Business Environment Analysis for Close Brother Insurance

This report analyzes the internal environment of Close Brother Insurance using the Value Chain Model and discusses the impact of competition on its key internal activities. It also reflects on the academic module of the Value Chain Model and Kolb's reflective theory. The report concludes that the business environment affects all types of organizations and that companies need to take action to compete with competition and survive in the market efficiently.

Business Environment
Analysis

Table of Contents
INTRODUCTION ............................................................................................................................3
Close brother insurance.................................................................................................................3
Internal environment on the basis of Value Chain Model.............................................................4
Effect on key internal due to the change in competition level......................................................6
Reflection on academic module....................................................................................................7
CONCLUSION .................................................................................................................................8
REFERENCES...................................................................................................................................9

INTRODUCTION
The business environment means all the external and internal factors or sum total of all the
individual that influence on business. These factors are in term of technology, competitors, social
economics, customers and etc. all these factors affect the operational activities of a business
organisation (Becu and et. al., 2017). The company chosen in this report is close brother
insurance which is founded by William Brooks Close in 1924 and lit is located in London, EC2
UK. It provide the service of Merchant banking securities and wealth management. The main aim
of this essay is examine the internal environment, effect on key internal environment and
reflection on academic model.
Close brother insurance
The respective company that is Close brother insurance is a UK based comp-any which
deal in merchant banking, provide lending, security trading, deposit taking and wealth
management. It is listed on London Stock Exchange that is constitute of FTSE 250 Index. This
organisation provide the financial support and advice the individual and small business in United
Kingdom through a range of the financial services. The William Brooks Close and his brothers
James and Fred founded this company by offering the farm mortgages in Sioux City, Lowa. In
1980 and 1990, it began to expand their business as it acquired many specialist business
organisation such as Winter Securities, Rea Brothers and Hill Sanuel's Corporate Finance
Division. In 2008, the Close brother had acquires UK's short term and the bridging lender
Commercial Acceptances Group for about £ 31m.
Income generating activity by the Close brother insurance in UK.
This insurance company engaged in the activity of assets financing, specialist financing,
treasury and deposit taking (Corbin, 2018). It makes loans, trade securities and also provide
advice and investment management solutions to its clients. It is well known insurance broker
company that provide its customers an insurance quote for new vehicle and earn income in various
ways as discussed below:
 It earn around 86% of its income from the core understanding activities like premiums
earned from selling the motor insurance policies. It is the primary sources of the respective

company's income. In this, in return the car vehicle insurers agree to pay them out of valid
claims.
 Other 14% of its income is generate from the non core activities such as premium finance,
selling add-ons, fees and charges, investment and money earned through claims. It has
investment portfolio which composed of a mix of the assets such as bonds stock and other
type of investments. The company also earn their income through the profit share
arrangement with the intermediaries (Wang, 2021)
 When the insurers lose money on claims the they also make the money on claims. The
Close brother insurance, earn their income from rebates, referral fees and profit shares. A
little bit of their revenue is generated form the other sources like fee or charges as many
insurers charge fee for a policyholder require a change in their policy or want to cancel the
policy early. In this situation the company charge amount from the clients.
Internal environment on the basis of Value Chain Model.
The value chain framework is very helpful for the organisation as it help them in
identifying and group their business functions into the primary and supportive activities. This
model define full range of the required activities in order to provide a service or create a product
(Fung and Watts, 2019). The main aim of value chain analysis is to enhance the production
efficiency in order to deliver a maximum value for least possible cost. This model contain two
categories one is primary activities and other is secondary activities. In context of Close brother
insurance, the value chain model is discussed below:
Primary activities- It contribute in the physical creation of product and services, maintenance,
sales and support.
 Inbound operations- Internal management and handling of resources comes from outside
sources. The resources that flow in this are known as inputs which may involve raw
material. The Close brother insurance, receive their clients data and other information
during providing them insurance and other financial services. They have record of each of
their clients.
 Operations- In this activity the process of transforming a product from input to the output
is take place and sold by the business to customers ( Govoeyi, and et. al., 2019).

 Outbound logistics- This process involve the storage system, collection and distribution
of outputs to its customers. The company mange external and internal system from the
customer organisation.
 marketing and sales- There is advertising and the brand building in order to increasing
visibility, reach a marketing customers and communicate that why the customer need to
purchase company's product. The Close brother insurance promote their services by using
the social media platform and give advertisement on news paper or magazine etc.
 Services- In this, there is activities such as product support and customer services, that
reinforce the long term relationship with customers who bought a product and services.
Close brother insurance provide a good customer service of their clients so that it can build
a long term commercial relationships with them.
Support activities- These help to make more efficient the primary activities (Lee, 2019).
 Procurement- It find new external vendors and negotiating price activities in order to
bring essential resources and material used to build services and product. it focus more on
purchasing part of inbound logistic rather than the other sub activities. The Close brother
insurance, attract their clients by offering reasonable interest rate and some beneficial
schemes.
 Human resources management- It is concern about the human capital management
including hiring, training and maintaining the organisational culture by positive employees
relationship. The Close brother insurance, hire talented or well educated employees who
can deal in numbers and have good knowledge about insurance sectors. Its employees have
good accounting skills.
 Technological development- It include the activities such as IT management, research
and development and the cybersecurity which build and maintain the use of organisational
technology. The Close brother insurance, invest in major strategies and they introduced an
electronic signature in order to create a seamless digital journey for personal and the
commercial customers.
 Company infrastructure- In this, the essential organisational activities such as
administrative, accounting, legal, finance, general management and quality assurance
(Lee, 2019)..Close brother insurance, has a management team such as accounting,
financing, planning and quality control.

Effect on key internal due to the change in competition level
Like the other industries, the insurance industry is also get impacted by the competition.
The insurance organisation not only compete with other industry but also compete with nation's
government, self insurance and retention groups. Often, the government provide insurance for the
risk that private insurance are unwilling to cover and can not cover such as earth quack, hurricanes
and floods (QC, and Bourtzalas, 2021). In context of Close brother insurance, it has many
competitors such as Lazards, Rathbone Brothers, Ever core Group and many more. Along with
this it also face the competition form government and the change in competition level affect its
internal activities.
 Interest rate- When the competition level is very high and the competitors of Close
brother insurance, change their interest rate then due to this, the respective company has
also change their interest rate on their financial services. In result, it lead a low profit
margin for the company. Major portion of the respective company's revenue is used to
adjust losses and other expenses. A major difference in the price among several insurance
organisation is in their ability of prediction the future losses and ability of charging an
appropriate premium to each and every underwriting class that also should be accurate and
well defined.
 Change in strategies- Due to the competition, the Close brother insurance has to change
their business strategies in order to compete with competition. In this situation, they need
to make plan or stratifies according to the changing environment. To avoid the risk of
competition the company has to modify their business strategies according to the
requirement and they bring some changes in their rules. The policies of this company is
also get affected by the competition level as they have to formulate new polices and
regulation to as per new changing environment. The company need to offer some
beneficial scheme or plan in order to attract a large number of customer and for survive in
the competitive insurance market.
 Change in quality- The insurance company come pet on quality of provided services that
include border coverage and a prompt servicing of the claims ( Retrosi, Morris, and
McGavock, 2019). In relation to Close brother insurance, the insurance applicants judge
the respective company on the basis of its agent and brokers who provide essential

information to select best insurance coverage. These agents and brokers analyse the
insurance need of an applicants and then suggest coverage required for satisfying their
needs. The agent and broker often helped process loss claims for the applicants, therefore
competency in processing alums also be used by insured in order to judge the quality of
respective company.
Reflection on academic module
In the reflection model, the Kolbs learning style is very effective as it help me to
understand the value chain model (Uppal, 2020). It make unable us to understand that how the
value chain model is work. There is the process of Kolb's reflective model contain four types
which are given below:
 Concrete experience- It is begin with the concrete experience and the individual should
actively engage in this task. I study about value chain model and understand different
activity of this model which are very essential for the company to perform well. I get
much knowledge about marketing, technology and different function of this model and
also understand that how it work.
 Reflective observation- In this, the learner steps back in order to reflect the task and
allow the an individual to ask question or discussion about their experience. My experience
about this study is very goods but I observe that there are some difficulty in applying the
value chain model on the respective company effectively.
 Abstract conceptualization- At this stage, a learners attempts to draw the conclusion of
his experience by reflecting on their knowledge. For the value chain model I conclude that
its some function can be modifies in order to understand the concept of activity effectively.
My critical skills helps me to understand this model an d make me enable to apply it.
 Active experimentation- In this, the learner is confident about the concept which is being
taught and apply their knowledge to future concept. I implement the value chain model on
the Close brother insurance, effectively and able to test this model so that I can improve
my learning experience. It not only provide me with the platform to apply the internalized
business concept, but also offer the opportunities for demonstrate my awareness about this
model.

CONCLUSION
From this report it is concluded that the business environment is affect all type of
organisation in term of internal and external factors. The insurance companies also get impacted
by the business environment. The value chain model is very useful for the organisation as it help
to understand different function or activities that an organisation undertake in their business. To
understand the value chain model, the Kolb's reflective theory is very helpful as it make us
understand able that how the model work in organisation. The business faces a tough competition
in the market. Due to the changing level of competition a company has to face many challenges as
it affect the organisational internal activities. So the company need to take some action or plan
strategies to compete with competition and survive in market efficiently.

REFERENCES
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