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, technology disruption, increasing energy prices, cloud computing is disrupting traditional business models, increasing commodity prices, increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google,
central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies, 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 -
Ability to lead change in Leadership & Managing People field
– Nordea Iss 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 Nordea Iss in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
Innovation driven organization
– Nordea Iss is one of the most innovative firm in sector. Manager in ISS & Nordea: Facility Management in the Nordic Region Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– 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.
Effective Research and Development (R&D)
– Nordea Iss 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 ISS & Nordea: Facility Management in the Nordic Region - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
Learning organization
- Nordea Iss 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 Iss is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in ISS & Nordea: Facility Management in the Nordic Region Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
Low bargaining power of suppliers
– Suppliers of Nordea Iss in the sector have low bargaining power. ISS & Nordea: Facility Management in the Nordic Region has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Nordea Iss to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Nordea Iss has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Nordea Iss to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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 -
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Nordea Iss needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Skills based hiring
– The stress on hiring functional specialists at Nordea Iss 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.
Slow decision making process
– As mentioned earlier in the report, Nordea Iss 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 Iss 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.
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.
Increasing silos among functional specialists
– The organizational structure of Nordea Iss is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Nordea Iss needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Nordea Iss to focus more on services rather than just following the product oriented approach.
Aligning sales with marketing
– It come across in the case study ISS & Nordea: Facility Management in the Nordic Region 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 ISS & Nordea: Facility Management in the Nordic Region can leverage the sales team experience to cultivate customer relationships as Nordea Iss is planning to shift buying processes online.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the ISS & Nordea: Facility Management in the Nordic Region 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 Nordea Iss has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Nordea Iss is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study ISS & Nordea: Facility Management in the Nordic Region can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High 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 Iss supply chain. Even after few cautionary changes mentioned in the HBR case study - ISS & Nordea: Facility Management in the Nordic Region, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Nordea Iss vulnerable to further global disruptions in South East Asia.
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 -
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.
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.
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. Nordea Iss can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for Nordea Iss 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Nordea Iss 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.
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.
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.
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.
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.
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.
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 Nordea Iss in the consumer business. Now Nordea Iss can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Nordea Iss 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.
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.
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 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.
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.
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.
Stagnating economy with rate increase
– Nordea Iss 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.
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.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Nordea Iss can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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 Iss in the Leadership & Managing People 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.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study ISS & Nordea: Facility Management in the Nordic Region, Nordea Iss 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 .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Nordea Iss with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
