Competitive Environment of Marsh Company

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Marsh: Brief Overview
Insurance broking firm named Marsh was founded 140 years back. Henry W. Marsh and
Donald R. McLennan founded this company. Their aim is to help various businesses to cope
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up with the changing and innovative environment. A major step changed the course of
insurance broking throughout the world1.
Marsh with a large network has its branches spread out in all over world. It is assisting
millions of customers in almost 130 countries all around. It also has a very big labor of
around 35000 employees. They are working hard in order to provide risk management
portfolios to the clients of the company2.
As the network of marsh is very large, that is why it is considered one of the top players of
insurance broking industry. The main objective of the company is to look into the portfolios of
its insurance clients and make a balanced portfolio to manage their risk certainty and provide
them solutions to overcome any drawback or uncertain condition. This allows the company
to have competitive advantage over other companies of their industry.
Marsh is one of the four subsidiaries of Marsh and McLennan Company. It is a very
productive and profitable company, which work at providing risk management, strategic
solutions to its clients. It is working from around 140 years and still a global leader of its
kind3.
In this assignment, the competitive environment of Marsh is going to be discussed. The
ethical consideration and regulatory requirements that one should take into consideration will
be going to discussed and analyzed in terms of Marsh4. Based on that, some
recommendations will be suggested.
1 Marsh, ‘Diversity and Inclusion’ (Marsh, 2019a) https://www.marsh.com/uk/about-marsh/diversity-
and-inclusion-marsh.html accessed on 25th April 2019
2 Marsh, ‘Leadership’ (Marsh, 2019b) https://www.marsh.com/uk/about-marsh/leadership.html
accessed on 25th April 2019
3 Marsh, ‘You are changing. We are too’ (Marsh, 2019f) https://www.marsh.com/us/home.html
accessed on 25th April 2019
4 Marsh, ‘Leading the Way in Transparency’ (Marsh, 2019c)
https://www.marsh.com/uk/about-marsh/leading-the-way-in-transparency.html accessed on 25th April
2019
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Competitive environment of the Marsh Company
Source: Porter’s Five Force Model5
The competitive environment of Marsh Company is going to be analyzed by using porter’s
five-force model. Competitive environment is the environment in which a company works
and get affected by factors present around it competitively. In order to analyze the
competitive environment of any company or in particular of Marsh, the porter’s five-force
model is the best choice.
In porter’s five-force model, it denotes five force of rivalry among competitors, which can
affect company so much. The five forces and their reference with Marsh Company are
discussed in following lines:
Rivalry among existing competitors
An industry is combination of many organizations, which are serving with a same objective.
In an industry, there exists rivalry of competition among them. It is so because they want to
be top player of their market.
Marsh is considered one of the top players of this insurance and insurance broking industry.
They have high profit margins as compared to their competitors and its financial statements
are showing amazing and competitive results.
Bargaining power of suppliers
An industry it effected by its supplier’s bargaining powers also. They have much potential to
influence the prevailing prices of supply of goods or services to the respective company.
In case of Marsh there is no existence of suppliers, however they need suppliers for fixed
assets and for some miscellaneous tasks related to their company. Marsh needs a strong
5 Michael E,Dobbs, ‘Guidelines for applying Porter's five forces framework: a set of industry
analysis templates’ [2014] 24 Competitive Review 32
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base of its supplier, so that some irrelevant things cannot hamper the core functions of the
company.
Bargaining power of buyers
Bargaining power of buyer is related with buyer’s power to bargain the price of the goods or
services and in turn can bring the prices down. This is the power, which is in the hands of
buyers. They can bring prices down with their loyalty to other firms.
Marsh is a company, which has a very strong base of its buyers or clients. The clients of
marsh are from different industries. They are themselves established insurance firms and
get attracted towards marsh from getting affected by its pricing and product qualities.
Threat of new entrants
It refers to threats that can be posed by new competitors on the organizations, which are
already in industry. New entrants are usually towards that industry which is making profit.
Hence existing organizations of that industry faces big threat from new entrants.
In case of Marsh, this insurance broking industry is in today’s world is getting a large amount
of threat from new entrants. It is so because this industry is growing rapidly and attracting
more competition then before.
Threat of substitute products or services
Threat of substitute products or services is one of the biggest threats of markets now a days.
It is so because a product usually becomes obsolete when new product takes its place. this
causes loss to the companies and force them to go for a new and more innovative product.
In this way cycle continues6.
Marsh is a service providing company and it have to deal with every aspect of servicing
process. They need to maintain their service quality efficient and effective in order to reduce
the threat of substitution of more innovative service by other companies.
Competition and New Business Acquisition
In order to acquire a new business in this competitive world, companies have to take some
regulatory requirements and ethical considerations in mind7. With this view, current study is
focused on identifying these requirements and considerations required in acquisition of new
business by Marsh Company or some other company in UK or world. These considerations
are going to be discussed in following paragraphs.
Regulatory Requirements
It is also known as regulatory compliance, which means obeying the rules irrespective of
your conditions and requirements. Respective regulating body assesses regulatory
requirements8. In case when the organization is not following its regulatory requirements
properly, the respective authority can take some serious or minimal corrective actions9.
6Flemming, Poulfelt and Thomas H, Olson, Perspectives and Advice from Leading Experts (2nd
Edition, Routledge, 2017)
7Edward E, Lawler III, Talent: Making People Your Competitive Advantage (John Wiley & Sons, 2010)
8Jr, Niskanen, Bureaucracy and Representative Government (1st Edition Routledge, 2017)
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