Cigna (CI) SWOT Analysis / TOWS Matrix / MBA Resources
Insurance (Accident & Health)
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Cigna (United States)
Based on various researches at Oak Spring University , Cigna is operating in a macro-environment that has been destablized by – increasing energy prices, supply chains are disrupted by pandemic , technology disruption, talent flight as more people leaving formal jobs, there is backlash against globalization, increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Cigna can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cigna, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cigna 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 Cigna can be done for the following purposes –
1. Strategic planning of Cigna
2. Improving business portfolio management of Cigna
3. Assessing feasibility of the new initiative in United States
4. Making a Insurance (Accident & Health) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Cigna
Strengths of Cigna | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cigna are -
Effective Research and Development (R&D)
– Cigna has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Cigna staying ahead in the Insurance (Accident & Health) industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Insurance (Accident & Health)
– Cigna is one of the leading players in the Insurance (Accident & Health) industry in United States. Over the years it has not only transformed the business landscape in the Insurance (Accident & Health) industry in United States but also across the existing markets. The ability to lead change has enabled Cigna in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Cigna in Insurance (Accident & Health) industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Cigna 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 Cigna is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Cigna emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Cigna is one of the leading players in the Insurance (Accident & Health) industry in United States. It is in a position to attract the best talent available in United States. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Cigna 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.
Operational resilience
– The operational resilience strategy of Cigna comprises – understanding the underlying the factors in the Insurance (Accident & Health) 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.
Organizational Resilience of Cigna
– The covid-19 pandemic has put organizational resilience at the centre of everthing Cigna does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Cigna has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Cigna to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Cigna is one of the most innovative firm in Insurance (Accident & Health) sector.
High switching costs
– The high switching costs that Cigna 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.
Strong track record of project management in the Insurance (Accident & Health) industry
– Cigna is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses of Cigna | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Cigna are -
Products dominated business model
– Even though Cigna has some of the most successful models in the Insurance (Accident & Health) industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Cigna should strive to include more intangible value offerings along with its core products and services.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Cigna is slow explore the new channels of communication. These new channels of communication can help Cigna to provide better information regarding Insurance (Accident & Health) products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Cigna 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.
Skills based hiring in Insurance (Accident & Health) industry
– The stress on hiring functional specialists at Cigna 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.
Slow to strategic competitive environment developments
– As Cigna is one of the leading players in the Insurance (Accident & Health) industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Insurance (Accident & Health) industry in last five years.
Lack of clear differentiation of Cigna products
– To increase the profitability and margins on the products, Cigna needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of United States, Cigna needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners in Insurance (Accident & Health) industry
– because of the regulatory requirements in United States, Cigna 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 Insurance (Accident & Health) industry.
Capital Spending Reduction
– Even during the low interest decade, Cigna 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 Insurance (Accident & Health) industry using digital technology.
High dependence on Cigna ‘s star products
– The top 2 products and services of Cigna still accounts for major business revenue. This dependence on star products in Insurance (Accident & Health) industry has resulted into insufficient focus on developing new products, even though Cigna has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Cigna is dominated by functional specialists. It is not different from other players in the Insurance (Accident & Health) industry, but Cigna needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Cigna to focus more on services in the Insurance (Accident & Health) industry rather than just following the product oriented approach.
Cigna Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Cigna are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Cigna 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 Cigna to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Insurance (Accident & Health) industry, but it has also influenced the consumer preferences. Cigna can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Cigna 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 Insurance (Accident & Health) industry.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Cigna is facing challenges because of the dominance of functional experts in the organization. Cigna can utilize new technology in the field of Insurance (Accident & Health) industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Cigna in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Insurance (Accident & Health) industry, and it will provide faster access to the consumers.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Cigna can use these opportunities to build new business models that can help the communities that Cigna operates in. Secondly it can use opportunities from government spending in Insurance (Accident & Health) sector.
Manufacturing automation
– Cigna can use the latest technology developments to improve its manufacturing and designing process in Insurance (Accident & Health) sector. 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.
Using analytics as competitive advantage
– Cigna has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Insurance (Accident & Health) sector. This continuous investment in analytics has enabled Cigna to build a competitive advantage using analytics. The analytics driven competitive advantage can help Cigna to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Cigna can improve the customer journey of consumers in the Insurance (Accident & Health) industry by using analytics and artificial intelligence. It 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
– Cigna 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Cigna can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Learning at scale
– Online learning technologies has now opened space for Cigna 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Cigna 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.
Threats Cigna External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Cigna are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Cigna in Insurance (Accident & Health) industry. The Insurance (Accident & Health) 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.
Consumer confidence and its impact on Cigna 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 Insurance (Accident & Health) industry and other sectors.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Insurance (Accident & Health) industry are lowering. It can presents Cigna with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Insurance (Accident & Health) sector.
High dependence on third party suppliers
– Cigna 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.
Stagnating economy with rate increase
– Cigna 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 Insurance (Accident & Health) industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Cigna 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 Cigna prominent markets.
Regulatory challenges
– Cigna 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 Insurance (Accident & Health) industry regulations.
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. Cigna 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
– Cigna 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. Cigna can take advantage of this fund but it will also bring new competitors in the Insurance (Accident & Health) industry.
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. Cigna needs to understand the core reasons impacting the Insurance (Accident & Health) industry. This will help it in building a better workplace.
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 Insurance (Accident & Health) industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Cigna can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Cigna has witnessed rapid integration of technology during Covid-19 in the Insurance (Accident & Health) industry. As one of the leading players in the industry, Cigna needs to keep up with the evolution of technology in the Insurance (Accident & Health) 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.
Weighted SWOT Analysis of Cigna Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Cigna 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 Cigna 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 Cigna 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 Cigna 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 Cigna needs to make to build a sustainable competitive advantage.