Reinsurance Negotiation: Confidential Information for JLT Insurance Company SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Reinsurance Negotiation: Confidential Information for JLT Insurance Company
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 JLT Insurance Company" 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 JLT Insurance Company case study are - Strategic Management Strategies, Risk management and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Reinsurance Negotiation: Confidential Information for JLT Insurance Company casestudy better are - – geopolitical disruptions, challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, technology disruption, talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models,
supply chains are disrupted by pandemic , increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Reinsurance Negotiation: Confidential Information for JLT Insurance Company
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 JLT Insurance Company 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 JLT Insurance Company can be done for the following purposes –
1. Strategic planning using facts provided in Reinsurance Negotiation: Confidential Information for JLT Insurance Company 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 JLT Insurance Company | 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 JLT Insurance Company Harvard Business Review case study are -
Sustainable margins compare to other players in Finance & Accounting industry
– Reinsurance Negotiation: Confidential Information for JLT Insurance Company firm has clearly differentiated products in the market place. This has enabled Reinsurance Negotiation to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Reinsurance Negotiation to invest into research and development (R&D) and innovation.
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.
Highly skilled collaborators
– Reinsurance Negotiation 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 Reinsurance Negotiation: Confidential Information for JLT Insurance Company HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
Operational resilience
– The operational resilience strategy in the Reinsurance Negotiation: Confidential Information for JLT Insurance Company 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.
Learning organization
- Reinsurance Negotiation 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 Reinsurance Negotiation is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Reinsurance Negotiation: Confidential Information for JLT Insurance Company Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Reinsurance Negotiation in the sector have low bargaining power. Reinsurance Negotiation: Confidential Information for JLT Insurance Company has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Reinsurance Negotiation to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Reinsurance Negotiation is one of the most innovative firm in sector. Manager in Reinsurance Negotiation: Confidential Information for JLT Insurance Company Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
Strong track record of project management
– Reinsurance Negotiation is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Reinsurance Negotiation
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Reinsurance Negotiation does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
Weaknesses Reinsurance Negotiation: Confidential Information for JLT Insurance Company | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Reinsurance Negotiation: Confidential Information for JLT Insurance Company are -
No frontier risks strategy
– After analyzing the HBR case study Reinsurance Negotiation: Confidential Information for JLT Insurance Company, it seems that company is thinking about the frontier risks that can impact Finance & Accounting 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Reinsurance Negotiation 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.
Skills based hiring
– The stress on hiring functional specialists at Reinsurance Negotiation 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Reinsurance Negotiation: Confidential Information for JLT Insurance Company, 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Reinsurance Negotiation: Confidential Information for JLT Insurance Company 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 Reinsurance Negotiation has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Reinsurance Negotiation: Confidential Information for JLT Insurance Company 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 operating costs
– Compare to the competitors, firm in the HBR case study Reinsurance Negotiation: Confidential Information for JLT Insurance Company has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Reinsurance Negotiation 's lucrative customers.
High cash cycle compare to competitors
Reinsurance Negotiation 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.
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.
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Reinsurance Negotiation: Confidential Information for JLT Insurance Company, 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.
Opportunities Reinsurance Negotiation: Confidential Information for JLT Insurance Company | 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 JLT Insurance Company are -
Loyalty marketing
– Reinsurance Negotiation 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, 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Reinsurance Negotiation can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
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.
Using analytics as competitive advantage
– Reinsurance Negotiation 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 Reinsurance Negotiation: Confidential Information for JLT Insurance Company - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Reinsurance Negotiation to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Reinsurance Negotiation 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.
Learning at scale
– Online learning technologies has now opened space for Reinsurance Negotiation 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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Reinsurance Negotiation in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
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 JLT Insurance Company case study. Reinsurance Negotiation can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Reinsurance Negotiation in the consumer business. Now Reinsurance Negotiation can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Reinsurance Negotiation: Confidential Information for JLT Insurance Company 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 JLT Insurance Company are -
Regulatory challenges
– Reinsurance Negotiation 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 Finance & Accounting industry regulations.
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.
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.
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.
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.
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.
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.
Technology acceleration in Forth Industrial Revolution
– Reinsurance Negotiation has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Reinsurance Negotiation needs to keep up with the evolution of technology in the Finance & Accounting 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.
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.
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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Reinsurance Negotiation in the Finance & Accounting industry. The Finance & Accounting 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.
Environmental challenges
– Reinsurance Negotiation 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. Reinsurance Negotiation can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Weighted SWOT Analysis of Reinsurance Negotiation: Confidential Information for JLT Insurance Company 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 JLT Insurance Company 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 JLT Insurance Company 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 JLT Insurance Company 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 JLT Insurance Company 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.
