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 - – cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, supply chains are disrupted by pandemic ,
increasing government debt because of Covid-19 spendings, geopolitical disruptions, 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 -
High brand equity
– Cigna Reengineering has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Cigna Reengineering to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Cigna Reengineering 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 industry. The technology infrastructure suggested by Richard L. Nolan, Donna B. Stoddard, Elise Martin, Chiara Francalanci can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Effective Research and Development (R&D)
– Cigna Reengineering has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study CIGNA Property and Casualty Reengineering (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
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.
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.
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.
Diverse revenue streams
– Cigna Reengineering is present in almost all the verticals within the industry. This has provided firm in CIGNA Property and Casualty Reengineering (A) case study 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.
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.
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.
Learning organization
- Cigna Reengineering 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 Cigna Reengineering is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in CIGNA Property and Casualty Reengineering (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
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.
Increasing silos among functional specialists
– The organizational structure of Cigna Reengineering is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Cigna Reengineering needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Cigna Reengineering to focus more on services rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of Cigna Reengineering, firm in the HBR case study CIGNA Property and Casualty Reengineering (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Cigna Reengineering supply chain. Even after few cautionary changes mentioned in the HBR case study - CIGNA Property and Casualty Reengineering (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Cigna Reengineering vulnerable to further global disruptions in South East Asia.
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study CIGNA Property and Casualty Reengineering (A), in the dynamic environment Cigna Reengineering has struggled to respond to the nimble upstart competition. Cigna Reengineering has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High cash cycle compare to competitors
Cigna Reengineering has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
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.
Slow decision making process
– As mentioned earlier in the report, Cigna Reengineering has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Cigna Reengineering even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
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.
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.
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 -
Better consumer reach
– The expansion of the 5G network will help Cigna Reengineering to increase its market reach. Cigna Reengineering 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.
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.
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.
Buying journey improvements
– Cigna Reengineering can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. CIGNA Property and Casualty Reengineering (A) suggest that firm 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.
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.
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.
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.
Leveraging digital technologies
– Cigna Reengineering can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Learning at scale
– Online learning technologies has now opened space for Cigna Reengineering to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Cigna Reengineering 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, as suggested in case study, CIGNA Property and Casualty Reengineering (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Cigna Reengineering can develop new processes and procedures in Technology & Operations 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.
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.
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 -
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 .
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.
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) .
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Cigna Reengineering in the Technology & Operations sector and impact the bottomline of the organization.
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.
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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Cigna Reengineering with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
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 Cigna Reengineering.
Stagnating economy with rate increase
– Cigna Reengineering 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 field.
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.
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.