Case Study Description of CIGNA Property and Casualty Reengineering (A)
Reengineering was introduced at CIGNA Corp. in 1988. CIGNA entered a second wave reengineering effort through a major project at CIGNA P&C, one of CIGNA's larger businesses. P&C was in financial crisis and as a result brought in a new executive team in 1991 to head the transformation effort. This case analyzes the phases of P&C transformation, P&C's business process redesign, their use of information technology in the form of client/server architecture to support the strategy, and the use of the balanced scorecard to drive transformation. Presents the progress of P&C's effort as of January 1995--marking the end of Phase I (analysis and design) and looking forward to Phase 2 (implementation).
Authors :: Richard L. Nolan, Donna B. Stoddard, Elise Martin, Chiara Francalanci
Swot Analysis of "CIGNA Property and Casualty Reengineering (A)" written by Richard L. Nolan, Donna B. Stoddard, Elise Martin, Chiara Francalanci includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cigna Reengineering facing as an external strategic factors. Some of the topics covered in CIGNA Property and Casualty Reengineering (A) case study are - Strategic Management Strategies, Business processes, Collaboration, Crisis management, Data, Design, Growth strategy, IT, Organizational structure, Project management, Recession, Strategy execution and Technology & Operations.
Some of the macro environment factors that can be used to understand the CIGNA Property and Casualty Reengineering (A) casestudy better are - – there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, cloud computing is disrupting traditional business models, technology disruption, digital marketing is dominated by two big players Facebook and Google,
central banks are concerned over increasing inflation, increasing commodity prices, etc
Introduction to SWOT Analysis of CIGNA Property and Casualty Reengineering (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in CIGNA Property and Casualty Reengineering (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cigna Reengineering, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cigna Reengineering 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 CIGNA Property and Casualty Reengineering (A) can be done for the following purposes –
1. Strategic planning using facts provided in CIGNA Property and Casualty Reengineering (A) case study
2. Improving business portfolio management of Cigna Reengineering
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Cigna Reengineering
Strengths CIGNA Property and Casualty Reengineering (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cigna Reengineering in CIGNA Property and Casualty Reengineering (A) Harvard Business Review case study are -
Ability to lead change in Technology & Operations field
– Cigna Reengineering 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 Cigna Reengineering in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Cigna Reengineering has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Cigna Reengineering has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Innovation driven organization
– Cigna Reengineering is one of the most innovative firm in sector. Manager in CIGNA Property and Casualty Reengineering (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Training and development
– Cigna Reengineering has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in CIGNA Property and Casualty Reengineering (A) Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Ability to recruit top talent
– Cigna Reengineering is one of the leading recruiters in the industry. Managers in the CIGNA Property and Casualty Reengineering (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Technology & Operations industry
– CIGNA Property and Casualty Reengineering (A) firm has clearly differentiated products in the market place. This has enabled Cigna Reengineering to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Cigna Reengineering to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Cigna Reengineering 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.
Low bargaining power of suppliers
– Suppliers of Cigna Reengineering in the sector have low bargaining power. CIGNA Property and Casualty Reengineering (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Cigna Reengineering to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Cigna Reengineering in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Cigna Reengineering digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Cigna Reengineering 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.
Highly skilled collaborators
– Cigna Reengineering has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in CIGNA Property and Casualty Reengineering (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the Cigna Reengineering 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.
Weaknesses CIGNA Property and Casualty Reengineering (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of CIGNA Property and Casualty Reengineering (A) are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the CIGNA Property and Casualty Reengineering (A) HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Cigna Reengineering has relatively successful track record of launching new products.
Lack of clear differentiation of Cigna Reengineering products
– To increase the profitability and margins on the products, Cigna Reengineering needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners
– Because of the regulatory requirements, Richard L. Nolan, Donna B. Stoddard, Elise Martin, Chiara Francalanci suggests that, Cigna Reengineering 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 industry.
Slow to strategic competitive environment developments
– As CIGNA Property and Casualty Reengineering (A) HBR case study mentions - Cigna Reengineering takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Cigna Reengineering is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study CIGNA Property and Casualty Reengineering (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Cigna Reengineering 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.
Capital Spending Reduction
– Even during the low interest decade, Cigna Reengineering has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Need for greater diversity
– Cigna Reengineering 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.
Aligning sales with marketing
– It come across in the case study CIGNA Property and Casualty Reengineering (A) 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 CIGNA Property and Casualty Reengineering (A) can leverage the sales team experience to cultivate customer relationships as Cigna Reengineering is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study CIGNA Property and Casualty Reengineering (A) 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 Cigna Reengineering 's lucrative customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study CIGNA Property and Casualty Reengineering (A), it seems that the employees of Cigna Reengineering 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.
Opportunities CIGNA Property and Casualty Reengineering (A) | 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 CIGNA Property and Casualty Reengineering (A) are -
Building a culture of innovation
– managers at Cigna Reengineering 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 Technology & Operations segment.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Cigna Reengineering 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 Cigna Reengineering to hire the very best people irrespective of their geographical location.
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. Cigna Reengineering can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Cigna Reengineering can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Cigna Reengineering is facing challenges because of the dominance of functional experts in the organization. CIGNA Property and Casualty Reengineering (A) case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Cigna Reengineering in the consumer business. Now Cigna Reengineering can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Cigna Reengineering has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
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 Cigna Reengineering 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 Cigna Reengineering in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of Cigna Reengineering has opened avenues for new revenue streams for the organization in the industry. This can help Cigna Reengineering to build a more holistic ecosystem as suggested in the CIGNA Property and Casualty Reengineering (A) case study. Cigna Reengineering can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Cigna Reengineering has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study CIGNA Property and Casualty Reengineering (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Cigna Reengineering to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Cigna Reengineering 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Cigna Reengineering can use these opportunities to build new business models that can help the communities that Cigna Reengineering operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Threats CIGNA Property and Casualty Reengineering (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study CIGNA Property and Casualty Reengineering (A) are -
Shortening product life cycle
– it is one of the major threat that Cigna Reengineering is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Cigna Reengineering will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Increasing wage structure of Cigna Reengineering
– 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 Cigna Reengineering.
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Cigna Reengineering can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study CIGNA Property and Casualty Reengineering (A), Cigna Reengineering may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
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. Cigna Reengineering needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
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 Cigna Reengineering business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Cigna Reengineering in the Technology & Operations industry. The Technology & Operations 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Cigna Reengineering 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 CIGNA Property and Casualty Reengineering (A) .
High dependence on third party suppliers
– Cigna Reengineering 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.
Technology acceleration in Forth Industrial Revolution
– Cigna Reengineering has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Cigna Reengineering needs to keep up with the evolution of technology in the Technology & Operations 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.
Regulatory challenges
– Cigna Reengineering 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 Technology & Operations industry regulations.
Weighted SWOT Analysis of CIGNA Property and Casualty Reengineering (A) 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 CIGNA Property and Casualty Reengineering (A) 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 CIGNA Property and Casualty Reengineering (A) 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 CIGNA Property and Casualty Reengineering (A) 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 CIGNA Property and Casualty Reengineering (A) 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 Cigna Reengineering needs to make to build a sustainable competitive advantage.