...Five Competitive Forces Analysis in the Insurance Industry RichardSmith Managerial Economics December 6, 2013 Industry Insurance is something that is needed by everyone today. It is used by individuals, business, corporations, etc. to help mitigate or minimize their financial risk. Various types of insurance exist today, from home, health, life, auto, travelers, indemnity, boat, renters, and even pet. Competition between insurance carriers is very stiff. In fact, in the United Kingdom (UK), the competition is so stringent, they have created a Competition Commission (CC), which is designed to ensure healthy competition between insurance companies in the UK for the ultimate benefit of the consumers and the economy ("Competition Commission GOV.UK."01). Many insurance companies have gotten caught up in having an unbalanced pool of insurers because they were not prepared and did not do their homework. The have to be very careful in their underwriting process to ensure they insure the most desirable individuals. Many insurance companies have learned quickly the value in the knowledge and power of information obtained from doing research and the huge financial risk associated with getting stuck with a poor unbalanced pool of insured. Therefore, many insurance companies today are utilizing various tools and setting themselves apart from the competition via the competitive forces in an effort to avoid the financial repercussions associated with not being prepared. That way...
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...Using Porter's Five Forces, answer (and discuss with your peers) the question, "Is healthcare an attractive industry?" Porter's Five Forces model was used in many different industries.The five forces are threat of new entrants, threat of substitute products or services, bargaining power of customers (buyers), bargaining power of suppliers, intensity of competitive rivalry. This theory is based on the concept that there are five forces that determine the competitive intensity and attractiveness of a market. Porter’s five forces help to identify where power lies in a business situation. This is useful both in understanding the strength of an organisation’s current competitive position, and the strength of a position that an organisation may look to move into (Cgma.org, 2014). After using Porter's Five Forces,I think healthcare is an attractive industry.But we should not only notice the value of healthcare industry ,but also create value. With 2014 witnessing the rollout of some significant elements of the Affordable Care Act, particularly health insurance exchanges and the expansion of Medicaid,the market of heathcare has a great opportunities. “Most participants and analysts agree on one thing. The system is broken and needs to radically change if we are to meet our goals of optimizing population health with limited resources. I believe the health industry will yield substantial returns for physician entrepreneurs, non-medical entrepreneurs and patients in the years to come as...
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...Running Head: COMPETITION, MARKETING MIX, AND PRICING Competittion, Marketing Mix, and Pricing Akeia Torres Strayer University HSA 305 Dr. Angela Smith August 29, 2013 Abstract Page Competition, Marketing Mix, and Pricing goes hand in hand with the services of the healthcare provider i choose. Througout this paper you I'll analyze the competitive environment of health s ervices. You will also see the diferent tools of the marketing mix that available. Although many any other healthcare providers have different purposes in objectives. Key Charactics of Services There are four distinctive characteristics of services. According to Koltler and Shalowitz those four are intangibility, inseparability, variability, and perishability. Intangibility is when services cannot be seen tasted, felt, heard, or smelled before the are brought. Inseparability is when services are produced and consumed simultaneously. Variability is when services are highly variable because the depend on who provides them and when and where they are provided. The last one is Pershisability, you cannot store services, you can only build capacity to perform them when they are needed. (Lotler, Phillip, Shalowitz, Joel and Stevens, Robert 1st Edition (2008)) Pinnacle Orthopedics falls under the characteristicsc of Intangibilty and Variable. The service provider has to follow certain things...
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...Porter’s Five Forces model The five forces model of analysis was developed by Michael Porter to analyze the competitive environment in which a product or company works. It identifies the five most common threats faced by firms in their local competitive environments and the conditions under which these threats are more or less likely to be present; these forces are the threat of entry, threat of rivalry, threat of substitutes, threat of buyers and the threat of suppliers. These threats increases a firm's costs, decreases a firm's revenues, or in other words they reduces a firm's performance. Industry Structure This model analyzes industry structure and by definition an industry is a group of firms that market products which are close substitutes for each other. Guardian Life Limited offers services such as Individual Benefit Plan and Employee Benefit Plan. The individual benefit plan includes benefits such as Critical Illness Plans, Traditional Insurance Plans, Universal Life & Equity Linked Plans, Interest Sensitive Plans, and other Plans. Also the Employee benefit plan includes: Group Life Insurance, Group Health Insurance, and Pension Administration. We will now state how the 5 forces model applies to Guardian Life Limited. Threat of Entry One reason why new entrants pose threat is that they bring additional production capacity. Unless the demand for a good or service is increasing, additional capacity holds consumers’ costs down, resulting in less revenue and lower...
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...The economic segment includes factors such as interest rates, inflation, trade factors, personal, and business savings. These factors affect the income received by individuals, business, and the company in question in this discussion. Inflation is a very critical factor in the operation of UnitedHealth Group organization because inflation rates affect the level of premiums that are determined by the company’s underwriters. When the inflation rate is high, the decision to raise the insurance premiums may be affected as the general prices of goods and service are also high. The economic segment also influences the profitability of the corporation at the great extent. When the economic conditions are favorable, the corporation may attract large customer base. Taxes imposed on a company, is another factor to consider when looking at the economic segment. When there is a budget deficit, the government has to tax the corporation more to fill the deficit. This will affect the corporation and the industry in general. The political segment is just another influential factor in the UnitedHealth Group company. The political segment highlights essential factors such as the antitrust law, taxation laws, deregulation philosophies, labor training laws, and educational philosophies. As with the economic segment, taxation laws are crucial factors in the political segment. The...
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...processes of the chosen company. [800 words maximum] Short introduction about the company Nib Insurance Company is an insurance company located in Ethiopia. At the moment, there are sixteen insurance companies in Ethiopia, of which one belongs to the government while others are privately owned. Except for foreign investors, the insurance industry in Ethiopia is open to local investors who full fill the conditions set by the National Bank of Ethiopia. Nib Insurance Company is one of the privately owned insurance companies. According to (www.nibinsuranceethiopia.com), it was established on May 2, 2002 by 818 shareholding members. Currently, the company has 21 branches and 199 staff members and gives a wide range of insurance services to its customers. Concerning the product/services of the company, Nib Insurance Company offers a diversified service to its customers. The company is delivering almost all types of insurance available in the industry. This can be taken as a disadvantage for the company and as an advantage to the customers. It can be taken as a disadvantage for the company because this gives the company a diversification mechanism. On the opposite, this can be taken as an advantage for the customers because they can have alternative choices which mean that a customer can have all services at one place. For example if we take an insurance company that only offers life insurance, this company may be lucrative one year and may cause a great loss the other year. In...
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...Providence, Rhode Island ENVIRONMENTAL ANALYSIS: Automobile insurance Industry Course: MGMT 6800 Yimeng Zhang October 4, 2014 Automobile insurance Industry- Environmental Analysis The motor vehicle insurance, refers to a kind of commercial insurance that offer liable for compensation to life or personal injury or property damage caused by motor vehicles due to natural disasters or accidents. Car insurance is a kind of property insurance. In the field of property insurance, motor insurance belongs to the young categories of insurance. This is because the car insurance comes and develops with the emergence and popularity of the car and. 1. Strategically Relevant Factors in the Macro-Environment-PESTEL Analysis PESTEL analysis focuses on the six principal components of strategic significance in the macro-environment: political factors, economic conditions, sociocultural forces, technological factors, (natural) environmental forces, and legal/regulatory factors. These are the significance factors of one industry varies and management will focus primarily on those with the greatest effect on their company. The most important factor in the vehicle insurance industry is Economic Factors. a. Political and legal factors The Automobile Insurance industry does not receive any direct assistance from the federal government in the form of tariffs. However, the National Association of Insurance Commissioners (NAIC) provides a forum for the development of uniform...
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...balThe global pharmaceutical industry THE GLOBAL PHARMACEUTICAL INDUSTRY INTRODUCTION According to Hunter s. Thomas "you can turn your back on person, but never turn your back on a drug, especially when it's waving a razor sharp hunting." The global pharmaceutical industry had done tremendous contribution to mankind, but now pharmaceutical companies are facing tough time in a decade. The case is broken in to different parts which is emphasized on how internal and external factors affecting the industry firstly, the main environmental forces currently affecting the industry through PEST analysis. Secondly, the implications of the changes in business environment that is internal factors through porter's five force theory. Finally, the use and limitations of the tools applied to solve case are discussed. ORIGIN AND EVOLUTION The present pharmaceutical industries are non-assembled and more of competitive but it had emerged in early 19th century in the Rhine valley near Basel Switzerland where dyestuffs were found to have antiseptic properties. Companies like Hoffman-la rochy, Sandoz, Novartis are all started as Rhine based family dyestuff and chemical companies, which are still doing tremendous business even to day. Slowly these chemical companies started making pharmaceuticals and synthetic chemicals and evolved as global players. In early 1940's the industry showed drastic changes such as introduction of penicillin and other drugs. In 1960's industry growing rapidly with the...
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...Company History TD bank for more than 150 years, has been providing excellent customer service .They have a model of wowing the customer. This wow Factor has bin embedded in the the Td culture since the beginning the bank.The bank first opened in 1852 as Portland Savings Bank in Portland, Maine. Later on grew through many mergers and became Peoples Heritage Bank in 1983. The opportunity for expanstion came up ,as Peoples Heritage Bank, by going through some acquisitions, there growth grew deeper into New England and took the name Banknorth. In Cherry Hill, New Jersey-based company called Commerce Bank was turning heads and getting a lot of attention. The customers that they had already were turning into fans as America’s Most Convenient Bank. Commerce Bank was Founded in 1973,The founder Vernon Hill was a CEO of a well know food chain called Burger King. Commerce Bank rapidly grew over the next 35 years into Philadelphia. New york ,south florida and Washington DC. Since the CEO was from burger king he brought many of his traditions to Commerce. For example longer house and being customer friendly and giving them what customer want. In this model commerce , began winning new customers with WOW! service and convenience. Bank north, In 2004 began to caputure the attention of many other banks. In doing very well and being one of the top 10 banks in the Unites states. In doing this it grabbed the attention of TD Bank group of Toronto. TD bank group shortly after became a large...
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...THE FIVE FORCES INDUSTRY COMPETITORS. Rivalries naturally develop between companies competing in the same market. Competitors use means such as advertising, introducing new products, more attractive customer service and warranties, and price competition to enhance their standing and market share in a specific industry. To Porter, the intensity of this rivalry is the result of factors like equally balanced companies, slow growth within an industry, high fixed costs, lack of product differentiation, overcapacity and price-cutting, diverse competitors, high-stakes investment, and the high risk of industry exit. There are also market entry barriers. PRESSURE FROM SUBSTITUTE PRODUCTS. Substitute products are the natural result of industry competition, but they place a limit on profitability within the industry. A substitute product involves the search for a product that can do the same function as the product the industry already produces. Porter uses the example of security brokers, who increasingly face substitutes in the form of real estate, money-market funds, and insurance. Substitute products take on added importance as their availability increases. BARGAINING POWER OF SUPPLIERS. Suppliers have a great deal of influence over an industry as they affect price increases and product quality. A supplier group exerts even more power over an industry if it is dominated by a few companies, there are no substitute products, the industry is not an important consumer for the suppliers...
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...driven decisions. This Federal law will affect market-driven decisions by controlling costs through competition. Providers have to compete by offering better services at lower prices and finding ways to economize and make their products and services attractive. If they can’t attract customers, they go out of business. This process helps make sure that they get the best value. Americans trust the market process when they buy food, clothes, computers, and even other insurance policies. Most intuitively understand that having individuals making choices – rather than the government making choices on their behalf – is a better way to control costs and ensure that they get the quality they want. The PPACA will affect each family differently, depending on their circumstance. The PPACA empowers government to dictate how insurance companies do business and set specifications for what insurance policies must cover. About three-fifths of Americans under the age of 65 currently have employer-sponsored insurance. Those in the individual market (and more of us will be in that market as employers drop group...
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...GRADUATE SCHOOL OF BUSINESS SCIENCES AND MANAGEMENT Platinum Insurance Company’s Marketing Program For Launching a new insurance product “Insure Your Hero” Design a marketing programme for launching a new product of your choice in a mature industry Page | 1 TABLE OF CONTENTS EXECUTIVE SUMMARY .................................................................................................................................. 3 OBJECTIVES OF THIS MARKETING PROGRAM ...................................................................................... 3 PROJECT TEAM ................................................................................................................................................ 4 INTRODUCTION ............................................................................................................................................... 5 SITUATIONAL ANALYSIS .............................................................................................................................. 6 INDUSTRY COMPETITIVE ANALYSIS ........................................................................................................ 7 PORTER’S FIVE FORCES MODEL ................................................................................................................ 8 PORTER’S COMPETITIVE STRATEGIES ................................................................................................. 10 TARGET MARKET..........................................
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...Competitive Companies and industry analysis The following competitor analysis will focus on the main rivalries of Walgreens in the United States as well as in Germany. The purpose is to evaluate the ‘market environment’ in order to decide on the appropriate entry strategy and to determine which current competitors constitute a threat for Walgreens. The competitor analysis is an essential measurement to improve decisions regarding the entry of Walgreens into the German market. The framework for the competitor analysis is based on the concept of ‚Porter’s Five Forces’. Porter identified five competitive forces that shape every single industry and market. These forces help us to analyze everything from the intensity of competition to the profitability and attractiveness of an industry. Figure 1 shows the relationship between the different competitive forces. | Figure 1: Porter\'s five competitive forces | Threats of new entrants and barriers to new entry Germany has made some restrictions regarding U.S trade and investment and the government has established formal barriers. It is therefore the case that foreign companies have a harder time to enter the German market because of the government restrictions. Government institutions need to verify the safety and quality of the products and companies need invest more for that reason (Strong, 2013). The bargaining power of suppliers According to M. Porter (2008) the threat of bargaining power of...
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...ANALYSIS Industry analysis is a tool that facilitates a company's understanding of its position relative to other companies that produce similar products or services. Understanding the forces at work in the overall industry is an important component of effective strategic planning. Industry analysis enables small business owners to identify the threats and opportunities facing their businesses, and to focus their resources on developing unique capabilities that could lead to a competitive advantage. "Many small business owners and executives consider themselves at worst victims, and at best observers of what goes on in their industry. They sometimes fail to perceive that understanding your industry directly impacts your ability to succeed. Understanding your industry and anticipating its future trends and directions gives you the knowledge you need to react and control your portion of that industry," Kenneth J. Cook wrote in his bookThe AMA Complete Guide to Strategic Planning for Small Business."However, your analysis of this is significant only in a relative sense. Since both you and your competitors are in the same industry, the key is in finding the differing abilities between you and the competition in dealing with the industry forces that impact you. If you can identify abilities you have that are superior to competitors, you can use that ability to establish a competitive advantage." An industry analysis consists of three major elements: the underlying forces at work in...
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...Industry analysis is a tool that facilitates a company's understanding of its position relative to other companies that produce similar products or services. Understanding the forces at work in the overall industry is an important component of effective strategic planning. Industry analysis enables small business owners to identify the threats and opportunities facing their businesses, and to focus their resources on developing unique capabilities that could lead to a competitive advantage. "Many small business owners and executives consider themselves at worst victims, and at best observers of what goes on in their industry. They sometimes fail to perceive that understanding your industry directly impacts your ability to succeed. Understanding your industry and anticipating its future trends and directions gives you the knowledge you need to react and control your portion of that industry," Kenneth J. Cook wrote in his book The AMA Complete Guide to Strategic Planning for Small Business. "However, your analysis of this is significant only in a relative sense. Since both you and your competitors are in the same industry, the key is in finding the differing abilities between you and the competition in dealing with the industry forces that impact you. If you can identify abilities you have that are superior to competitors, you can use that ability to establish a competitive advantage." An industry analysis consists of three major elements: the underlying forces at work in the...
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