Analyze the Company's Business Strategy According to the Strategy Map

b- Distribution Channel:

Products are provided to customers through three main distribution channels: brokers, agents and direct.

- Brokerage: The company has good relationships with all foreign insurance brokerage companies present in Vietnam such as Gras Savoye, Aon, Marsh as well as foreign brokers in countries in the region such as Acclaim (Singapore), Siam Surety (Thailand), BIB (Malayisa) ... Customers from this distribution channel are mostly large services, of foreign customers with well-managed risks.

- Agents: The company's agent network is a system of more than 100 branches of the Vietnam Joint Stock Commercial Bank for Industry and Trade nationwide. The company can provide insurance services to customers in its target market nationwide.

Maybe you are interested!

- Direct distribution channel: are customers obtained by the company directly contacting and providing services to customers, with the main target being small and medium-sized foreign-invested companies.

c- Target market:

Besides the enterprises with investment capital from countries in the ASEAN region, another group is Vietnamese enterprises that have credit relationships with the Industrial and Commercial Bank. With the understanding of their customers, the network of agents is the bank branches themselves that can grasp the fastest and best serve the needs of customers.

d- Brand building: Asia Insurance Company - Industrial and Commercial Bank is a perfect combination of two famous brands: Asia Insurance Company - a leading brand in the regional insurance market and Industrial and Commercial Bank - one of the four leading banks in Vietnam.

4.3.2. Analyze the company's business strategy according to the strategy map

1- Financial scope: The company's financial situation is quite healthy and clean. With the characteristics of the insurance business, over 80% of the company's investments are short-term investments. Therefore, it always ensures a healthy financial situation, meeting the need for cash when there is a large loss.

2- Customer range

a- Services: As analyzed in the delta model, the Company determines that the insurance services provided are high quality products with a service style from

Singapore. The quality of products and services is also reflected in the compensation settlement for customers when an insurance incident occurs. Compensation settlement is quick and reasonable.

b- Insurance capacity: Although the capital is lower than companies that have been present in the market for a long time, thanks to good relationships with major reinsurers in the world such as Munich Re, Toa Re, .. and companies in the Asian insurance group, the company's ability to receive insurance is quite high.

For good risks such as hotels, buildings… the company can automatically take on risks up to 18 million USD. For larger risks, the company can still arrange with temporary re-contracts.

3- Process scope a- Management work

Decision making: As a joint venture company, major decisions of the company related to policies and strategies must be made at the board of directors meeting.

b- Organizational structure :

- Marketing staff are responsible for both brokerage and direct agents and customers.

- Head of Operations in charge of marketing, insurance approval and compensation.

4- Scope of learning and development

The majority of the professional staff are aged 24-35, dynamic, and have been trained with university and postgraduate degrees. However, insurance knowledge has not been trained in depth at Vietnamese universities, so employees need a period of time to receive professional training when joining the company. Each professional staff member, after being trained at the company, will attend short-term training courses in countries in the region such as Singapore, Indonesia and have the opportunity to learn and work directly at insurance companies belonging to the Asian Insurance Group in countries in the region. Then, they will participate in the distance training program for insurance profession of the British Insurance Institute, the New Zealand Insurance Institute and Australia. These are courses to improve the ability to assess risks and exploit insurance.

of professional staff. In addition, every year the company also organizes courses, invites experts to improve the knowledge and marketing ability of employees in the marketing department.

4.3.3. Analyze the company's strategy according to Michael E. Porter's competitive strategy.

1- Supplier

The suppliers of non-life insurance companies are mainly professional reinsurers, providing the ability to take risks and share risks with insurance companies. In addition, non-life insurance companies specializing in primary insurance business all have reinsurance business departments, so on the one hand they are competitors, on the other hand these competitors are also each other's suppliers for major risks.

In relation to professional reinsurers, insurance companies are always in a lower position, because reinsurers themselves are the ones with the advantage and initiative in assessing risks and insurance terms and conditions. Once the loss situation is high, reinsurers tighten the terms and conditions, and insurance companies must comply and apply them to their customers.

2- Customer

IAI's customers are those who have borrowed capital from the Industrial and Commercial Bank, and are loyal customers of the Industrial and Commercial Bank. Therefore, the possibility of changing insurance service providers for this group of customers is not high.

3- Competitors

* Industry development situation:

Appendix 10: Total non-life insurance premiums 2006-2009

The Vietnamese insurance market is increasingly vibrant and bustling with a fairly high growth rate, increasing by 20% in 2008 and 14.3% in 2009, the growth rate of the non-life insurance market increased by an average of over 20% per year. Currently, the Vietnamese non-life insurance market has the participation of 16 companies, including 3 100% foreign-invested enterprises, 5 joint venture companies and 8 domestic companies.

water, along with 5 brokerage companies, including 3 foreign brokerage companies which are multinational corporations in the world: Marsh, AON, Gras Savoye Willis; 1 large American insurance corporation, AIG, has also been granted a business license ( Appendix 3: List of non-life insurance companies in the market )

* Competitors:

Compared to other foreign-invested enterprises, IAI has a broader target market. In addition to enterprises with investment capital from countries in the ASEAN region, another target is Vietnamese enterprises that have credit relationships with the Industrial and Commercial Bank. Considering this target market, IAI's main competitors are domestic insurance companies, the strongest of which are Bao Minh and Bao Viet.

Appendix 4: Market share of non-life insurance companies in 2008 - 2009 Appendix 11: Competitive image matrix of IAI company

Appendix 16: Interview questionnaire for industry experts

4- Potential competitors

Besides competitors such as insurance companies, brokerage companies are also competitors of insurance companies when approaching customers. But on the other hand, brokers are also customers, considered as distribution channels of the business. Customers of brokerage companies can also become customers of the company. Moreover, according to the practice of the non-life insurance market, when customers have worked with brokerage companies, insurance companies do not compete directly with brokerage companies to win back customers but turn to work with brokerage companies, hoping to receive services from brokerage companies, at this time brokers become customers, considered as wholesale customers of insurance companies.

5- Replacement products

Non-life insurance products are standard products, with no differentiation between competitors; Therefore, customers have more and more information about products from competitors in the industry… Every year, customers review insurance contracts and organize bidding to collect quotes from the market. Therefore, the company has not yet introduced any replacement products to improve competitiveness in the insurance market.

4.3.4. Summary of factors in the SWOT matrix

To synthesize the factors of strengths, weaknesses, opportunities, challenges as well as the combination of factors to determine the company's business strategies, the author relies on the process of analyzing the company's current strategy and synthesizing comments through the questionnaire of interviewing experts in the industry. The summary table of factors in the SWOT matrix is shown in Appendix 12.

Appendix 12: Summary of factors in the SWOT matrix of IAI company

4.4. Achievements in the process of implementing IAI's strategy

Through the analysis process, we see that IAI company's strategy is:

(1) Market penetration strategy

(2) Market development strategy

(3) Strategy for development

The company's current strategy is aligned with the company's goals, the company's actual situation and the development trend of the insurance industry in the market (Appendix 13: Forecast of market premium growth figures 2011 - 2015)

The company's strategy implementation process has achieved certain results:

- The company's strengths are understanding potential customers; strong bank distribution channels; advantages from the strong brands of the two parent companies; good service quality. In addition, from analyzing the company's strategy according to the delta model, strategic map, Machael E. Porter's five competitive forces model, SWOT matrix, we see that the company's opportunities are numerous, such as increased foreign investment; strong domestic investment; high and stable credit balance of the Industrial and Commercial Bank; ending protection for domestic enterprises; especially in the scope of learning and development, the training of the company's human resources is highly focused, which shows that the company places a central role in the company's strategy of rectification for development. The company believes that in order to achieve the goals of market penetration and market development, improving the qualifications of its employees is important and necessary. With high staff qualifications, management, implementation of marketing strategies as well as expansion to other customer segments outside the company's current target market will be more effective.

4.5. Limitations in the strategy implementation process of IAI company

- Has not yet set out the company's mission and vision until 2015.

- The ability to receive insurance compared to main competitors Bao Minh and Bao Viet is not high.

- There is no specific plan for marketing activities, salary and bonus policies are not reasonable; there is no information exchange between branches, no information collection on the market and no information publication on the website.

CHAPTER 5

ASSESSMENT OF THE CURRENT BUSINESS STRATEGY OF ASIAN INSURANCE COMPANY (IAI)

5.1. The connection between IAI's mission and strategy implementation process

Through the process of analyzing the company's strategy, we see that the strategy that the company has proposed is consistent with its goals. The company's goal is to build IAI into a strong brand in the non-life insurance industry in Vietnam; to build sustainable competitive advantages: service quality, strong distribution system. However, in the process of implementing the strategy, the company still has the following limitations:

a- Marketing activities are not good, the company still relies on the strong brand from the parent company, and has not yet set out a specific plan to build a strong brand for the company in the Vietnamese market.

b- Information system

- Information exchange between branches: information exchange between headquarters and branches is not carried out and checked regularly, leading to information that branches do not receive in time.

- Market information collection: due to lack of attention and professional assignment, market information collection has not been done regularly, the work of collecting information about new investment projects is mainly collected and processed by marketing staff themselves, so the efficiency is not high. The company has not organized to collect feedback from customers.

- Information disclosure: The company currently discloses information on the websites of its parent companies, Asia Insurance Company and the Industrial and Commercial Bank. However, information updates are not done regularly and the information is still poor.

5.2. The effectiveness of the strategy in relation to the internal and external environment of the company

To evaluate the effectiveness of the strategy in relation to the company's internal and external environment, the subject will calculate the results based on consulting with industry experts.

( Appendix 16: Interview questionnaire with industry experts )

5.2.1. The effectiveness of strategy in relation to the internal environment

Appendix 14: Internal Factor Matrix (IFE)

Through the internal factor evaluation matrix, we see that the total score achieved is

2.71 out of the average of 2.50, IAI's capacity is the understanding of potential customers and IAI's expertise is a strong distribution system. Therefore, building strategies need to promote the capacity and expertise along with the strengths of the business. In addition, there should be ways to overcome weaknesses such as: improving information systems and marketing activities...

5.2.2. The effectiveness of the strategy in relation to the external environment:

Appendix 15: External Factor Evaluation (EFE) Matrix

Through analysis in the EFE matrix, we see that the company has taken advantage of opportunities from the external environment such as increased foreign investment, high and stable credit balance of the Industrial and Commercial Bank, more competitive market, the company has not responded well to opportunities such as untapped potential markets, compulsory fire insurance is being considered for approval... The total important score of IAI is 2.62 points, above average, this shows that IAI has responded quite effectively to external factors.

5.3. Difficulties in the process of linking corporate strategy with the competitive environment

- New companies entering the market and companies that have been present in the market for a long time together exploit the potential market. Competition in the market today is often fierce. There are unfair competitive measures such as reducing fees to the point where it is difficult to arrange reinsurance contracts or reinsurance for reinsurance companies that do not meet the standards set by the Ministry of Finance, which is to be ranked BB or higher, paying commissions to customers contrary to the regulations of the Ministry of Finance... Therefore, the company faces many difficulties: especially in terms of customers, competitors and products.

CHAPTER 6

PROPOSED SOLUTIONS TO IMPROVE THE BUSINESS STRATEGY OF ASIAN INSURANCE COMPANY (IAI) TO 2015

6.1. Proposed mission and vision of IAI company

6.1.1. Mission

IAI's development strategy is to target the Vietnamese insurance market. In addition to customers with relationships with industrial and commercial banks, IAI will focus on individual consumers. In the current context and in the next 5-10 years, Vietnamese consumers will use many insurance products that are considered necessary such as: compulsory insurance products, insurance products with high loss rates, and necessary to buy (for example, auto physical damage insurance ...). Therefore, IAI's mission is: IAI is committed to bringing the community practical insurance products and standard service quality through a nationwide sales and customer service system.

6.1.2. Vision

IAI’s vision is to become the leading enterprise (possibly the leader) in retail market share in the Vietnamese non-life insurance market. When strong enough, IAI will be a large insurance company, having a deep and wide influence on society and truly become an “Insurance Company of the community”.

6.2. Propose solutions to implement the strategy

6.2.1. Marketing solutions

6.2.1.1. Product solutions 1- Product ideas :

- The company needs to research and exploit types of insurance that are in high demand and the competition is not too fierce such as employee welfare insurance, product liability insurance, professional liability insurance, etc.

- The company needs to research to differentiate products from standard products, offering terms and conditions suitable for specific market segments.

such as property insurance products for mortgaged assets such as machinery insurance, factory insurance according to each value...

6.2.1.2. Pricing solutions

- Apply preferential policies for customers who have participated for many years, reduce fees for customers who have no losses, support costs to prevent and limit losses...

6.2.1.3 Marketing solutions

- Promote advertising and propaganda activities through the Industrial and Commercial Bank system to penetrate deeper into the bank's customer market segment such as installing signs at bank branches; participating in the bank's customer conferences; organizing company introduction sessions, introducing products to the bank's customers; participating in articles about the company's activities in the monthly magazine published by the Industrial and Commercial Bank...

- Actively participate in foreign business associations in Vietnam such as SBG (Singapore Business Association), MBC (Malaysian Business Community), TBA (Thai Business Association) ...

- Advertising in newspapers should be done in batches, with a purpose and plan from the beginning of the year, advertising evenly in economic newspapers nationwide such as Saigon Economy, Investment, VnNews, VIR. Not advertising separately will not bring high efficiency. Actively advertise in internal information newspapers of associations that the company participates in.

- Strengthen propaganda work by regularly posting information about the company in newspapers and media, company leaders regularly participate in talks or interviews about insurance-related issues in newspapers and radio stations to bring the company's brand name to the business community.

- It is necessary to fully display and update information about the company on the website of the Industrial and Commercial Bank and Asia Insurance Company, and move towards building a separate website for the company.

6.2.2. Human resource solutions

- Build a reasonable and scientific salary and bonus regime to motivate employees,

especially marketing staff;

- There are many forms of rewards linked to business performance, encouraging employees to work actively;

- Pay attention to psychological factors in human resources work and employee relations;

- Build a friendly working environment to improve work efficiency and build employee loyalty to the company;

- It is necessary to develop a specific promotion mechanism to stimulate employee performance as well as retain old employees;

- The company needs to care about the personal lives of employees so that employees stay with the company.

6.2.3. Information system solutions

The company needs to pay attention to organizing a strong information department and an appropriate mechanism to facilitate the optimal flow of information within the enterprise and between the enterprise and the market. All the potential of the human resources, professional skills and positive working attitude can only be promoted by a system that encourages the exchange of information between members of the company. Therefore, the company needs to implement the following information system solutions:

- Need to invest in purchasing business management software to serve risk management and customer management;

- It is necessary to research and build a separate website for the company so that the work of disclosing information to the outside can be done professionally and raise the company's brand to a new level;

- Information system personnel should prioritize those with simultaneous expertise in information technology, network management and business;

- It is necessary to organize the work of collecting information from the market, information about customers and information about investment projects. There must be specialized staff to carry out the work of collecting and preliminary processing before disseminating it to the entire company.

CHAPTER 7 CONCLUSION

Operating in a dynamic environment and fiercely competitive market like the current Vietnamese insurance market, with large and long-standing companies in the market, occupying most of the market share, a newly established company like IAI Insurance Company needs to plan for itself a specific and clear business strategy.

Based on the generalization of the theoretical foundations of strategic management and the use of practical research and analysis methods, the author has proposed solutions to perfect the development strategy for the company until 2015. Accordingly, the company should focus on the following issues:

- The company must define the mission and vision of IAI company by 2015: committed to bringing to the community practical insurance products, standard service quality through a nationwide sales and customer service system, being the leading non-life insurance company in the retail sector, truly becoming the "Insurance Company of the community".

- Market penetration strategy: Important and prioritized to penetrate deeply into the company's target market segment, which is the customer base of foreign-invested companies from the region and customers borrowing capital from industrial and commercial banks through the bank's distribution network.

- Market development strategy: In addition to the initial target market, with the company's strengths, the company needs to expand to the segment of small and medium enterprises in Vietnam to take advantage of market opportunities.

- Strategy to rectify for development: to develop firmly and successfully in the Vietnamese market, the company needs to rectify and improve the company's weaknesses such as: marketing (price, product, promotion); information system; human resources; research and development, etc.

By proposing solutions to implement appropriate business strategies, the author hopes to have contributed useful ideas to the development of IAI in particular and the non-life insurance industry in general. The author believes that if the above solutions are applied synchronously and effectively, IAI will be successful in doing business and developing in the Vietnamese market.

Comment