Novo Nordisk (A): Global Coordination SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Novo Nordisk (A): Global Coordination
In 1997, Novo Nordisk was one of two leading firms globally in the diabetes-care industry, dominating the business outside the United States but struggling to win market share there. It was formed in 1989 from a merger of two Danish firms that had previously competed fiercely. In the early 1990s, communications difficulties between its American operations and headquarters in Denmark led to its failing to adapt to changing U.S. Food and Drug Administration regulations. It was forced to withdraw the product it had made for the U.S. market and to inform its customers there that they would have to obtain their needed medicine from its main competitor. This case describes the company's organizational responses to this crisis. These centered on a reaffirmation of values; a definition of a new "Novo Nordisk Way of Management (NNWoM)," embodying a list of "Fundamentals"; and the creation of a group of facilitators whose role was to ensure that units adhered to the NNWoM.
Authors :: Joel Podolny, John Roberts, Aldo Kemper
Swot Analysis of "Novo Nordisk (A): Global Coordination" written by Joel Podolny, John Roberts, Aldo Kemper includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Nordisk Novo facing as an external strategic factors. Some of the topics covered in Novo Nordisk (A): Global Coordination case study are - Strategic Management Strategies, International business and Global Business.
Some of the macro environment factors that can be used to understand the Novo Nordisk (A): Global Coordination casestudy better are - – there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, technology disruption, competitive advantages are harder to sustain because of technology dispersion, cloud computing is disrupting traditional business models,
talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Novo Nordisk (A): Global Coordination
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Novo Nordisk (A): Global Coordination case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nordisk Novo, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nordisk Novo 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 Novo Nordisk (A): Global Coordination can be done for the following purposes –
1. Strategic planning using facts provided in Novo Nordisk (A): Global Coordination case study
2. Improving business portfolio management of Nordisk Novo
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Nordisk Novo
Strengths Novo Nordisk (A): Global Coordination | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nordisk Novo in Novo Nordisk (A): Global Coordination Harvard Business Review case study are -
High brand equity
– Nordisk Novo has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Nordisk Novo to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Global Business field
– Nordisk Novo 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 Nordisk Novo in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Nordisk Novo in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Nordisk Novo
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Nordisk Novo does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Nordisk Novo 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 Novo Nordisk (A): Global Coordination HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Nordisk Novo is one of the most innovative firm in sector. Manager in Novo Nordisk (A): Global Coordination Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Analytics focus
– Nordisk Novo 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 Joel Podolny, John Roberts, Aldo Kemper 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.
Sustainable margins compare to other players in Global Business industry
– Novo Nordisk (A): Global Coordination firm has clearly differentiated products in the market place. This has enabled Nordisk Novo to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Nordisk Novo to invest into research and development (R&D) and innovation.
Learning organization
- Nordisk Novo 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 Nordisk Novo is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Novo Nordisk (A): Global Coordination Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Nordisk Novo digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Nordisk Novo 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.
Effective Research and Development (R&D)
– Nordisk Novo 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 Novo Nordisk (A): Global Coordination - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Nordisk Novo in the sector have low bargaining power. Novo Nordisk (A): Global Coordination has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Nordisk Novo to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Novo Nordisk (A): Global Coordination | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Novo Nordisk (A): Global Coordination are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Novo Nordisk (A): Global Coordination 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 Nordisk Novo has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Nordisk Novo 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. Nordisk Novo 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 Novo Nordisk (A): Global Coordination, is just above the industry average. Nordisk Novo 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Nordisk Novo is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Novo Nordisk (A): Global Coordination can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– After analyzing the HBR case study Novo Nordisk (A): Global Coordination, it seems that company is thinking about the frontier risks that can impact Global Business 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Novo Nordisk (A): Global Coordination has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Nordisk Novo 's lucrative customers.
Aligning sales with marketing
– It come across in the case study Novo Nordisk (A): Global Coordination that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Novo Nordisk (A): Global Coordination can leverage the sales team experience to cultivate customer relationships as Nordisk Novo is planning to shift buying processes online.
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 Nordisk Novo supply chain. Even after few cautionary changes mentioned in the HBR case study - Novo Nordisk (A): Global Coordination, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Nordisk Novo vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Nordisk Novo products
– To increase the profitability and margins on the products, Nordisk Novo needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Nordisk Novo 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 - Novo Nordisk (A): Global Coordination should strive to include more intangible value offerings along with its core products and services.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Novo Nordisk (A): Global Coordination, in the dynamic environment Nordisk Novo has struggled to respond to the nimble upstart competition. Nordisk Novo has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Novo Nordisk (A): Global Coordination | 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 Novo Nordisk (A): Global Coordination are -
Learning at scale
– Online learning technologies has now opened space for Nordisk Novo 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Nordisk Novo 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Nordisk Novo 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 Nordisk Novo to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Nordisk Novo 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 Novo Nordisk (A): Global Coordination - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Nordisk Novo to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Nordisk Novo 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 Global Business segment.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Nordisk Novo can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Nordisk Novo can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Novo Nordisk (A): Global Coordination 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.
Manufacturing automation
– Nordisk Novo can use the latest technology developments to improve its manufacturing and designing process in Global Business 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.
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 Nordisk Novo in the consumer business. Now Nordisk Novo can target international markets with far fewer capital restrictions requirements than the existing system.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Nordisk Novo 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, Novo Nordisk (A): Global Coordination, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help Nordisk Novo to increase its market reach. Nordisk Novo 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Nordisk Novo in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Nordisk Novo can use these opportunities to build new business models that can help the communities that Nordisk Novo operates in. Secondly it can use opportunities from government spending in Global Business sector.
Threats Novo Nordisk (A): Global Coordination External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Novo Nordisk (A): Global Coordination are -
Technology acceleration in Forth Industrial Revolution
– Nordisk Novo has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Nordisk Novo needs to keep up with the evolution of technology in the Global Business 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.
Regulatory challenges
– Nordisk Novo 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 Global Business industry regulations.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Nordisk Novo can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Nordisk Novo
– 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 Nordisk Novo.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Novo Nordisk (A): Global Coordination, Nordisk Novo may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Nordisk Novo with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Nordisk Novo is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Nordisk Novo.
Consumer confidence and its impact on Nordisk Novo 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.
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 Nordisk Novo in the Global Business sector and impact the bottomline of the organization.
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.
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. Nordisk Novo needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
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 Novo Nordisk (A): Global Coordination 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 Novo Nordisk (A): Global Coordination 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 Novo Nordisk (A): Global Coordination 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 Novo Nordisk (A): Global Coordination 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 Novo Nordisk (A): Global Coordination 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 Nordisk Novo needs to make to build a sustainable competitive advantage.
