Reinsurance Negotiation: Confidential Information for Auburn Re SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
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Case Study SWOT Analysis Solution
Case Study Description of Reinsurance Negotiation: Confidential Information for Auburn Re
The Reinsurance Negotiation case is a fictional three-party negotiation between a primary insurer and two reinsurers. The case is appropriate for use in a wide variety of courses, including Financial Institutions, Negotiations, and courses related to the Insurance and Reinsurance industry. This Teaching Note emphasizes the key learning points that are most relevant to a course on financial institutions, while also examining several key elements of negotiation strategy.
Swot Analysis of "Reinsurance Negotiation: Confidential Information for Auburn Re" written by Robert C. Pozen, Henoch Senbetta includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Reinsurance Negotiation facing as an external strategic factors. Some of the topics covered in Reinsurance Negotiation: Confidential Information for Auburn Re case study are - Strategic Management Strategies, Negotiations, Risk management and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Reinsurance Negotiation: Confidential Information for Auburn Re casestudy better are - – increasing commodity prices, talent flight as more people leaving formal jobs, geopolitical disruptions, increasing household debt because of falling income levels, supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies,
wage bills are increasing, technology disruption, etc
Introduction to SWOT Analysis of Reinsurance Negotiation: Confidential Information for Auburn Re
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Reinsurance Negotiation: Confidential Information for Auburn Re case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Reinsurance Negotiation, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Reinsurance Negotiation 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 Reinsurance Negotiation: Confidential Information for Auburn Re can be done for the following purposes –
1. Strategic planning using facts provided in Reinsurance Negotiation: Confidential Information for Auburn Re case study
2. Improving business portfolio management of Reinsurance Negotiation
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Reinsurance Negotiation
Strengths Reinsurance Negotiation: Confidential Information for Auburn Re | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Reinsurance Negotiation in Reinsurance Negotiation: Confidential Information for Auburn Re Harvard Business Review case study are -
Innovation driven organization
– Reinsurance Negotiation is one of the most innovative firm in sector. Manager in Reinsurance Negotiation: Confidential Information for Auburn Re Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– Reinsurance Negotiation has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Reinsurance Negotiation to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Finance & Accounting field
– Reinsurance Negotiation 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 Reinsurance Negotiation in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Reinsurance Negotiation has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Reinsurance Negotiation: Confidential Information for Auburn Re 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.
Superior customer experience
– The customer experience strategy of Reinsurance Negotiation in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Reinsurance Negotiation digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Reinsurance Negotiation 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.
Ability to recruit top talent
– Reinsurance Negotiation is one of the leading recruiters in the industry. Managers in the Reinsurance Negotiation: Confidential Information for Auburn Re are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Diverse revenue streams
– Reinsurance Negotiation is present in almost all the verticals within the industry. This has provided firm in Reinsurance Negotiation: Confidential Information for Auburn Re 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.
High switching costs
– The high switching costs that Reinsurance Negotiation 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.
Analytics focus
– Reinsurance Negotiation 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 Robert C. Pozen, Henoch Senbetta 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.
Cross disciplinary teams
– Horizontal connected teams at the Reinsurance Negotiation 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.
Successful track record of launching new products
– Reinsurance Negotiation has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Reinsurance Negotiation 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.
Weaknesses Reinsurance Negotiation: Confidential Information for Auburn Re | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Reinsurance Negotiation: Confidential Information for Auburn Re are -
Interest costs
– Compare to the competition, Reinsurance Negotiation 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.
Need for greater diversity
– Reinsurance Negotiation 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.
Slow to strategic competitive environment developments
– As Reinsurance Negotiation: Confidential Information for Auburn Re HBR case study mentions - Reinsurance Negotiation 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.
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 Reinsurance Negotiation supply chain. Even after few cautionary changes mentioned in the HBR case study - Reinsurance Negotiation: Confidential Information for Auburn Re, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Reinsurance Negotiation vulnerable to further global disruptions in South East Asia.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Reinsurance Negotiation: Confidential Information for Auburn Re, it seems that the employees of Reinsurance Negotiation 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.
Increasing silos among functional specialists
– The organizational structure of Reinsurance Negotiation is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Reinsurance Negotiation needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Reinsurance Negotiation to focus more on services rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of Reinsurance Negotiation, firm in the HBR case study Reinsurance Negotiation: Confidential Information for Auburn Re needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Reinsurance Negotiation 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 - Reinsurance Negotiation: Confidential Information for Auburn Re should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– It come across in the case study Reinsurance Negotiation: Confidential Information for Auburn Re 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 Reinsurance Negotiation: Confidential Information for Auburn Re can leverage the sales team experience to cultivate customer relationships as Reinsurance Negotiation 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 Reinsurance Negotiation: Confidential Information for Auburn Re, in the dynamic environment Reinsurance Negotiation has struggled to respond to the nimble upstart competition. Reinsurance Negotiation has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Reinsurance Negotiation is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Reinsurance Negotiation: Confidential Information for Auburn Re can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Reinsurance Negotiation: Confidential Information for Auburn Re | 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 Reinsurance Negotiation: Confidential Information for Auburn Re are -
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Reinsurance Negotiation 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. Reinsurance Negotiation 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.
Better consumer reach
– The expansion of the 5G network will help Reinsurance Negotiation to increase its market reach. Reinsurance Negotiation 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.
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 Reinsurance Negotiation 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.
Creating value in data economy
– The success of analytics program of Reinsurance Negotiation has opened avenues for new revenue streams for the organization in the industry. This can help Reinsurance Negotiation to build a more holistic ecosystem as suggested in the Reinsurance Negotiation: Confidential Information for Auburn Re case study. Reinsurance Negotiation 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, Reinsurance Negotiation is facing challenges because of the dominance of functional experts in the organization. Reinsurance Negotiation: Confidential Information for Auburn Re 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Reinsurance Negotiation 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, Reinsurance Negotiation: Confidential Information for Auburn Re, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Reinsurance Negotiation 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 Reinsurance Negotiation to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Reinsurance Negotiation can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Reinsurance Negotiation: Confidential Information for Auburn Re 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.
Manufacturing automation
– Reinsurance Negotiation can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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.
Leveraging digital technologies
– Reinsurance Negotiation 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. Reinsurance Negotiation can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Reinsurance Negotiation can use these opportunities to build new business models that can help the communities that Reinsurance Negotiation operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Developing new processes and practices
– Reinsurance Negotiation can develop new processes and procedures in Finance & Accounting 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.
Threats Reinsurance Negotiation: Confidential Information for Auburn Re External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Reinsurance Negotiation: Confidential Information for Auburn Re are -
Increasing wage structure of Reinsurance Negotiation
– 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 Reinsurance Negotiation.
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. Reinsurance Negotiation needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Reinsurance Negotiation 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Reinsurance Negotiation with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Reinsurance Negotiation 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Reinsurance Negotiation: Confidential Information for Auburn Re, Reinsurance Negotiation may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
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 Reinsurance Negotiation in the Finance & Accounting sector and impact the bottomline of the organization.
Consumer confidence and its impact on Reinsurance Negotiation 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.
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 Reinsurance Negotiation.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Reinsurance Negotiation 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 Reinsurance Negotiation: Confidential Information for Auburn Re .
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 Reinsurance Negotiation business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Reinsurance Negotiation 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.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Reinsurance Negotiation 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 Reinsurance Negotiation: Confidential Information for Auburn Re 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 Reinsurance Negotiation: Confidential Information for Auburn Re 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 Reinsurance Negotiation: Confidential Information for Auburn Re 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 Reinsurance Negotiation: Confidential Information for Auburn Re 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 Reinsurance Negotiation: Confidential Information for Auburn Re 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 Reinsurance Negotiation needs to make to build a sustainable competitive advantage.
