Strategic Management Report: Competitive Analysis of AIA Insurance Co.

This report offers a comprehensive strategic analysis of AIA Insurance Company, encompassing micro and macro environmental factors, along with a detailed competitive analysis. Utilizing tools such as SWOT and PESTLE analysis, the report identifies key challenges and opportunities facing AIA in the insurance market. It examines the company's competitive positioning against rivals like Reliance and Sahara Life Insurance, highlighting areas of strength and weakness. The analysis includes a perceptual map to visualize competitive dynamics and emphasizes the importance of adapting to evolving customer expectations and technological advancements. Ultimately, the report aims to provide actionable insights for enhancing AIA's strategic effectiveness and competitive advantage, with a focus on innovative marketing and sales strategies to meet the dynamic needs of the insurance market. This document is available on Desklib, a platform offering a wide range of study tools and solved assignments for students.

Running head: STRATEGIC MANAGEMENT
Strategic Management
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Executive Summary
The report has helped in understanding the micro, macro and competitive analysis of AIA
Insurance Company. The SWOT and PESTLE analysis has helped in understanding the
different kind of issues that has been faced by the company in comparison to the different
competitors in the market. Proper analysis has been done with the help of perceptual map and
competitive analysis that helped in solving the issues effectively.
The main aim and purpose of the report is to conduct the micro and macro analysis with the
competitive analysis of AIA Insurance Company. Proper strategies implementation has been
done effectively to solve the issues and make the insurance company operations effective.

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Table of Contents
Introduction................................................................................................................................3
Background of AIA....................................................................................................................3
Macro Analysis..........................................................................................................................4
Micro Analysis...........................................................................................................................6
Competitive Analysis.................................................................................................................7
SWOT......................................................................................................................................10
Conclusion................................................................................................................................13
References................................................................................................................................15

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Introduction
The report helps in analysis of the macro and micro analysis of AIA life insurance
company. The macro and micro analysis has to be done in an effectual manner wherein it will
help in understanding the different strengths, weaknesses, opportunities and threats. The
competitive analysis is required to be done as this will help in understanding the strategic
groups of AIA insurance company.
The main aim and purpose of the report is to understand the competitive strategy of
AIA insurance company as this will help in analysing the different issues faced by the
company along with the speciality of the services and products provided by them as well.
The structure of the report includes the analysis of the macro and micro analysis of
AIA insurance company along with analysis of the competitive strategy of the respective
company as well. The background of the company has to be analysed in an effectual manner
that will help in understanding the different products and services provided by AIA.
Background of AIA
AIA group limited is known as AIA that is the largest life insurance company that is
public listed in the entire Asia. The company helps in offering different kind of insurance and
financial kind of services for the individuals and business along with health and accident
insurance (Aia.com, 2018). The respective company helps in offering retirement planning
along with services related to wealth management as well. AIA is the company that belongs
to financial services and insurance industry and it serves the pan Asian countries as well. The
company was founded in the year 1919 and the CEO of the company is Ng Keng Hooi
(Group Chief Executive and President).

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Macro Analysis
Proper macro analysis is required to be done wherein the PESTLE analysis is
essential in nature as this helps in providing a proper deal about the different kind of
operating challenges. AIA life insurance company can face different kind of operating
challenges that is prevalent in macro environment other than the different kind of competitive
forces.
Political Factors play an essential role in determining the different factors that can
have huge impact on the AIA life insurance company. The long-term profitability of the
company can get affected in certain market of a country (Barney 2014). AIA insurance
company is operating in the entire life insurance company in different countries and it
exposes itself in different kind of political system risks and environment as well. Proper
diversification of the systematic risks of the entire political environment has to analyse the
different factors before investing into the certain market are as follows:
 Political importance and stability of the sector of life insurance in the economy of the
country (Gamble and Thompson 2014)
 Different kind of tax rates and incentives
 Risk of invasion of the military
 Industrial safety kind of regulations in the entire financial sector
 Work regulations in life insurance along with wage legislation
Economic Factors create a huge impact on the AIA life insurance company wherein
the inflation rate, rate of savings along with rate of interest helps in determining the aggregate
demand along with investment in the entire economy. AIA Life insurance company can use
the different economic factors of the country such as the rate of growth along with spending

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of the consumers has to forecast the growth sector and the company needs to consider the
following factors that includes:
 Level of education in the economy
 Economic rate of growth along with rate of inflation
 Rate of interest and quality of the infrastructure
Social Factors can create huge impact on the entire society wherein the society
culture can impact the culture on the organization in an environment. The different kind of
shared beliefs and attitudes of the entire population play a significant role in AIA insurance
company along with new marketers. The different kind of social factors that has to be
identified by AIA insurance company are as follows:
 Skill level and demographics of the population
 Leisure interests
 Class structure along with hierarchy in the society (Grant 2016)
 Culture that includes gender roles and social conventions
Technological Factors play a significant role on AIA life insurance company wherein
transportation industry is the good example in illustrating the point. The entire Taxi industry
is dominated with different players to cope with the changes wherein there are competitors
like Uber and Lyft. Proper technological advancements are required to be used by the
company wherein this will help them in providing insurance for cars along with other
transport as well. The technological factors include the following:
 Impact of technology on offering of product
 Impact of the entire value chain structure in the financial sector
 Rate of diffusion in technology (Wheelen et al. 2017)
 Impact of structure of cost on life insurance industry

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Environmental factors create huge impact on the AIA life insurance company
wherein different kind of markets have different kind of norms or the environmental
standards wherein it is seen that different countries have different kind of environmental laws
and regulations. The liability issues vary from one country to another and this can cause
different environmental disasters as well. before entering into the market, it is essential in
nature to evaluate the environmental standards to operate in such market as well. The
different kind of environmental factors are as follows:
 Change in weather and climate
 Laws that regulate environmental pollution
 Endangered species
 Recycling and waste management in entire financial sector
Legal Factors create huge impact on the legal framework of AIA insurance company
(Saeidi et al. 2015). The respective company has to evaluate the legal factors before entering
into markets and this can lead to theft of the secret sauce of the organization as well. The
different kind of legal factors that can affect the company are as follows:
 Health and safety law
 Protection of data
 Discrimination law
 E-commerce and consumer protection (Sakas, Vlachos and Nasiopoulos 2014)
Micro Analysis
Proper internal environmental analysis is required to be performed in the AIA
Insurance Company as this helped in understanding the different kind of threats, competition
and rivalry from the other competitor firms in the entire competitive market. In order to gain
and generate the competitive rate, proper competitive analysis is required to be performed by

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the company as this will help them in understanding the issues and solve them effectually as
well.
With the help of the data mining sources, the competitive strategy has been adopted
that helped in analysing the competitive analysis of AIA life insurance company. Proper
mapping has been done that has helped the company in providing the customers with proper
resources at a reasonable rate in comparison to the other competitors in the market that
includes Sahara Life Insurance or Reliance Life Insurance Company.
Furthermore, in order to understand the requirements of the customers, AIA Life
Insurance Company includes different kind of techniques such as perceptual map and other
techniques that helped them in competing with the other competitors in the market.
The templates have been used by AIA Life Insurance Company that helped them in
handling the different policy statement of the clients in the market. With plotting of the
different competitors in the perceptual map, it has helped in understanding their weaknesses
and tried to make their strength in order to gain competitive advantage in the market.
Lastly, the threats and rivalry from new and existing firms has been described that has
helped and it assisted in understanding the issues faced by the respective insurance company
and solved it with the help of different kind of tactics and techniques that helped them in
performing better and gaining customers in the market as well.
Competitive Analysis
The competitive analysis of AIA Insurance Company in comparison to the other
companies in the same sector is required to be done in an effectual and appropriate manner.
there are two rivalries of AIA Insurance Company who are the main competitors in terms of
gaining profitability and revenues along with gaining huge customers in the market. Reliance
Insurance Company provides the customers with the innovative products and services with

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the implementation of the changing market technological advancements (Ethiraj,
Gambardella and Helfat 2016).
Furthermore, it is seen that the Reliance Insurance Company is less competitive in
nature than AIA Life Insurance Company as this respective company utilizes the different
kind of new technological advancements in the services provided by them to the different
customers in an effectual manner as well (Madsen and Walker 2015). The investment plans
used by AIA Life Insurance Company is different and updated in nature and this helps in
meeting the requirements in an appropriate manner.
However, Sahara Life Insurance Company is performing better in comparison to AIA
and Reliance Life Insurance Companies (Ginter 2018). It is seen that there are different kind
of strategies such as innovative strategies and technological advancements helped them in
performing effectively and this helped them in being number one in the entire economy.
Sahara Life Insurance Company includes the different kind of marketing and sales strategies
that has helped them in performing better in the market with the help of analysing the
expectations of the customers (Schilke 2014).
From the competitive analysis of the two main competitors of AIA Insurance
Company, it can be seen that there are different kind of ineffectiveness in the marketing
strategies along with sales strategies of the company that has to be analysed effectually
(Goetsch and Davis 2014). All the competitors of AIA need to overcome the different kind of
challenges in the market as this will help in gaining competitive advantage in the entire
economy and market. Proper diminishing effectiveness of the different kind of traditional
distribution has to be shifted towards the new innovative strategies by the insurance
companies as this will help them in their strategic growth and solve the issues in an
appropriate manner as well (Cusumano, Kahl and Suarez 2015).

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Furthermore, the evolving expectations of the customers has to be ascertained
effectively by the competitors and AIA Insurance Company as this will assist them in
understanding the requirements of customers and they can research with the help of different
and multiple channels as this will help them in becoming most effective in nature. AIA
Insurance Company is one of the most effectual and effective companies in the entire
economy as this is making them the best among the other competitors in the market. They use
the new strategies and the sales and marketing strategies are effective and not outdated in
nature as well.
Lastly, the AIA Insurance Company targets the different kind of customers and try to
satisfy the different needs of them in an appropriate manner as well. The traditional
distribution channel has been improvised in an effectual manner that helps them in standing
out from the competitors as well (Meihami and Meihami, 2014).
Perceptual Map
InnovativeConservative
Local
Worldly
Sahara Life Insurance Company
Reliance Life Insurance Company
AIA Life Insurance Company

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SWOT
Proper SWOT analysis is essential in nature that has to be conducted by AIA
insurance company wherein this will help AIA life insurance company to understand the
strengths, weaknesses, opportunities along with threats that is faced by the company. There
are different other competitors in the market that has to be analysed by the respective
company AIA life insurance company to analyse the risks and strategies to solve the issues as
well. With the implementation of the SWOT analysis, the AIA Life Insurance Company will
be aware about different threats and this will cause huge pressure on the other competitors as
well in the future that will be a competitive advantage for them as well (Bettis et al. 2016).
Strengths
Proper and optimum utilization of the value chain is one of the strengths wherein
AIA life insurance company had set of more than ten subsidiary companies and they handle
the different kind of insurance companies that include corporate system of pension
management tasks, verification of life insurance as well. Therefore, the company is catering
to the different needs of the customers that is insurance related tasks (Donate and de Pablo
2015). This is disintegrating in nature that will help in creating and gaining value by
functioning in an independent manner.
Strong kind of innovation and deep understanding about the customers is the
second strength of the AIA life insurance company wherein it includes the different kind of
continuous support activities that will help them in creating and providing different kind of
whole life insurance policy and annuity products as well (Moutinho and Vargas-Sanchez
2018). Few kinds of innovative strategies have to be adopted by them as this will help them
in solving the issues of the customers effectively as well

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Capable kind of leadership and management team is the other strength wherein they
design different kind of products for the different kind of customers. AIA Insurance
Company needs to improve the financial condition along with solidifying the base of the
customers as well. These kinds of strategies will help in meeting the goals that will help in
executing the strategy in making the management capable in nature.
Weaknesses
Investment in the framework for risk management is one of the weaknesses of AIA
Insurance Company wherein it has been seen that the negative kind of interest rates has led
AIA in investing in different new regions and business sectors. This comply different kind of
risk profile with the novel kind of characteristics and they need to invest heavily as to
construct appropriate risk management framework that can help in mitigating the loss (Hill,
Jones and Schilling 2014).
Investment in the training of the different sales executive wherein the sales
executive of the company has to undergo different kind of transformation and this is
increasing the dependence on the information technology of communication that can cause
digitization of the entire business model.
Improvement of the disclosure mechanism along with system of control wherein the
disclosure mechanism of the entire organization has to be further improved in an effectual
manner that helps the company in gaining better understanding of the information of the
business and this can cause digitization of the business model as well. The consultation skills
of the respective company can affect negatively and this will cause competitive advantage for
the consultation company as well.
Opportunities