the world's first commercial hydrogen filling station and the coordination of a public transport test project involving the operation of three hydrogen-fuelled city buses. The company was founded with the overall objective of investigating the potential for eventually replacing the use of fossil fuels in Iceland with hydrogen-based fuels and creating the first hydrogen society in the world. Working toward the goal of self-sufficiency from fossil fuels, Icelandic New Energy Co. was set up in 1999 by the consortium Vistorka and three major partners, each contributing a part to the testing--Royal Dutch Shell (the refueling station), Norsk Hydro (the electrolysis technology to make the hydrogen), and DaimlerChrysler (fuel cell vehicles using hydrogen fuel). The shareholder agreement, established with the company's start in 1999, is set to expire in 2005. With all of the major activities being outsourced and contracted, the team wondered how it could keep the company as a going concern and contribute to Iceland's transition to a hydrogen economy--a feat that could take more than 15 years.
Authors :: Pratima Bansal, Ken Mark, Jordan Mitchell
Swot Analysis of "Aiming Toward a Hydrogen Economy: Icelandic New Energy Ltd. (Islensk Nyorka)" written by Pratima Bansal, Ken Mark, Jordan Mitchell includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hydrogen Icelandic facing as an external strategic factors. Some of the topics covered in Aiming Toward a Hydrogen Economy: Icelandic New Energy Ltd. (Islensk Nyorka) case study are - Strategic Management Strategies, Strategic planning and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Aiming Toward a Hydrogen Economy: Icelandic New Energy Ltd. (Islensk Nyorka) casestudy better are - – increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices, there is increasing trade war between United States & China, increasing transportation and logistics costs, wage bills are increasing,
geopolitical disruptions, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Aiming Toward a Hydrogen Economy: Icelandic New Energy Ltd. (Islensk Nyorka)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Aiming Toward a Hydrogen Economy: Icelandic New Energy Ltd. (Islensk Nyorka) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hydrogen Icelandic, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hydrogen Icelandic 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 Aiming Toward a Hydrogen Economy: Icelandic New Energy Ltd. (Islensk Nyorka) can be done for the following purposes –
1. Strategic planning using facts provided in Aiming Toward a Hydrogen Economy: Icelandic New Energy Ltd. (Islensk Nyorka) case study
2. Improving business portfolio management of Hydrogen Icelandic
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Hydrogen Icelandic
Strengths Aiming Toward a Hydrogen Economy: Icelandic New Energy Ltd. (Islensk Nyorka) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hydrogen Icelandic in Aiming Toward a Hydrogen Economy: Icelandic New Energy Ltd. (Islensk Nyorka) Harvard Business Review case study are -
Successful track record of launching new products
– Hydrogen Icelandic has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hydrogen Icelandic 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Aiming Toward a Hydrogen Economy: Icelandic New Energy Ltd. (Islensk Nyorka) firm has clearly differentiated products in the market place. This has enabled Hydrogen Icelandic to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Hydrogen Icelandic to invest into research and development (R&D) and innovation.
Ability to lead change in Strategy & Execution field
– Hydrogen Icelandic is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Hydrogen Icelandic in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Hydrogen Icelandic is present in almost all the verticals within the industry. This has provided firm in Aiming Toward a Hydrogen Economy: Icelandic New Energy Ltd. (Islensk Nyorka) 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.
Ability to recruit top talent
– Hydrogen Icelandic is one of the leading recruiters in the industry. Managers in the Aiming Toward a Hydrogen Economy: Icelandic New Energy Ltd. (Islensk Nyorka) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Hydrogen Icelandic digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Hydrogen Icelandic 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.
High brand equity
– Hydrogen Icelandic has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hydrogen Icelandic to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Hydrogen Icelandic is one of the most innovative firm in sector. Manager in Aiming Toward a Hydrogen Economy: Icelandic New Energy Ltd. (Islensk Nyorka) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Hydrogen Icelandic 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 Aiming Toward a Hydrogen Economy: Icelandic New Energy Ltd. (Islensk Nyorka) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy in the Aiming Toward a Hydrogen Economy: Icelandic New Energy Ltd. (Islensk Nyorka) Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Training and development
– Hydrogen Icelandic has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Aiming Toward a Hydrogen Economy: Icelandic New Energy Ltd. (Islensk Nyorka) 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.
Learning organization
- Hydrogen Icelandic 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 Hydrogen Icelandic is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Aiming Toward a Hydrogen Economy: Icelandic New Energy Ltd. (Islensk Nyorka) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Aiming Toward a Hydrogen Economy: Icelandic New Energy Ltd. (Islensk Nyorka) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Aiming Toward a Hydrogen Economy: Icelandic New Energy Ltd. (Islensk Nyorka) are -
Products dominated business model
– Even though Hydrogen Icelandic has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Aiming Toward a Hydrogen Economy: Icelandic New Energy Ltd. (Islensk Nyorka) should strive to include more intangible value offerings along with its core products and services.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Aiming Toward a Hydrogen Economy: Icelandic New Energy Ltd. (Islensk Nyorka) HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Hydrogen Icelandic has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Hydrogen Icelandic 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. Hydrogen Icelandic 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Hydrogen Icelandic is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Aiming Toward a Hydrogen Economy: Icelandic New Energy Ltd. (Islensk Nyorka) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High cash cycle compare to competitors
Hydrogen Icelandic 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Aiming Toward a Hydrogen Economy: Icelandic New Energy Ltd. (Islensk Nyorka), it seems that the employees of Hydrogen Icelandic 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 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 Hydrogen Icelandic supply chain. Even after few cautionary changes mentioned in the HBR case study - Aiming Toward a Hydrogen Economy: Icelandic New Energy Ltd. (Islensk Nyorka), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Hydrogen Icelandic vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– After analyzing the HBR case study Aiming Toward a Hydrogen Economy: Icelandic New Energy Ltd. (Islensk Nyorka), it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Lack of clear differentiation of Hydrogen Icelandic products
– To increase the profitability and margins on the products, Hydrogen Icelandic needs to provide more differentiated products than what it is currently offering in the marketplace.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Aiming Toward a Hydrogen Economy: Icelandic New Energy Ltd. (Islensk Nyorka), in the dynamic environment Hydrogen Icelandic has struggled to respond to the nimble upstart competition. Hydrogen Icelandic has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to strategic competitive environment developments
– As Aiming Toward a Hydrogen Economy: Icelandic New Energy Ltd. (Islensk Nyorka) HBR case study mentions - Hydrogen Icelandic takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Opportunities Aiming Toward a Hydrogen Economy: Icelandic New Energy Ltd. (Islensk Nyorka) | 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 Aiming Toward a Hydrogen Economy: Icelandic New Energy Ltd. (Islensk Nyorka) are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Hydrogen Icelandic 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 Hydrogen Icelandic to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Hydrogen Icelandic 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.
Building a culture of innovation
– managers at Hydrogen Icelandic 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 Strategy & Execution segment.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hydrogen Icelandic in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
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 Hydrogen Icelandic in the consumer business. Now Hydrogen Icelandic can target international markets with far fewer capital restrictions requirements than the existing system.
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 Hydrogen Icelandic 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.
Buying journey improvements
– Hydrogen Icelandic can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Aiming Toward a Hydrogen Economy: Icelandic New Energy Ltd. (Islensk Nyorka) 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Hydrogen Icelandic is facing challenges because of the dominance of functional experts in the organization. Aiming Toward a Hydrogen Economy: Icelandic New Energy Ltd. (Islensk Nyorka) 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.
Leveraging digital technologies
– Hydrogen Icelandic can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Creating value in data economy
– The success of analytics program of Hydrogen Icelandic has opened avenues for new revenue streams for the organization in the industry. This can help Hydrogen Icelandic to build a more holistic ecosystem as suggested in the Aiming Toward a Hydrogen Economy: Icelandic New Energy Ltd. (Islensk Nyorka) case study. Hydrogen Icelandic can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Hydrogen Icelandic 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.
Developing new processes and practices
– Hydrogen Icelandic can develop new processes and procedures in Strategy & Execution 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.
Manufacturing automation
– Hydrogen Icelandic can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
Threats Aiming Toward a Hydrogen Economy: Icelandic New Energy Ltd. (Islensk Nyorka) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Aiming Toward a Hydrogen Economy: Icelandic New Energy Ltd. (Islensk Nyorka) are -
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Hydrogen Icelandic needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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. Hydrogen Icelandic 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.
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 Hydrogen Icelandic in the Strategy & Execution sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Hydrogen Icelandic 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.
Consumer confidence and its impact on Hydrogen Icelandic 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Hydrogen Icelandic with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Regulatory challenges
– Hydrogen Icelandic 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 Strategy & Execution industry regulations.
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 Hydrogen Icelandic.
Increasing wage structure of Hydrogen Icelandic
– 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 Hydrogen Icelandic.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Hydrogen Icelandic can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Aiming Toward a Hydrogen Economy: Icelandic New Energy Ltd. (Islensk Nyorka) .
Technology acceleration in Forth Industrial Revolution
– Hydrogen Icelandic has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Hydrogen Icelandic needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Shortening product life cycle
– it is one of the major threat that Hydrogen Icelandic is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Weighted SWOT Analysis of Aiming Toward a Hydrogen Economy: Icelandic New Energy Ltd. (Islensk Nyorka) 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 Aiming Toward a Hydrogen Economy: Icelandic New Energy Ltd. (Islensk Nyorka) 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 Aiming Toward a Hydrogen Economy: Icelandic New Energy Ltd. (Islensk Nyorka) 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 Aiming Toward a Hydrogen Economy: Icelandic New Energy Ltd. (Islensk Nyorka) 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 Aiming Toward a Hydrogen Economy: Icelandic New Energy Ltd. (Islensk Nyorka) 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 Hydrogen Icelandic needs to make to build a sustainable competitive advantage.
