Chalter 10: Insurer Strategic Management

Question 1

Strategic Management Process

Answer 1

1. ) Strategy formulation
2. ) Strategy implementation
3. ) Strategy evaluation

Question 2

Strategy Formulation

Answer 2

Steps:

1. ) Analysis of external and internal environments
2. ) Development of long-term strategies and organizational goals
3. ) Determination of strategy at different organizational levels

Question 3

Strategy Evaluation

Answer 3

Four steps in the control process:

1. ) Establish standards
2. ) Create and apply measurements
3. ) Compare actual results to standards
4. ) Evaluate and implement corrective actions if goals are not met

Question 4

The Five Forces Model

Answer 4

• Threat of new entrants
• Threat of substitute products or services
• Bargaining power of buyers
• Bargaining power of suppliers
• Rivalry among existing firms

Question 5

SWOT Analysis

Answer 5

• Strengths
• Weaknesses
• Opportunities
• Threats

Question 6

Strengths and Weaknesses

Answer 6

• Managerial expertise
• Available product lines
• Skill levels and competencies of staff
• Current strategies
• Customer loyalty
• Growth levels
• Organizational structure
• Distribution channels

Question 7

Determining Strategy at Different Organizational Levels

Answer 7

The most prevalent types of organizational strategies:

• Corporate-level strategy (5+ years)
• Business-level strategy (3-5 years)
• Functional-level strategy (1 year)
• Operational-level strategy (daily)

Question 8

Corporate-Level Strategy

Answer 8

Three generic corporate-level strategies for companies in a growth mode:

• Single business
• Vertical integration
• Diversification

Question 9

Business-Level Strategy

Answer 9

Three business-level strategies:

• Cost leadership
• Differentiation
• Foces

Question 10

Insurers’ Global Expansion

Answer 10

• Trends in global expansion
• Strategic reasons for global expansion
• Global market considerations
• Approaches to global expansion

Question 11

Strategic Reasons for Global Expansion

Answer 11

• Revenue growth
• Financial stability
• Building global competitiveness

Question 12

Global Market Considerationd

Answer 12

• Market analysis
• Economic considerations
• Political risks

Question 13

Approaches to Global Expansion

Answer 13

• Strategic alliance
• Joint venture
• Merger
• Wholly owned subsidiary