Passion and Strategy: Novozymes' Embrace of the UN Sustainable Development Goals SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Passion and Strategy: Novozymes' Embrace of the UN Sustainable Development Goals
This case explores the sustainability efforts at Novozymes, the world's largest and oldest producer of industrial enzymes. In 2015, the Danish company became the world's first company known to have crafted a new corporate strategy based on the United Nations Sustainable Development Goals (SDGs). Since then, the company used the SDGs as a lens to screen products, business models and partnerships, and prioritized innovation decisions that could deliver extraordinary societal and business impact. This case study asks students to evaluate the success of those efforts and to outline what the company should do going forward.
Swot Analysis of "Passion and Strategy: Novozymes' Embrace of the UN Sustainable Development Goals" written by Andy Zelleke, Emilie Billaud includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Sdgs Novozymes facing as an external strategic factors. Some of the topics covered in Passion and Strategy: Novozymes' Embrace of the UN Sustainable Development Goals case study are - Strategic Management Strategies, Corporate communications, Corporate governance, Ethics, Social responsibility, Strategy and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Passion and Strategy: Novozymes' Embrace of the UN Sustainable Development Goals casestudy better are - – cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, increasing transportation and logistics costs, geopolitical disruptions, wage bills are increasing, supply chains are disrupted by pandemic , there is backlash against globalization,
competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Passion and Strategy: Novozymes' Embrace of the UN Sustainable Development Goals
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Passion and Strategy: Novozymes' Embrace of the UN Sustainable Development Goals case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sdgs Novozymes, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sdgs Novozymes 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 Passion and Strategy: Novozymes' Embrace of the UN Sustainable Development Goals can be done for the following purposes –
1. Strategic planning using facts provided in Passion and Strategy: Novozymes' Embrace of the UN Sustainable Development Goals case study
2. Improving business portfolio management of Sdgs Novozymes
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Sdgs Novozymes
Strengths Passion and Strategy: Novozymes' Embrace of the UN Sustainable Development Goals | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sdgs Novozymes in Passion and Strategy: Novozymes' Embrace of the UN Sustainable Development Goals Harvard Business Review case study are -
Organizational Resilience of Sdgs Novozymes
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Sdgs Novozymes does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Sdgs Novozymes has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Sdgs Novozymes to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Sdgs Novozymes has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Sdgs Novozymes 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)
– Sdgs Novozymes 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 Passion and Strategy: Novozymes' Embrace of the UN Sustainable Development Goals - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Operational resilience
– The operational resilience strategy in the Passion and Strategy: Novozymes' Embrace of the UN Sustainable Development Goals 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.
Ability to recruit top talent
– Sdgs Novozymes is one of the leading recruiters in the industry. Managers in the Passion and Strategy: Novozymes' Embrace of the UN Sustainable Development Goals are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of Sdgs Novozymes in the sector have low bargaining power. Passion and Strategy: Novozymes' Embrace of the UN Sustainable Development Goals has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sdgs Novozymes to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Leadership & Managing People field
– Sdgs Novozymes 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 Sdgs Novozymes in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management
– Sdgs Novozymes is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Leadership & Managing People industry
– Passion and Strategy: Novozymes' Embrace of the UN Sustainable Development Goals firm has clearly differentiated products in the market place. This has enabled Sdgs Novozymes to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Sdgs Novozymes to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Sdgs Novozymes is present in almost all the verticals within the industry. This has provided firm in Passion and Strategy: Novozymes' Embrace of the UN Sustainable Development Goals 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.
High switching costs
– The high switching costs that Sdgs Novozymes has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Weaknesses Passion and Strategy: Novozymes' Embrace of the UN Sustainable Development Goals | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Passion and Strategy: Novozymes' Embrace of the UN Sustainable Development Goals are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Passion and Strategy: Novozymes' Embrace of the UN Sustainable Development Goals, in the dynamic environment Sdgs Novozymes has struggled to respond to the nimble upstart competition. Sdgs Novozymes has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Low market penetration in new markets
– Outside its home market of Sdgs Novozymes, firm in the HBR case study Passion and Strategy: Novozymes' Embrace of the UN Sustainable Development Goals needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Sdgs Novozymes 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. Sdgs Novozymes 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.
Capital Spending Reduction
– Even during the low interest decade, Sdgs Novozymes 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.
Slow to strategic competitive environment developments
– As Passion and Strategy: Novozymes' Embrace of the UN Sustainable Development Goals HBR case study mentions - Sdgs Novozymes 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.
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 Sdgs Novozymes supply chain. Even after few cautionary changes mentioned in the HBR case study - Passion and Strategy: Novozymes' Embrace of the UN Sustainable Development Goals, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Sdgs Novozymes vulnerable to further global disruptions in South East Asia.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Passion and Strategy: Novozymes' Embrace of the UN Sustainable Development Goals 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 Sdgs Novozymes has relatively successful track record of launching new products.
Lack of clear differentiation of Sdgs Novozymes products
– To increase the profitability and margins on the products, Sdgs Novozymes needs to provide more differentiated products than what it is currently offering in the marketplace.
Interest costs
– Compare to the competition, Sdgs Novozymes 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.
Need for greater diversity
– Sdgs Novozymes 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Passion and Strategy: Novozymes' Embrace of the UN Sustainable Development Goals, it seems that the employees of Sdgs Novozymes 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.
Opportunities Passion and Strategy: Novozymes' Embrace of the UN Sustainable Development Goals | 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 Passion and Strategy: Novozymes' Embrace of the UN Sustainable Development Goals are -
Creating value in data economy
– The success of analytics program of Sdgs Novozymes has opened avenues for new revenue streams for the organization in the industry. This can help Sdgs Novozymes to build a more holistic ecosystem as suggested in the Passion and Strategy: Novozymes' Embrace of the UN Sustainable Development Goals case study. Sdgs Novozymes can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Sdgs Novozymes has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Building a culture of innovation
– managers at Sdgs Novozymes 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 Leadership & Managing People segment.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Sdgs Novozymes can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Sdgs Novozymes can use these opportunities to build new business models that can help the communities that Sdgs Novozymes operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Learning at scale
– Online learning technologies has now opened space for Sdgs Novozymes 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.
Buying journey improvements
– Sdgs Novozymes can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Passion and Strategy: Novozymes' Embrace of the UN Sustainable Development Goals 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Sdgs Novozymes 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, Passion and Strategy: Novozymes' Embrace of the UN Sustainable Development Goals, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Sdgs Novozymes 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Sdgs Novozymes in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People 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 Leadership & Managing People industry, but it has also influenced the consumer preferences. Sdgs Novozymes can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Sdgs Novozymes can develop new processes and procedures in Leadership & Managing People 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Sdgs Novozymes can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Passion and Strategy: Novozymes' Embrace of the UN Sustainable Development Goals External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Passion and Strategy: Novozymes' Embrace of the UN Sustainable Development Goals are -
High dependence on third party suppliers
– Sdgs Novozymes 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.
Stagnating economy with rate increase
– Sdgs Novozymes 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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Sdgs Novozymes in the Leadership & Managing People industry. The Leadership & Managing People 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.
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 Sdgs Novozymes in the Leadership & Managing People sector and impact the bottomline of the organization.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Passion and Strategy: Novozymes' Embrace of the UN Sustainable Development Goals, Sdgs Novozymes may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
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. Sdgs Novozymes 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.
Regulatory challenges
– Sdgs Novozymes 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 Leadership & Managing People industry regulations.
Increasing wage structure of Sdgs Novozymes
– 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 Sdgs Novozymes.
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 Sdgs Novozymes business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Sdgs Novozymes is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Sdgs Novozymes has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Sdgs Novozymes needs to keep up with the evolution of technology in the Leadership & Managing People 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.
Weighted SWOT Analysis of Passion and Strategy: Novozymes' Embrace of the UN Sustainable Development Goals 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 Passion and Strategy: Novozymes' Embrace of the UN Sustainable Development Goals 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 Passion and Strategy: Novozymes' Embrace of the UN Sustainable Development Goals 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 Passion and Strategy: Novozymes' Embrace of the UN Sustainable Development Goals 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 Passion and Strategy: Novozymes' Embrace of the UN Sustainable Development Goals 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 Sdgs Novozymes needs to make to build a sustainable competitive advantage.