ISS & Nordea: Facility Management in the Nordic Region SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of ISS & Nordea: Facility Management in the Nordic Region
Nordea Bank has emerged as the largest financial group in the Nordic region. As part of their consolidated approach, Nordea top management has made the strategic decision to outsource a number of the company's peripheral activities, such as catering, security and cleaning, in order to focus more on the core business, banking. In Denmark, Finland and Sweden, the peripheral activities have been outsourced to one of the leading players in the facility management (FM) market, the global service provider ISS. The relationship between Nordea and ISS on delivering of facility services has a long history, but a new contract was successfully concluded by the end of 2010. Consequently, ISS was chosen as Nordea's FM partner and would continually be providing Nordea with a scope of supportive services across 20 locations in the Nordic region. From 2010 and onwards, a significant switch was made to an output-based focus in the contract, where it was the quality of the delivered services that were specified rather than how to achieve this level of quality, i.e. the input. The change into an output based contract was seen as a new beginning of the relationship that required significant changes on both sides in terms of mentality, organization of work, governance structures and, not least, adjustments of expectations. Both the view of the customer (Nordea) and the supplier (ISS) are presented and contrasted in the case.The case examines the financial, organizational and managerial challenges met by an international company outsourcing peripheral activities to a global facility service provider. Many of the tensions related to the collaboration and the different aims of the two companies are illustrated in the case, and so is the mutual learning and building of trust in the relationship.
Swot Analysis of "ISS & Nordea: Facility Management in the Nordic Region" written by Torben Pedersen, Bent Petersen includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Nordea Iss facing as an external strategic factors. Some of the topics covered in ISS & Nordea: Facility Management in the Nordic Region case study are - Strategic Management Strategies, Joint ventures, Leadership, Negotiations, Organizational culture, Supply chain and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the ISS & Nordea: Facility Management in the Nordic Region casestudy better are - – wage bills are increasing, increasing energy prices, supply chains are disrupted by pandemic , increasing household debt because of falling income levels, increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%,
increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of ISS & Nordea: Facility Management in the Nordic Region
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in ISS & Nordea: Facility Management in the Nordic Region case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nordea Iss, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nordea Iss 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 ISS & Nordea: Facility Management in the Nordic Region can be done for the following purposes –
1. Strategic planning using facts provided in ISS & Nordea: Facility Management in the Nordic Region case study
2. Improving business portfolio management of Nordea Iss
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 Nordea Iss
Strengths ISS & Nordea: Facility Management in the Nordic Region | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nordea Iss in ISS & Nordea: Facility Management in the Nordic Region Harvard Business Review case study are -
Successful track record of launching new products
– Nordea Iss has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Nordea Iss 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.
Organizational Resilience of Nordea Iss
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Nordea Iss does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Nordea Iss 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 Torben Pedersen, Bent Petersen 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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Nordea Iss digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Nordea Iss 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.
Highly skilled collaborators
– Nordea Iss 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 ISS & Nordea: Facility Management in the Nordic Region HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Leadership & Managing People industry
– ISS & Nordea: Facility Management in the Nordic Region firm has clearly differentiated products in the market place. This has enabled Nordea Iss to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Nordea Iss to invest into research and development (R&D) and innovation.
Strong track record of project management
– Nordea Iss is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Nordea Iss has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in ISS & Nordea: Facility Management in the Nordic Region 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.
Diverse revenue streams
– Nordea Iss is present in almost all the verticals within the industry. This has provided firm in ISS & Nordea: Facility Management in the Nordic Region 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.
Operational resilience
– The operational resilience strategy in the ISS & Nordea: Facility Management in the Nordic Region 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.
High switching costs
– The high switching costs that Nordea Iss 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.
Superior customer experience
– The customer experience strategy of Nordea Iss in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses ISS & Nordea: Facility Management in the Nordic Region | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of ISS & Nordea: Facility Management in the Nordic Region are -
Low market penetration in new markets
– Outside its home market of Nordea Iss, firm in the HBR case study ISS & Nordea: Facility Management in the Nordic Region needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners
– Because of the regulatory requirements, Torben Pedersen, Bent Petersen suggests that, Nordea Iss 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 to strategic competitive environment developments
– As ISS & Nordea: Facility Management in the Nordic Region HBR case study mentions - Nordea Iss 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study ISS & Nordea: Facility Management in the Nordic Region, it seems that the employees of Nordea Iss 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study ISS & Nordea: Facility Management in the Nordic Region, in the dynamic environment Nordea Iss has struggled to respond to the nimble upstart competition. Nordea Iss has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, firm in the HBR case study ISS & Nordea: Facility Management in the Nordic Region 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 Nordea Iss 's lucrative customers.
Need for greater diversity
– Nordea Iss 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.
Capital Spending Reduction
– Even during the low interest decade, Nordea Iss 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.
Lack of clear differentiation of Nordea Iss products
– To increase the profitability and margins on the products, Nordea Iss needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study ISS & Nordea: Facility Management in the Nordic Region, is just above the industry average. Nordea Iss 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.
High cash cycle compare to competitors
Nordea Iss 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.
Opportunities ISS & Nordea: Facility Management in the Nordic Region | 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 ISS & Nordea: Facility Management in the Nordic Region are -
Using analytics as competitive advantage
– Nordea Iss 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 ISS & Nordea: Facility Management in the Nordic Region - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Nordea Iss to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Nordea Iss 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 Iss 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 Iss 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 Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Nordea Iss 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 Iss 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.
Better consumer reach
– The expansion of the 5G network will help Nordea Iss to increase its market reach. Nordea Iss 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.
Creating value in data economy
– The success of analytics program of Nordea Iss has opened avenues for new revenue streams for the organization in the industry. This can help Nordea Iss to build a more holistic ecosystem as suggested in the ISS & Nordea: Facility Management in the Nordic Region case study. Nordea Iss can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Nordea Iss 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.
Manufacturing automation
– Nordea Iss can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People 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 Iss 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.
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 Nordea Iss 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.
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. Nordea Iss can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Nordea Iss 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Nordea Iss can use these opportunities to build new business models that can help the communities that Nordea Iss operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Threats ISS & Nordea: Facility Management in the Nordic Region External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study ISS & Nordea: Facility Management in the Nordic Region are -
High dependence on third party suppliers
– Nordea Iss 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.
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. Nordea Iss needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Regulatory challenges
– Nordea Iss 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.
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 Nordea Iss.
Technology acceleration in Forth Industrial Revolution
– Nordea Iss has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Nordea Iss 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.
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. Nordea Iss 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.
Environmental challenges
– Nordea Iss needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Nordea Iss can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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 Iss business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Nordea Iss 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.
Increasing wage structure of Nordea Iss
– 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 Iss.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Nordea Iss 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 ISS & Nordea: Facility Management in the Nordic Region .
Shortening product life cycle
– it is one of the major threat that Nordea Iss is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of ISS & Nordea: Facility Management in the Nordic Region 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 ISS & Nordea: Facility Management in the Nordic Region 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 ISS & Nordea: Facility Management in the Nordic Region 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 ISS & Nordea: Facility Management in the Nordic Region 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 ISS & Nordea: Facility Management in the Nordic Region 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 Iss needs to make to build a sustainable competitive advantage.
