Case Study Description of Zurich Insurance: Zurich Oxygen
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 "Zurich Insurance: Fostering Key People Management Practices" (417-035) provides background of the company and an outline of each people practice, as well as a description of how the company's culture was changing and how its allocation of resources was being examined as it tried to improve its position in the marketplace. This case takes a closer look at the implementation of the manager development initiative "Zurich Oxygen."
Swot Analysis of "Zurich Insurance: Zurich Oxygen" written by Boris Groysberg, Katherine Connolly includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Zurich Oxygen facing as an external strategic factors. Some of the topics covered in Zurich Insurance: Zurich Oxygen case study are - Strategic Management Strategies, Leadership, Leadership development, Organizational culture and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Zurich Insurance: Zurich Oxygen casestudy better are - – increasing energy prices, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, increasing commodity prices, wage bills are increasing, increasing government debt because of Covid-19 spendings,
increasing transportation and logistics costs, technology disruption, etc
Introduction to SWOT Analysis of Zurich Insurance: Zurich Oxygen
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Zurich Insurance: Zurich Oxygen case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Zurich Oxygen, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Zurich Oxygen 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: Zurich Oxygen can be done for the following purposes –
1. Strategic planning using facts provided in Zurich Insurance: Zurich Oxygen case study
2. Improving business portfolio management of Zurich Oxygen
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 Oxygen
Strengths Zurich Insurance: Zurich Oxygen | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Zurich Oxygen in Zurich Insurance: Zurich Oxygen Harvard Business Review case study are -
Innovation driven organization
– Zurich Oxygen is one of the most innovative firm in sector. Manager in Zurich Insurance: Zurich Oxygen 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
– Zurich Oxygen has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Zurich Oxygen to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Zurich Oxygen 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: Zurich Oxygen - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High switching costs
– The high switching costs that Zurich Oxygen 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.
Learning organization
- Zurich Oxygen 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 Oxygen is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Zurich Insurance: Zurich Oxygen Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Zurich Oxygen is present in almost all the verticals within the industry. This has provided firm in Zurich Insurance: Zurich Oxygen 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.
Cross disciplinary teams
– Horizontal connected teams at the Zurich Oxygen 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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Zurich Oxygen digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Zurich Oxygen 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.
Sustainable margins compare to other players in Leadership & Managing People industry
– Zurich Insurance: Zurich Oxygen firm has clearly differentiated products in the market place. This has enabled Zurich Oxygen to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Zurich Oxygen to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Zurich Oxygen is one of the leading recruiters in the industry. Managers in the Zurich Insurance: Zurich Oxygen are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of Zurich Oxygen in the sector have low bargaining power. Zurich Insurance: Zurich Oxygen has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Zurich Oxygen to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Zurich Oxygen 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: Zurich Oxygen HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Zurich Insurance: Zurich Oxygen | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Zurich Insurance: Zurich Oxygen are -
Workers concerns about automation
– As automation is fast increasing in the segment, Zurich Oxygen 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Zurich Insurance: Zurich Oxygen, in the dynamic environment Zurich Oxygen has struggled to respond to the nimble upstart competition. Zurich Oxygen has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring
– The stress on hiring functional specialists at Zurich Oxygen 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.
Low market penetration in new markets
– Outside its home market of Zurich Oxygen, firm in the HBR case study Zurich Insurance: Zurich Oxygen needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study Zurich Insurance: Zurich Oxygen 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: Zurich Oxygen can leverage the sales team experience to cultivate customer relationships as Zurich Oxygen is planning to shift buying processes online.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Zurich Insurance: Zurich Oxygen, it seems that the employees of Zurich Oxygen 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.
Capital Spending Reduction
– Even during the low interest decade, Zurich Oxygen has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
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 Oxygen supply chain. Even after few cautionary changes mentioned in the HBR case study - Zurich Insurance: Zurich Oxygen, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Zurich Oxygen vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As Zurich Insurance: Zurich Oxygen HBR case study mentions - Zurich Oxygen 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.
Products dominated business model
– Even though Zurich Oxygen 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: Zurich Oxygen should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Zurich Insurance: Zurich Oxygen, is just above the industry average. Zurich Oxygen 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 Zurich Insurance: Zurich Oxygen | 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: Zurich Oxygen are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Zurich Oxygen 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Zurich Oxygen 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 Oxygen to hire the very best people irrespective of their geographical location.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Zurich Oxygen 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. Zurich Oxygen 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.
Learning at scale
– Online learning technologies has now opened space for Zurich Oxygen 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.
Using analytics as competitive advantage
– Zurich Oxygen 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: Zurich Oxygen - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Zurich Oxygen to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Zurich Oxygen 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.
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 Oxygen 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Zurich Oxygen can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Zurich Oxygen can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Zurich Insurance: Zurich Oxygen 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.
Loyalty marketing
– Zurich Oxygen 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.
Building a culture of innovation
– managers at Zurich Oxygen 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.
Manufacturing automation
– Zurich Oxygen can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People 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.
Creating value in data economy
– The success of analytics program of Zurich Oxygen has opened avenues for new revenue streams for the organization in the industry. This can help Zurich Oxygen to build a more holistic ecosystem as suggested in the Zurich Insurance: Zurich Oxygen case study. Zurich Oxygen can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Zurich Insurance: Zurich Oxygen 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: Zurich Oxygen are -
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Zurich Insurance: Zurich Oxygen, Zurich Oxygen may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Zurich Oxygen can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Zurich Oxygen 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 Zurich Oxygen.
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 Oxygen needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Zurich Oxygen with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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. Zurich Oxygen 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.
Environmental challenges
– Zurich Oxygen 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 Oxygen can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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 Oxygen business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Zurich Oxygen 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 Oxygen in the Leadership & Managing People sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Zurich Insurance: Zurich Oxygen 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: Zurich Oxygen 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: Zurich Oxygen 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: Zurich Oxygen 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: Zurich Oxygen 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 Oxygen needs to make to build a sustainable competitive advantage.
