Elaborative SWOT Analysis of NCC – A Swedish Construction Company

Quick Stats on NCC

Founder	Axel Johnson
Year Founded	1988
Origin	Sweden
No. of Employees	14,500+
Company Type	Public
Market Cap	$14.193 Billion (2022)
Annual Revenue	53,9 Billion SEK (2020)
Net Income/ Profit	N/A

 

Products & Services by NCC

• Residential
• Commercial
• Infrastructure developments

Competitors of NCC

The top 6 competitors of NCC are:

• AF Gruppen
• Skanska
• Peab
• Per Aarsleff
• Veidekke
• YIT

As now we have a better understanding of NCC, let’s look into the SWOT Analysis of NCC.

SWOT Analysis of NCC

A SWOT analysis identifies a company’s strengths, weaknesses, opportunities, and threats. A proven and true management paradigm that allows NCC to compare its business and performance with competitors and the industry as a whole.

So let us go ahead and first have a glance at the strengths of NCC from the SWOT analysis of NCC.

Strengths of NCC

Your organization’s strength is something that makes it stand out from the rest. It can be a competitive advantage that sets it apart from its competitors. Some of the strengths of NCC are as follows –

• Automation of Activities: Automation of activities has given rise to the density of quality to NCC products and has permitted the company to scale up and scale down based on the demand conditions in the market.
• Good Returns on Capital Expenditure: NCC is moderately successful at the performance of new projects and has developed good returns on capital expenditure by creating new revenue streams.
• High Level of Customer Satisfaction: Having a committed relationship with their customers helps them to achieve a high level of customer fulfilment among present customers and good brand equity among future customers.
• Strong Dealer Community: This culture encourages the dealers to promote the company’s products and services and also helps the sales team to explain the benefits of the products to the customers.
• Genuine Suppliers: It has a powerful base of reliable suppliers of raw material, thus facilitating the company to survive any supply chain bottlenecks. 
• Highly Skilled Workforce: NCC is empowering large resources in the training and development of its employees, resulting in a workforce that is not only highly competent but also motivated to achieve a surplus.

Weaknesses of NCC

Weaknesses are negative factors that can prevent an organization from achieving its goals and objectives. Some of these include a poor brand, high levels of debt, inadequate supply chains, and lack of capital. So here are some of the weaknesses of NCC –

• Gaps in the Product Range: There are gaps in the product range sold by the company. This deficiency of options can give a new competitor a foothold in the market.
• High Attrition Rate in the Workforce: As compared to other organizations, NCC has a higher deterioration rate and has to spend a lot more as compared to its competitors.
• Days Inventory is High as Compared to the Competitors: Making the company boost more capital to empower in the channel. This can affect the long-term growth of NCC.
• More Investment in New Technologies: As the company embarks on its next phase of expansion, it needs to invest in new technologies that can help it achieve its goals. Currently, investment in technology does not meet the ideas that a company has.
• Investment in Research and Development: Investment in Research and Development is below the rapidly growing players in the industry. Even though NCC is consuming above the industry average on Research and Development, it has not been able to compete with the leading players in the industry regarding innovation. 

Opportunities for NCC

Opportunity is a type of competitive advantage that can be gained from various external factors. For instance, if a country lowers its tariffs, a car manufacturer can benefit by exporting its products to a new market. Opportunities for NCC are as follows –

• New Technology: NCC may now use differential pricing in the new market thanks to the new technology. It will motivate the company to reinforce its existing clients via excellent service while also attracting new customers through various value-oriented offers.
• New Markets: The adoption of new technology criteria and government free trade agreements has provided NCC with an opportunity to enter a newly developing market.
• Stable Free Cash Flow: Stable free cash flow gives opportunities to empower contiguous product segments. With extra cash in the bank, the company can empower new technologies as well as in new product segments.
• New Trends in Consumer Behaviour: New trends in consumer behavior can open up a new market for NCC. It gives a great opportunity for the organization to build new revenue streams and modify them into new product categories too.
• Low Transportation Cost: Decreasing the cost of transportation because of shorter shipping prices can also bring down the cost of NCC’s products thus providing an opportunity to the company – either to increase the profitability of the company or acceptable on the benefits to the customers to gain market share. So this is one of the biggest opportunities for NCC because by doing this they can save a lot of money.
• New Taxation Policy: The new taxation policy can considerably impact the way of doing business and can open new opportunities for established players such as NCC to increase its profitability.

Threats to NCC

Many factors can affect your business outside its immediate environment. Some of these include factors such as a shortage of skilled workers or a supply chain issue. The threats NCC is facing are as follows –

• High Competition: NCC’s stable profitability has increased many competitors in the industry over the last two years which has put downward pressure on not only profitability but also on overall sales, so this is one of the biggest threats for NCC. 
• Currency Fluctuations: As the company is operating in numerous countries it is exposed to currency fluctuations especially given the volatile political climate in several of the markets across the world.
• Different Liability Laws: Liability laws in different countries are different and NCC may be exposed to various liability claims given changes in policies in those markets.
• Increasing Level of Payment: Rising pay levels, especially movements such as $15 an hour and increasing prices in China, can lead to serious pressure on the profitability of NCC.
• Competitors Advance Technologies: New technologies developed by competitors or market disruptors could be a serious threat to the industry in the medium to long term future. This is because due to the new technologies developed by the competitors they would be able to do more production, and because of more production, they would be able to supply more as per the demand. New technologies also help in reducing the cost of production.
• Increasing Trend Towards Isolationism: An increasing trend towards isolationism in the American economy can lead to similar reactions from other governments, thus negatively impacting international sales.

This ends our elaborative SWOT analysis of NCC. Let us conclude our learning below.