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SWOT Analysis of Denmark

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Denmark is a well-developed European country known for rapid technological advancement and high quality of life. What’s more, the EU member state has a thriving economy that continues to grow. With all this in mind, it may seem like Denmark stands to be one of the major European powers of the future.

In this article, we’ll use SWOT analysis — which reviews the Strengths, Weaknesses, Opportunities, and Threats affecting an organization or state — to assess this claim. By reviewing the current and potential standings of Denmark, it will be evident how this country is set to perform in the future.

Strengths of Denmark

Here are four of Denmark’s major Strengths:

Strong Danish Economy

One of Denmark’s biggest Strengths is its powerful economy. Given its small geographical size, Denmark has a disproportionately strong economy. This is well illustrated by its gross domestic product (GDP) per capita, which is one of the highest in the world. This strong economy ensures residents a high quality of life and allows the country to stay up to date with technological advancements while minimizing social unrest.

European Union

From a political perspective, Denmark is afforded a considerable advantage thanks to its membership in the European Union as described in our recent PESTLE analysis of the country. As an EU member state, the country has favorable trade agreements with other European countries. What’s more, this EU membership allows Danish residents greater freedom of movement, further improving their lives.

Social Order

Denmark is known for having good social order. Not only does the country have low crime rates, but residents from varying cultures and religions get along with little friction. This means few protests and, importantly, a cohesive society. Having a strong social order allows Denmark’s residents to experience improved productivity and a better quality of life.

Little Corruption

Denmark is considered one of the most transparent countries in the world, and has extremely low corruption rates. Generally speaking, corruption is a negative weight on society. Because of these low corruption rates, Denmark’s public and private organizations are more effective than otherwise, and the economy operates as it should.

Weaknesses

Here are three of Denmark’s major Weaknesses:

Small Geographical Size

One Weakness that will be very difficult for Denmark to overcome is its small geographical size. The country is significantly smaller than other European powerhouses, such as Germany or France. Not only does this mean that Denmark has fewer natural resources, but it also means that the country has less space available for farming or other space-intensive ventures.

Fossil Fuel Usage

Despite the growing use of renewable energy sources, Denmark is still very much dependent on fossil fuels. A large portion of the country’s energy needs are accounted for by fossil fuel energy sources; previously, the country also exported some of its oil and gas reserves. Right now, this dependence on fossil fuels primarily has environmental consequences. However, the introduction of new environmental taxes may make it more costly for Denmark to continue using fossil fuels.

Public Sector Dependency

A large portion of Denmark’s job market is accounted for by the public sector. This shows the country has been effective in driving economic growth (by creating jobs in the public sector); however, this could be a serious Threat in times of economic downturn.

Opportunities in Denmark

Here are two of Denmark’s major Opportunities:

Renewable Energy

One of the greatest Opportunities for Denmark is renewable energy. As discussed above, the country generates much of its energy from unsustainable sources. However, there is easily the potential for this to change, given Denmark’s wealth and scientific advancement. In fact, Denmark has already taken steps to capitalize on renewable energy, and is one of the world’s pioneers of wind energy.

Brexit

In many ways, Brexit is a Threat. With that said, it may also be an Opportunity for Denmark. With the United Kingdom leaving the European Union, thousands of European countries will look to relocate their London offices to other European cities. Denmark’s Copenhagen (and other major cities) good be a strong contender for these relocations, which would drive new money into the Danish economy.

Threats

Here are two of Denmark’s major Threats:

Economic Downturn

As with any country, one of the biggest Threats for Denmark is that of an economic downturn. For Denmark, this is a particularly scary Threat, since much of the country’s job market is propped up by the public sector. If the country’s public entities faced severe austerity measures, they might be forced to cut hundreds of thousands of jobs, which would greatly affect many Danish families. This, in turn, would harm other areas of the country’s economy.

Brexit

Brexit is largely a Threat for member states of the European Union. The United Kingdom is a major trade partner for many European countries, and the severance of these long-standing ties could have devastating consequences. Unfortunately, it’s impossible to know exactly what effects Brexit will have on the economies of other European societies, so time will have to tell what this means for Denmark.

Denmark SWOT analysis: Conclusion

At present, Denmark has a wide variety of Strengths. Most notable is the country’s powerful economy, which is demonstrated by a high GDP per capita. Other than that, the country has solid political standings (thanks to its membership in the European Union) and a good social backdrop, with widespread order and little corruption. In terms of Weaknesses, the country is small, uses large amounts of fossil fuels, and very much relies on the public sector.

Looking to the future, the most notable Opportunities are Brexit — which could see Denmark becoming a bigger part of the European business landscape — and the development and implementation of renewable energy systems. Brexit is also a Threat for the country, as is an economic downturn which might be amplified by the country’s dominant public sector.

Overall, it seems that Denmark is in relatively good standing as far as European countries go. If it can better prepare for unfavorable economic conditions (by slowly reducing public sector dependency) and identify any hitherto unforeseen consequences of Brexit, there really isn’t much to worry about!

Image by Joe Kniesek