Norwegian Air Shuttle (0FGH) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Norwegian Air Shuttle (United Kingdom)

Based on various researches at Oak Spring University , Norwegian Air Shuttle is operating in a macro-environment that has been destablized by – increasing transportation and logistics costs, central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies, increasing energy prices, digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, there is backlash against globalization, etc

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Introduction to SWOT Analysis of Norwegian Air Shuttle

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Norwegian Air Shuttle can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Norwegian Air Shuttle, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Norwegian Air Shuttle 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Norwegian Air Shuttle can be done for the following purposes –
1. Strategic planning of Norwegian Air Shuttle
2. Improving business portfolio management of Norwegian Air Shuttle
3. Assessing feasibility of the new initiative in United Kingdom
4. Making a Airline sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Norwegian Air Shuttle

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Strengths of Norwegian Air Shuttle | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Norwegian Air Shuttle are -

Cross disciplinary teams

– Horizontal connected teams at the Norwegian Air Shuttle are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.

Digital Transformation in Airline industry

- digital transformation varies from industry to industry. For Norwegian Air Shuttle digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Norwegian Air Shuttle 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)

– Norwegian Air Shuttle has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Norwegian Air Shuttle staying ahead in the Airline industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Diverse revenue streams

– Norwegian Air Shuttle is present in almost all the verticals within the Airline industry. This has provided Norwegian Air Shuttle 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.

Training and development

– Norwegian Air Shuttle has one of the best training and development program in Transportation industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.

Innovation driven organization

– Norwegian Air Shuttle is one of the most innovative firm in Airline sector.

High brand equity

– Norwegian Air Shuttle has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Norwegian Air Shuttle to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Learning organization

- Norwegian Air Shuttle 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 Norwegian Air Shuttle is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Norwegian Air Shuttle emphasize – knowledge, initiative, and innovation.

Low bargaining power of suppliers

– Suppliers of Norwegian Air Shuttle in the Transportation sector have low bargaining power. Norwegian Air Shuttle has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Norwegian Air Shuttle to manage not only supply disruptions but also source products at highly competitive prices.

Analytics focus

– Norwegian Air Shuttle 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 Airline industry. The technology infrastructure of United Kingdom is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.

Strong track record of project management in the Airline industry

– Norwegian Air Shuttle is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Highly skilled collaborators

– Norwegian Air Shuttle has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Airline industry. Secondly the value chain collaborators of Norwegian Air Shuttle have helped the firm to develop new products and bring them quickly to the marketplace.

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Weaknesses of Norwegian Air Shuttle | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Norwegian Air Shuttle are -

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Norwegian Air Shuttle is slow explore the new channels of communication. These new channels of communication can help Norwegian Air Shuttle to provide better information regarding Airline products and services. It can also build an online community to further reach out to potential customers.

Employees’ less understanding of Norwegian Air Shuttle strategy

– From the outside it seems that the employees of Norwegian Air Shuttle 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 cash cycle compare to competitors

Norwegian Air Shuttle has a high cash cycle compare to other players in the Airline industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Workers concerns about automation

– As automation is fast increasing in the Airline industry, Norwegian Air Shuttle 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.

Compensation and incentives

– The revenue per employee of Norwegian Air Shuttle is just above the Airline industry average. It 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 bargaining power of channel partners in Airline industry

– because of the regulatory requirements in United Kingdom, Norwegian Air Shuttle 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 Airline industry.

High operating costs

– Compare to the competitors, Norwegian Air Shuttle has high operating costs in the Airline industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Norwegian Air Shuttle lucrative customers.

Skills based hiring in Airline industry

– The stress on hiring functional specialists at Norwegian Air Shuttle 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.

Ability to respond to the competition

– As the decision making is very deliberative at Norwegian Air Shuttle, in the dynamic environment of Airline industry it has struggled to respond to the nimble upstart competition. Norwegian Air Shuttle has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

High dependence on Norwegian Air Shuttle ‘s star products

– The top 2 products and services of Norwegian Air Shuttle still accounts for major business revenue. This dependence on star products in Airline industry has resulted into insufficient focus on developing new products, even though Norwegian Air Shuttle has relatively successful track record of launching new products.

No frontier risks strategy

– From the 10K / annual statement of Norwegian Air Shuttle, it seems that company is thinking out the frontier risks that can impact Airline industry. 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.

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Norwegian Air Shuttle Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Norwegian Air Shuttle are -

Better consumer reach

– The expansion of the 5G network will help Norwegian Air Shuttle to increase its market reach. Norwegian Air Shuttle 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.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Norwegian Air Shuttle is facing challenges because of the dominance of functional experts in the organization. Norwegian Air Shuttle can utilize new technology in the field of Airline industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Developing new processes and practices

– Norwegian Air Shuttle can develop new processes and procedures in Airline 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Norwegian Air Shuttle in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Airline industry, and it will provide faster access to the consumers.

Buying journey improvements

– Norwegian Air Shuttle can improve the customer journey of consumers in the Airline industry by using analytics and artificial intelligence. It 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.

Low interest rates

– Even though inflation is raising its head in most developed economies, Norwegian Air Shuttle 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.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Norwegian Air Shuttle 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 Norwegian Air Shuttle to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Norwegian Air Shuttle can use these opportunities to build new business models that can help the communities that Norwegian Air Shuttle operates in. Secondly it can use opportunities from government spending in Airline sector.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Norwegian Air Shuttle 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 Norwegian Air Shuttle to hire the very best people irrespective of their geographical location.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Airline industry, but it has also influenced the consumer preferences. Norwegian Air Shuttle can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

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 Norwegian Air Shuttle 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.

Using analytics as competitive advantage

– Norwegian Air Shuttle has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Airline sector. This continuous investment in analytics has enabled Norwegian Air Shuttle to build a competitive advantage using analytics. The analytics driven competitive advantage can help Norwegian Air Shuttle to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

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. Norwegian Air Shuttle can explore opportunities that can attract volunteers and are consistent with its mission and vision.

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Threats Norwegian Air Shuttle External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Norwegian Air Shuttle are -

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.

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 Norwegian Air Shuttle business can come under increasing regulations regarding data privacy, data security, etc.

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. Norwegian Air Shuttle needs to understand the core reasons impacting the Airline industry. This will help it in building a better workplace.

Consumer confidence and its impact on Norwegian Air Shuttle 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 Airline industry and other sectors.

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 Norwegian Air Shuttle.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Norwegian Air Shuttle may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Airline sector.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Norwegian Air Shuttle 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 Norwegian Air Shuttle prominent markets.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Norwegian Air Shuttle in Airline industry. The Airline 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.

Easy access to finance

– Easy access to finance in Airline industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Norwegian Air Shuttle can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Environmental challenges

– Norwegian Air Shuttle 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. Norwegian Air Shuttle can take advantage of this fund but it will also bring new competitors in the Airline industry.

Shortening product life cycle

– it is one of the major threat that Norwegian Air Shuttle is facing in Airline sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Stagnating economy with rate increase

– Norwegian Air Shuttle 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 Airline industry.

Regulatory challenges

– Norwegian Air Shuttle 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 Airline industry regulations.

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Weighted SWOT Analysis of Norwegian Air Shuttle Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Norwegian Air Shuttle 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 Norwegian Air Shuttle 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 Norwegian Air Shuttle 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 Norwegian Air Shuttle 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 Norwegian Air Shuttle needs to make to build a sustainable competitive advantage.

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