Case Analysis of Nationwide - Research Paper Example

? Final Project: Case Analysis of Nationwide Number September 26, Case Analysis of Nationwide Company Overview and Historical Background Nationwide is known as an insurance and financial services organization which reportedly originated more than 85 years ago (Nationwide, 2013). The organization has explicitly emphasized that its core values focus on its pool of human resources, as well as in serving the varied needs of its clientele through a customer-focused orientation (Nationwide, 2013). Aside from these core values, management has likewise signified adherence to other core values which include honesty, integrity, trust, and respect. The current discourse hereby aims to present a brief case study on Nationwide in terms of discussing the organization’s goals and strategies that was deemed formulated to help it maximize its total value; prior to presenting an explanation of the company’s abilities and market opportunities that help it create value for its stakeholders. Likewise, a Porter’s Five-Forces analysis would be conducted to incorporate the basic framework of value-driven strategy. Finally, a discussion on how the company can apply the Christian worldview of money, morality, and social responsibility to impact the business would be expounded in both the sort-term and long-term. Company’s Goals and the Strategies that Maximize its Total Value The vision statement of Nationwide is explicitly disclosed as follows: “to be the trusted advocate for U.S. consumers and businesses by protecting what matters most and building a secure financial future” (Nationwide, 2013, par. 1). As such, the company designs its organizational strategies using the vision statement as the ultimate goal. According to Spulber (2009), “organization driven goals are based on recognizing unique organizational abilities and resources that will help the company prevail over its competitors” (p. 14). The total value of the firm is likewise described as “the present value of the stream of profits over the long term” (Spulber, 2009, p. 40).With these in mind, Nationwide has been perceived to have designed strategies that maximize the value of the firm by instituting the following actions: (1) protecting the things considered most important to clientsm through superior customer service; (2) providing solutions for the protection through various products and services that cater to varied needs; (3) providing stable, reliable, and diverse business portfolios; (4) providing greater access to products and services through varied and greatly accessible means; and (5) provision of support to the local communities within the organization’s vicinity (Natiowide, 2013). The the effective implementation of these strategies, it was therefore revealed that Nationwide generated as much as $22,650,000 in total revenues in 2012 and a net income of $940,000 in the same year (Nationwide, 2012). Company’s Abilities and Market Opportunities that Create Value for its Stakeholders Spulber (2009) has emphasized that “the abilities of the organization are its resources and competencies” (p. 161); where resources were explicitly defined as the “tangible physical assets…and more complex information resources” (Spulber, 2009, p. 161). Concurrently, the firm’s competencies are its “technological expertise, process capabilities, functional skills, and other firm-specific abilities” (Spulber, 2009, p. 161). These abilities are therefore evaluated using internal analysis. On the other hand, through external analysis of the macro-environment, the organization is able to determine the opportunities which abound and which could be tapped or capitalized to create value to its stakeholders. For Nationwide, the firm’s resources could be determined through a closer evaluation of its physical assets, which could be viewed it in balance sheet items. As of December 31, 2012, its total assets equal $168.3 billion. Other financial highlights which prove Nationwide’s strength include its superior leadership and commitment to social responsibility. Among its competencies are: ability to manage risk and capital; honoring promises to pay clients in times of claims; and focusing on establishing long term relationships with clients (Natiowide, 2013). The opportunities in the local and international market abound in terms of increased preferences for consumers to acknowledge the need for insurance coverage using the organization’s varied portfolio. Thus, Nationwide is capable of catering to specific demands of their clientele according to their profile. By matching these abilities with the opportunities in the market, Nationwide is able to apply the abovementioned strategies to successfully achieve identified goals. Porter’s Five-Forces Analysis Michael Porter was noted to have defined the five forces framework using the following components: customer, suppliers, established rivals, substitutes, and potential entrants (Spulber, 2009, p. 107). The five forces analysis is hereby applied to Nationwide and the following details are noted: Customer: Nationwide’s customers are varied: from individuals, family, as well as public and private organizations. These are deduced from the products and services offered, such as: vehicle insurance, property insurance, life insurance, specialty insurance (pet, identity theft, travel, farm, personal umbrella liability, and international travel medical insurance), and banking services (Nationwide, 2013). As such, the diverse needs and demands of the customers are seriously taken into consideration when designing strategies or changing existing strategies to cater to their requirements. Suppliers: Nationwide’s products and services could be considered innately designed according to the organization’s abilities (resources and competencies). As such, there are limited external factors from suppliers which could significantly impact on the implementation of the company’s strategies. In this regard, their suppliers have limited influence in dictating the prices for their products or in driving the organization to change any of their currently designed. strategies Established Rivals: Competition for Nationwide comes from established and well known insurance organizations, such as Prudential Financial Inc. and Allstate Corporation, among others. There are actually a number of other insurance organizations which vie for market leadership. However, the strengths and core competencies of Nationwide has consistently made them successful, as attested by their consistent inclusion among Fortune’s Top 500 organizations (Natiowide, 2013). Substitutes: The industry within which Nationwide operates could be described as composed of organizations with highly substitutable products. The disparities in products and service offering comes in terms of implementing innovative strategies in price and promotions. Potential Entrants: Due to the similarities in products and service characteristics, and the ease within which these could be offered through expertise of new and potential entrants, it could be deemed that there is high percentage of increased potential entrants within their industry. This information makes it challenging for Nationwide to think of strategies that differentiate them from the rest. Application of the Christian Worldview Nationwide has openly announced in its annual report as of 2012 that it has contributed as much as $25 million to the local community, as part of its social responsibility program (Natiowide, 2013). It has established the Nationwide Insurance Foundation whose mission is “to improve the quality of life in communities in which a large number of Nationwide members, associates, agents and their families live and work” (Nationwide, 2013, par. 1). The commitment was also asserted in its philosophy as a corporate citizen through affirming that: “at Nationwide, being a good Corporate Citizen is more than what we do, it’s who we are” (Nationwide, 2013, par. 1). As such, their commitment to uplifting the lives of others through sharing their financial blessings have been commendable. In the process, their genuine desire to give to nonprofit organizations, which likewise address varied needs of the people within their local communities generate considerable returns in terms of continued support and patronage to their products and services. A number of their noteworthy contributions to the community are hereby disclosed, to wit: “awarded more than $310 million to 3,000 qualified nonprofit organizations that work to meet crucial needs in communities with a significant presence of Nationwide associates” (Nationwide, 2013, par. 3); “in 2006, the Foundation pledged the largest gift in its history, granting $50 million to Nationwide Children's Hospital” (Nationwide, 2013, par. 4). These endeavors evidently supports the organization’s thrust for social responsibility by unselfishly sharing their financial blessings to those in need. As such, the gratitude that community members feel, in the process, could be realized and recognized through the support and patronage to Nationwide’s products and services – which is clearly visible through the significant financial returns reported in their annual report. In addition, the positive company image generated from these endeavors is also contributory to the exemplary ratings that they have consistently generated from financial regulatory bodies and rating agencies, such as A.M Best, Moody’s, and Standard & Poor’s, which all provided an A+ rating to Nationwide (Natiowide, 2013). Conclusion The case analysis of Nationwide confirms that organizations that clearly establish goals and strategies contribute effectively to the maximization of the firm’s total value. Likewise, their abilities which perfectly match market opportunities also helped create the needed value for its stakeholders. Through the analysis provided using Porter’s five forces in examining Nationwide’s customers, suppliers, existing rivals, substitutes, and potential entrants, it was evidently clear that the organization has effectively capitalized on their strengths and core competencies which enabled them to address any threats and weaknesses posed by potential entrants and other external forces impinging on their current and future operations. Finally, through endeavors that attest to their unselfish sharing and commitment to social responsibility, Nationwide has confirmed application of the Christian worldview which makes their every endeavor worthwhile and beneficial for the greatest good. References Nationwide. (2012). 2012 Annual Report. Retrieved from static.nationwide.com: http://static.nationwide.com/static/Nationwide-2012-annual-report.pdf?r=40 Nationwide. (2013). Company Overview. Retrieved from nationwide.com: http://www.nationwide.com/about-us/corp-overview.jsp Nationwide. (2013). Nationwide Insurance Foundation. Retrieved from nationwide.com: http://www.nationwide.com/about-us/nationwide-foundation.jsp Nationwide. (2013). Products and Services. Retrieved from nationwide.com: http://www.nationwide.com/about-us/nas-products.jsp Nationwide. (2013). Vision and Values. Retrieved from nationwide.com: http://www.nationwide.com/about-us/careers-vision.jsp Natiowide. (2013). Read Nationwide’s Annual Report. Retrieved from nationwide.com: http://www.nationwide.com/about-us/nationwide-annual-report.jsp?NWOSS=annual+report+2012&NWOSSPos=1 Spulber, D. (2009). Economics and Management of Competitive Strategy. World Scientific Publishing Co. Pte. Ltd. Read More