Conseco Senior Health Insurance: A Strategic Problem of Reputation and Regulation SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Conseco Senior Health Insurance: A Strategic Problem of Reputation and Regulation
In 2007 Conseco's CEO, C. James Prieur, faced a complicated set of problems with his company's long-term care (LTC) insurance subsidiary, Conseco Senior Health Insurance (CSHI). CSHI faced the threat of congressional hearings and an investigation by the U.S. Government Accountability Office, triggered by an unflattering New York Times article alleging that CSHI had an unusually large number of customer complaints and was denying legitimate claims. This threat came in addition to broader systemic problems, including the fact that the entire LTC industry was barely profitable. What little profitability existed was dependent on the goodwill of state insurance regulators, to whom the industry was highly beholden for approvals of rate increases to keep it afloat. Furthermore, CSHI had unique strategic challenges that could not be ignored: First, the expense of administering CSHI's uniquely heterogeneous set of policies put it at a disadvantage relative to the rest of the industry and made rate increases especially necessary. Second, state regulators were negatively predisposed toward Conseco because of its notorious reputation and thus were often unwilling to grant rate increases. Finally, CSHI was dependent on capital infusions totaling more than $1 billion from its parent company, Conseco, for which Conseco had received no dividends in return. Faced with pressure from Conseco shareholders and the looming congressional investigations, what should Prieur do? Students will discuss the available options in the context of a long-term relationship between Conseco and state insurance regulators. Prieur's solution to this problem proved to be innovative for the industry and to have far-reaching consequences for CSHI's corporate structure.
Swot Analysis of "Conseco Senior Health Insurance: A Strategic Problem of Reputation and Regulation" written by Nicola Persico, James C. Prieur includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Conseco Cshi facing as an external strategic factors. Some of the topics covered in Conseco Senior Health Insurance: A Strategic Problem of Reputation and Regulation case study are - Strategic Management Strategies, Policy and Global Business.
Some of the macro environment factors that can be used to understand the Conseco Senior Health Insurance: A Strategic Problem of Reputation and Regulation casestudy better are - – there is increasing trade war between United States & China, increasing energy prices, competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization, increasing commodity prices,
increasing household debt because of falling income levels, technology disruption, etc
Introduction to SWOT Analysis of Conseco Senior Health Insurance: A Strategic Problem of Reputation and Regulation
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Conseco Senior Health Insurance: A Strategic Problem of Reputation and Regulation case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Conseco Cshi, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Conseco Cshi 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 Conseco Senior Health Insurance: A Strategic Problem of Reputation and Regulation can be done for the following purposes –
1. Strategic planning using facts provided in Conseco Senior Health Insurance: A Strategic Problem of Reputation and Regulation case study
2. Improving business portfolio management of Conseco Cshi
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Conseco Cshi
Strengths Conseco Senior Health Insurance: A Strategic Problem of Reputation and Regulation | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Conseco Cshi in Conseco Senior Health Insurance: A Strategic Problem of Reputation and Regulation Harvard Business Review case study are -
Successful track record of launching new products
– Conseco Cshi has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Conseco Cshi 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.
Superior customer experience
– The customer experience strategy of Conseco Cshi in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Conseco Cshi
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Conseco Cshi does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Conseco Cshi has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Conseco Cshi to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Conseco Cshi is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy in the Conseco Senior Health Insurance: A Strategic Problem of Reputation and Regulation 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.
Sustainable margins compare to other players in Global Business industry
– Conseco Senior Health Insurance: A Strategic Problem of Reputation and Regulation firm has clearly differentiated products in the market place. This has enabled Conseco Cshi to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Conseco Cshi to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Conseco Cshi 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 Conseco Senior Health Insurance: A Strategic Problem of Reputation and Regulation 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 Conseco Cshi 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.
High switching costs
– The high switching costs that Conseco Cshi 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 Conseco Cshi in the sector have low bargaining power. Conseco Senior Health Insurance: A Strategic Problem of Reputation and Regulation has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Conseco Cshi to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Global Business field
– Conseco Cshi 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 Conseco Cshi in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Conseco Senior Health Insurance: A Strategic Problem of Reputation and Regulation | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Conseco Senior Health Insurance: A Strategic Problem of Reputation and Regulation are -
Aligning sales with marketing
– It come across in the case study Conseco Senior Health Insurance: A Strategic Problem of Reputation and Regulation 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 Conseco Senior Health Insurance: A Strategic Problem of Reputation and Regulation can leverage the sales team experience to cultivate customer relationships as Conseco Cshi is planning to shift buying processes online.
Products dominated business model
– Even though Conseco Cshi has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Conseco Senior Health Insurance: A Strategic Problem of Reputation and Regulation should strive to include more intangible value offerings along with its core products and services.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Conseco Senior Health Insurance: A Strategic Problem of Reputation and Regulation, in the dynamic environment Conseco Cshi has struggled to respond to the nimble upstart competition. Conseco Cshi has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Conseco Cshi 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.
Skills based hiring
– The stress on hiring functional specialists at Conseco Cshi has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Interest costs
– Compare to the competition, Conseco Cshi 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.
Low market penetration in new markets
– Outside its home market of Conseco Cshi, firm in the HBR case study Conseco Senior Health Insurance: A Strategic Problem of Reputation and Regulation needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Conseco Cshi is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Conseco Senior Health Insurance: A Strategic Problem of Reputation and Regulation can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– After analyzing the HBR case study Conseco Senior Health Insurance: A Strategic Problem of Reputation and Regulation, it seems that company is thinking about the frontier risks that can impact Global Business strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Increasing silos among functional specialists
– The organizational structure of Conseco Cshi is dominated by functional specialists. It is not different from other players in the Global Business segment. Conseco Cshi needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Conseco Cshi to focus more on services rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Conseco Senior Health Insurance: A Strategic Problem of Reputation and Regulation, is just above the industry average. Conseco Cshi 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.
Opportunities Conseco Senior Health Insurance: A Strategic Problem of Reputation and Regulation | 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 Conseco Senior Health Insurance: A Strategic Problem of Reputation and Regulation are -
Developing new processes and practices
– Conseco Cshi can develop new processes and procedures in Global Business 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.
Creating value in data economy
– The success of analytics program of Conseco Cshi has opened avenues for new revenue streams for the organization in the industry. This can help Conseco Cshi to build a more holistic ecosystem as suggested in the Conseco Senior Health Insurance: A Strategic Problem of Reputation and Regulation case study. Conseco Cshi can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Conseco Cshi can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Conseco Cshi 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 Conseco Cshi to hire the very best people irrespective of their geographical location.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Conseco Cshi can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Conseco Cshi can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Conseco Cshi is facing challenges because of the dominance of functional experts in the organization. Conseco Senior Health Insurance: A Strategic Problem of Reputation and Regulation 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.
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 Conseco Cshi 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.
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 Conseco Cshi in the consumer business. Now Conseco Cshi can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Conseco Cshi 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Conseco Cshi can use these opportunities to build new business models that can help the communities that Conseco Cshi operates in. Secondly it can use opportunities from government spending in Global Business sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Conseco Cshi in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business 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, Conseco Cshi 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, Conseco Senior Health Insurance: A Strategic Problem of Reputation and Regulation, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Conseco Cshi can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Conseco Senior Health Insurance: A Strategic Problem of Reputation and Regulation External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Conseco Senior Health Insurance: A Strategic Problem of Reputation and Regulation are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Conseco Cshi 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 Conseco Senior Health Insurance: A Strategic Problem of Reputation and Regulation .
Consumer confidence and its impact on Conseco Cshi 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.
Increasing wage structure of Conseco Cshi
– 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 Conseco Cshi.
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. Conseco Cshi 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.
Shortening product life cycle
– it is one of the major threat that Conseco Cshi is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Conseco Cshi 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. Conseco Cshi can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Technology acceleration in Forth Industrial Revolution
– Conseco Cshi has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Conseco Cshi needs to keep up with the evolution of technology in the Global Business 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.
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.
Stagnating economy with rate increase
– Conseco Cshi 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.
High dependence on third party suppliers
– Conseco Cshi 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.
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 Conseco Cshi.
Regulatory challenges
– Conseco Cshi 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 Global Business industry regulations.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Conseco Cshi can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Conseco Senior Health Insurance: A Strategic Problem of Reputation and Regulation 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 Conseco Senior Health Insurance: A Strategic Problem of Reputation and Regulation 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 Conseco Senior Health Insurance: A Strategic Problem of Reputation and Regulation 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 Conseco Senior Health Insurance: A Strategic Problem of Reputation and Regulation 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 Conseco Senior Health Insurance: A Strategic Problem of Reputation and Regulation 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 Conseco Cshi needs to make to build a sustainable competitive advantage.
