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 - – competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices, increasing household debt because of falling income levels, increasing energy prices, there is increasing trade war between United States & China, central banks are concerned over increasing inflation, customer relationship management is fast transforming because of increasing concerns over data privacy,
banking and financial system is disrupted by Bitcoin and other crypto currencies, 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 -
Operational resilience
– The operational resilience strategy in the CIGNA Property and Casualty Reengineering (A) Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Strong track record of project management
– Cigna Reengineering is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
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.
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.
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.
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.
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 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.
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.
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.
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.
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 -
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.
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.
Interest costs
– Compare to the competition, Cigna Reengineering has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
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.
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.
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.
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.
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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study CIGNA Property and Casualty Reengineering (A), is just above the industry average. Cigna Reengineering needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
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.
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.
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 -
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.
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.
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.
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Cigna Reengineering can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
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.
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.
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.
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.
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.
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.
Manufacturing automation
– Cigna Reengineering can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
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 -
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.
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.
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.
Environmental challenges
– Cigna Reengineering needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Cigna Reengineering can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
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.
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.
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.
Consumer confidence and its impact on Cigna Reengineering demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
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.
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.
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 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.
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.
