Case Study Description of Zurich Insurance: Fostering Key People Management Practices
Zurich Insurance was undergoing organizational change after implementing five new people practices focused on: manager development, diversity and inclusion, job model and data analytics, recruitment, and talent pipeline. The case provides background of the company, as well as a description of how its culture was changing and how its allocation of resources was being examined as it tried to improve its position in the marketplace. Students are asked to prioritize which people practices are most important for Zurich as it tries to shift its culture and more effectively leverage its human capital in order to reach its organizational goals.
Swot Analysis of "Zurich Insurance: Fostering Key People Management Practices" written by Boris Groysberg, Katherine Connolly includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Zurich Practices facing as an external strategic factors. Some of the topics covered in Zurich Insurance: Fostering Key People Management Practices case study are - Strategic Management Strategies, Diversity, Leadership, Organizational structure, Succession planning, Talent management and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Zurich Insurance: Fostering Key People Management Practices casestudy better are - – there is backlash against globalization, wage bills are increasing, talent flight as more people leaving formal jobs, increasing commodity prices, challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, increasing household debt because of falling income levels,
central banks are concerned over increasing inflation, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Zurich Insurance: Fostering Key People Management Practices
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Zurich Insurance: Fostering Key People Management Practices case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Zurich Practices, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Zurich Practices 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 Zurich Insurance: Fostering Key People Management Practices can be done for the following purposes –
1. Strategic planning using facts provided in Zurich Insurance: Fostering Key People Management Practices case study
2. Improving business portfolio management of Zurich Practices
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Zurich Practices
Strengths Zurich Insurance: Fostering Key People Management Practices | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Zurich Practices in Zurich Insurance: Fostering Key People Management Practices Harvard Business Review case study are -
Organizational Resilience of Zurich Practices
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Zurich Practices does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Leadership & Managing People industry
– Zurich Insurance: Fostering Key People Management Practices firm has clearly differentiated products in the market place. This has enabled Zurich Practices to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Zurich Practices to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Zurich Practices has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Zurich Practices 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.
Cross disciplinary teams
– Horizontal connected teams at the Zurich Practices 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.
Innovation driven organization
– Zurich Practices is one of the most innovative firm in sector. Manager in Zurich Insurance: Fostering Key People Management Practices Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Zurich Practices digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Zurich Practices 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.
High switching costs
– The high switching costs that Zurich Practices 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.
Ability to recruit top talent
– Zurich Practices is one of the leading recruiters in the industry. Managers in the Zurich Insurance: Fostering Key People Management Practices are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Effective Research and Development (R&D)
– Zurich Practices 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 Zurich Insurance: Fostering Key People Management Practices - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Zurich Practices 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 Zurich Practices is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Zurich Insurance: Fostering Key People Management Practices Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Zurich Practices has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Zurich Practices to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Zurich Practices 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 Zurich Insurance: Fostering Key People Management Practices HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Zurich Insurance: Fostering Key People Management Practices | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Zurich Insurance: Fostering Key People Management Practices are -
Workers concerns about automation
– As automation is fast increasing in the segment, Zurich Practices 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Zurich Insurance: Fostering Key People Management Practices, is just above the industry average. Zurich Practices 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 Zurich Practices supply chain. Even after few cautionary changes mentioned in the HBR case study - Zurich Insurance: Fostering Key People Management Practices, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Zurich Practices vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– It come across in the case study Zurich Insurance: Fostering Key People Management Practices 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 Zurich Insurance: Fostering Key People Management Practices can leverage the sales team experience to cultivate customer relationships as Zurich Practices is planning to shift buying processes online.
Interest costs
– Compare to the competition, Zurich Practices 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Zurich Practices is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Zurich Insurance: Fostering Key People Management Practices can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Boris Groysberg, Katherine Connolly suggests that, Zurich Practices is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Products dominated business model
– Even though Zurich Practices 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 - Zurich Insurance: Fostering Key People Management Practices should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Zurich Practices is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Zurich Practices needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Zurich Practices to focus more on services rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Zurich Insurance: Fostering Key People Management Practices, in the dynamic environment Zurich Practices has struggled to respond to the nimble upstart competition. Zurich Practices has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Zurich Insurance: Fostering Key People Management Practices, it seems that the employees of Zurich Practices 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 Zurich Insurance: Fostering Key People Management Practices | 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 Zurich Insurance: Fostering Key People Management Practices are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Zurich Practices in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Leveraging digital technologies
– Zurich Practices 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Zurich Practices is facing challenges because of the dominance of functional experts in the organization. Zurich Insurance: Fostering Key People Management Practices 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.
Loyalty marketing
– Zurich Practices 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.
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 Zurich Practices in the consumer business. Now Zurich Practices can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Zurich Practices can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Leadership & Managing People segment.
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 Zurich Practices 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Zurich Practices 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Zurich Practices can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Zurich Practices has opened avenues for new revenue streams for the organization in the industry. This can help Zurich Practices to build a more holistic ecosystem as suggested in the Zurich Insurance: Fostering Key People Management Practices case study. Zurich Practices can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Zurich Practices 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 Zurich Practices to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Zurich Practices 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 Zurich Insurance: Fostering Key People Management Practices - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Zurich Practices 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, Zurich Practices can use these opportunities to build new business models that can help the communities that Zurich Practices operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Threats Zurich Insurance: Fostering Key People Management Practices External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Zurich Insurance: Fostering Key People Management Practices are -
Increasing wage structure of Zurich Practices
– 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 Zurich Practices.
Stagnating economy with rate increase
– Zurich Practices 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
– Zurich Practices 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Zurich Practices in the Leadership & Managing People industry. The Leadership & Managing People 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.
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 Zurich Practices in the Leadership & Managing People sector and impact the bottomline of the organization.
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 Zurich Practices.
Environmental challenges
– Zurich Practices 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. Zurich Practices can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Zurich Practices with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Zurich Practices 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 Zurich Insurance: Fostering Key People Management Practices .
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.
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. Zurich Practices needs to understand the core reasons impacting the Leadership & Managing People 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 Zurich Practices business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Zurich Practices 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 Leadership & Managing People industry regulations.
Weighted SWOT Analysis of Zurich Insurance: Fostering Key People Management Practices 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 Zurich Insurance: Fostering Key People Management Practices 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 Zurich Insurance: Fostering Key People Management Practices 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 Zurich Insurance: Fostering Key People Management Practices 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 Zurich Insurance: Fostering Key People Management Practices 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 Zurich Practices needs to make to build a sustainable competitive advantage.