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 - – increasing household debt because of falling income levels, increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization, technology disruption, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies,
increasing commodity prices, central banks are concerned over increasing inflation, 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 -
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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 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.
Interest costs
– Compare to the competition, Nordea Iss 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.
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.
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.
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.
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.
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.
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.
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.
No frontier risks strategy
– After analyzing the HBR case study ISS & Nordea: Facility Management in the Nordic Region, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People 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.
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.
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 -
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.
Buying journey improvements
– Nordea Iss can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. ISS & Nordea: Facility Management in the Nordic Region 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.
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.
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.
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Nordea Iss 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, ISS & Nordea: Facility Management in the Nordic Region, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
Building a culture of innovation
– managers at Nordea Iss 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.
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.
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.
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.
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.
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 -
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 .
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.
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.
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.
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.
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.
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.
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 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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Nordea Iss 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.
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 .
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.
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.