From e-Banking to e-Business at Nordea (Scandinavia): The World's Biggest Clicks-and-Mortar Bank SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of From e-Banking to e-Business at Nordea (Scandinavia): The World's Biggest Clicks-and-Mortar Bank
This case focuses on Nordea's move from e-banking to e-business and the way the bank established an e-habit and e-trust among its customers. It examines the main e-business services that Nordea currently offers to its private and corporate customers. These include e-identification, e-signature, e-billing, e-salary and e-payment. The case also discusses multi-channel management and pricing issues as well as future growth opportunities.
Authors :: Enders Albrecht, Tawfik Jelassi, Charles Waldman
Swot Analysis of "From e-Banking to e-Business at Nordea (Scandinavia): The World's Biggest Clicks-and-Mortar Bank" written by Enders Albrecht, Tawfik Jelassi, Charles Waldman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Nordea Nordea's facing as an external strategic factors. Some of the topics covered in From e-Banking to e-Business at Nordea (Scandinavia): The World's Biggest Clicks-and-Mortar Bank case study are - Strategic Management Strategies, Internet and Strategy & Execution.
Some of the macro environment factors that can be used to understand the From e-Banking to e-Business at Nordea (Scandinavia): The World's Biggest Clicks-and-Mortar Bank casestudy better are - – increasing commodity prices, central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models, wage bills are increasing, supply chains are disrupted by pandemic , increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of From e-Banking to e-Business at Nordea (Scandinavia): The World's Biggest Clicks-and-Mortar Bank
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in From e-Banking to e-Business at Nordea (Scandinavia): The World's Biggest Clicks-and-Mortar Bank case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nordea Nordea's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nordea Nordea's 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 From e-Banking to e-Business at Nordea (Scandinavia): The World's Biggest Clicks-and-Mortar Bank can be done for the following purposes –
1. Strategic planning using facts provided in From e-Banking to e-Business at Nordea (Scandinavia): The World's Biggest Clicks-and-Mortar Bank case study
2. Improving business portfolio management of Nordea Nordea's
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 Nordea Nordea's
Strengths From e-Banking to e-Business at Nordea (Scandinavia): The World's Biggest Clicks-and-Mortar Bank | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nordea Nordea's in From e-Banking to e-Business at Nordea (Scandinavia): The World's Biggest Clicks-and-Mortar Bank Harvard Business Review case study are -
High brand equity
– Nordea Nordea's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Nordea Nordea's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Nordea Nordea's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Nordea Nordea's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Nordea Nordea's 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 From e-Banking to e-Business at Nordea (Scandinavia): The World's Biggest Clicks-and-Mortar Bank HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Nordea Nordea's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Nordea Nordea's 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.
Strong track record of project management
– Nordea Nordea's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Nordea Nordea's 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 Nordea Nordea's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in From e-Banking to e-Business at Nordea (Scandinavia): The World's Biggest Clicks-and-Mortar Bank Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the From e-Banking to e-Business at Nordea (Scandinavia): The World's Biggest Clicks-and-Mortar Bank 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.
Low bargaining power of suppliers
– Suppliers of Nordea Nordea's in the sector have low bargaining power. From e-Banking to e-Business at Nordea (Scandinavia): The World's Biggest Clicks-and-Mortar Bank has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Nordea Nordea's to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Nordea Nordea's is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Enders Albrecht, Tawfik Jelassi, Charles Waldman can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Successful track record of launching new products
– Nordea Nordea's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Nordea Nordea's 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.
Effective Research and Development (R&D)
– Nordea Nordea's has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study From e-Banking to e-Business at Nordea (Scandinavia): The World's Biggest Clicks-and-Mortar Bank - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Nordea Nordea's are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Weaknesses From e-Banking to e-Business at Nordea (Scandinavia): The World's Biggest Clicks-and-Mortar Bank | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of From e-Banking to e-Business at Nordea (Scandinavia): The World's Biggest Clicks-and-Mortar Bank are -
Skills based hiring
– The stress on hiring functional specialists at Nordea Nordea's has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Lack of clear differentiation of Nordea Nordea's products
– To increase the profitability and margins on the products, Nordea Nordea's needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Nordea Nordea's 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 - From e-Banking to e-Business at Nordea (Scandinavia): The World's Biggest Clicks-and-Mortar Bank should strive to include more intangible value offerings along with its core products and services.
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 Nordea Nordea's supply chain. Even after few cautionary changes mentioned in the HBR case study - From e-Banking to e-Business at Nordea (Scandinavia): The World's Biggest Clicks-and-Mortar Bank, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Nordea Nordea's vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Nordea Nordea's has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study From e-Banking to e-Business at Nordea (Scandinavia): The World's Biggest Clicks-and-Mortar Bank, it seems that the employees of Nordea Nordea's 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.
Need for greater diversity
– Nordea Nordea's has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Interest costs
– Compare to the competition, Nordea Nordea's has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High bargaining power of channel partners
– Because of the regulatory requirements, Enders Albrecht, Tawfik Jelassi, Charles Waldman suggests that, Nordea Nordea's is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Slow decision making process
– As mentioned earlier in the report, Nordea Nordea's 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. Nordea Nordea's 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study From e-Banking to e-Business at Nordea (Scandinavia): The World's Biggest Clicks-and-Mortar Bank, is just above the industry average. Nordea Nordea's needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Opportunities From e-Banking to e-Business at Nordea (Scandinavia): The World's Biggest Clicks-and-Mortar Bank | 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 From e-Banking to e-Business at Nordea (Scandinavia): The World's Biggest Clicks-and-Mortar Bank are -
Leveraging digital technologies
– Nordea Nordea's 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Nordea Nordea's 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Nordea Nordea's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Nordea Nordea's can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, From e-Banking to e-Business at Nordea (Scandinavia): The World's Biggest Clicks-and-Mortar Bank, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Nordea Nordea's is facing challenges because of the dominance of functional experts in the organization. From e-Banking to e-Business at Nordea (Scandinavia): The World's Biggest Clicks-and-Mortar Bank 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.
Manufacturing automation
– Nordea Nordea's 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.
Developing new processes and practices
– Nordea Nordea's 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.
Better consumer reach
– The expansion of the 5G network will help Nordea Nordea's to increase its market reach. Nordea Nordea's will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Nordea Nordea's 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 Nordea Nordea's to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Nordea Nordea's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Nordea Nordea's can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Nordea Nordea's can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Learning at scale
– Online learning technologies has now opened space for Nordea Nordea's 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.
Using analytics as competitive advantage
– Nordea Nordea's has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study From e-Banking to e-Business at Nordea (Scandinavia): The World's Biggest Clicks-and-Mortar Bank - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Nordea Nordea's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats From e-Banking to e-Business at Nordea (Scandinavia): The World's Biggest Clicks-and-Mortar Bank External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study From e-Banking to e-Business at Nordea (Scandinavia): The World's Biggest Clicks-and-Mortar Bank are -
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Stagnating economy with rate increase
– Nordea Nordea's 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Nordea Nordea's in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Increasing wage structure of Nordea Nordea's
– 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 Nordea Nordea's.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Nordea Nordea's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Nordea Nordea's in the Strategy & Execution sector and impact the bottomline of the organization.
Consumer confidence and its impact on Nordea Nordea's 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.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Nordea Nordea's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Nordea Nordea's business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Nordea Nordea's high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Nordea Nordea's 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 From e-Banking to e-Business at Nordea (Scandinavia): The World's Biggest Clicks-and-Mortar Bank .
Regulatory challenges
– Nordea Nordea's 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.
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 From e-Banking to e-Business at Nordea (Scandinavia): The World's Biggest Clicks-and-Mortar Bank 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 From e-Banking to e-Business at Nordea (Scandinavia): The World's Biggest Clicks-and-Mortar Bank 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 From e-Banking to e-Business at Nordea (Scandinavia): The World's Biggest Clicks-and-Mortar Bank 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 From e-Banking to e-Business at Nordea (Scandinavia): The World's Biggest Clicks-and-Mortar Bank 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 From e-Banking to e-Business at Nordea (Scandinavia): The World's Biggest Clicks-and-Mortar Bank 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 Nordea Nordea's needs to make to build a sustainable competitive advantage.
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