An Assessment of the Business Environment of Zurich - Case Study Example

? An Assessment of the Business Environment of Zurich Introduction Zurich was reported to have been founded in 1872, 140 years ago, as an insurance solutions provider on a global scale. As clearly and explicitly stated, the organization’s mission is to “help our customers understand and protect themselves from risk” (Zurich Insurance Company Ltd, 2012, par. 1). Current figures indicate that Zurich employs about 60,000 employees and has customers from as many as 170 different countries world wide. The customers range from individuals and business organizations that range from small, mid-size, to large and multinational corporations. Likewise, their products and services are diverse and categorized according to the clientele they serve. These products and services range from motor vehicle and home insurance, life insurance, savings and investment, as well as pension and retirement planning (for individual clients); property, casualty, workers’ compensation, corporate life and pensions, financial lines, and accident and health (for small and mid-sized organizations); and finally construction, global energy, marine, motor fleet, international programs, and risk engineering (for large and multinational corporations). As Zurich operates in a vast global environment, the purpose of this case study is to provide an assessment of the business environment of Zurich. Specifically, the following questions would be addressed: (1) what is meant by the term “customer centric”? How has Zurich’s primary research helped it be even more customer focused? (2) Explain the difference between primary and secondary market research. How could secondary data support primary research? (3) Analyse how Zurich positioned itself in a customer focused way. (4) Evaluate to what extent help point has enable Zurich to differentiate itself in the insurance market and provide an example of similar service provided either within the same or different environment. Environment The article on Business Environment published online by the Excel College of Higher Education defines the business environment as “the influences and pressures exerted by external factors on the business” (Excel College of Higher Education, n.d.). As such there are eight constituents of the business environment composed of: demographic, economic, geographical and ecological, legal, technological, social, educational and cultural, as well as the political environment. For Zurich, as a global organization, its scope of operations include Europe (Germany, Spain, Italy, Switzerland, United Kingdom), North America (USA, Canada), Asia-Pacific (Australia, Malaysia, Indonesia), and other markets such as Mexico, Argentina, Chile, and Brazil (Zurich Insurance Company Ltd., 2012). Their business environment is therefore vast as it encompasses strategic locations worldwide. Further, due to the wide span of demographical and geographic scale, both opportunities and risk abound. Thus the prevailing economic, political, socio-cultural and legal factors that applies in the respective countries wherein Zurich operates influence their business activities. Their financial success really depends on the strengths and competitive advantages manifested by Zurich and the reaction, as well as response of entrenched competitors within their area of operations. Business Aspect (1) What is meant by the term “customer centric”? How has Zurich’s primary research helped it be even more customer focused? The term customer-centric means that “the customer (is placed) at the center of policy-related processes” (Gujral, 2007, p. 48). The meaning is more expounded by Booz Allen Hamilton (2004) who averred that customer centric organizations, like Zurich, “moved beyond lip service and re-oriented their entire operating model around the customer, increasing customer satisfaction, and their own profitability in the process” (Hamilton, 2004, p. 1). As indicated in the Zurich case study on “Providing a customer-centric service” (The Times 100, 2012), “a customer-centric firm will use the research findings to improve all aspects of its proposition” (p. 2). As such, Zurich employs market research “to understand what potential customers want from their insurance company. Research can also be used to find out how Zurich and its services are perceived by existing customer” (The Times 100, 2012, p. 2). Zurich use of primary research helped the organization to be more customer-centric focused in terms of providing relevant information about the customers that the organization needs. More importantly, through primary research, the information that would be gathered, collected and evaluated by Zurich would not be available to its competitors (The Times 100, 2012). (2) Explain the difference between primary and secondary market research. How could secondary data support primary research? In differentiating primary and secondary market research, the answer lies in the type of information gathered that is already available and accessible to others. In primary research, the information, as emphasized, is only accessible to Zurich and could not be accessed nor viewed by external sources (the public or the competitors). In contrast, secondary research was reported to draw on information that is already currently available. In terms of cost and the length of time needed to conduct the research, primary research is more expensive and tedious; while secondary research is cheaper and information is easier to collect (The Times 100, 2012). From the experience of Zurich, secondary research is used to support primary research in terms of the use of market research conducted in the insurance industry, per se. Secondary research provided information on the percentage of consumers using online advertisements for insurance needs, for instance, and therefore, this information could be used to support that data collected from primary research. (3) Analyze how Zurich positioned itself in a customer focused way. Zurich positioned itself in a customer focused way through the effective use of both primary and secondary research methods in identifying potential consumers and in addressing their specific needs. As emphasized, “all of Zurich's primary and secondary research had led to the conclusion that customers want relevant, reliable help from their insurance provide… These research findings helped Zurich to identify the position it should take in the market. The strategy was to make the Zurich brand synonymous with 'help'” (The Times 100, 2012, p. 4). In greater detail, it was thereby clearly disseminated to the consumers that Zurich is positioned to address the following consumer needs: (1) in “giving customers what they need; (2) in the right place and at the right time; (3) in a fast, fair and easy way; and (4) with Zurich's people focusing entirely on customer requirements” (The Times 100, 2012, p. 4). Likewise, Zurich recognized the need to communicate this positioning to their employees through a brand promotion campaign that included strategies such as advertising the brand globally; providing extensive and comprehensive information about Zurich through its official website; through sponsorship of various civic and sports events; and through the use of direct marketing strategies (mail or email correspondences). Finally, and more accurately, Zurich designed the HelpPoint solution, the name “Zurich uses to describe the many ways in which Zurich delivers what customers need when they need it” (The Times 100, 2012, p. 5). By designing and implementing strategies that define extending comprehensive services to the customers to address their various needs, Zurich has exemplified the embodiment of a true customer-centric organization. (4) Evaluate to what extent help point has enable Zurich to differentiate itself in the insurance market and provide an example of similar service provided either within the same or different environment. HelpPoint solution has enabled Zurich to differentiate itself in the insurance market through the use of job mapping (Bettencourt and Ulwick, 2011). As emphasized by Ty R. Sagalow, the Head of Proposition Development at Zurich North America Commercial, citing the four commitments to understanding the customers’ needs according to their chief marketing officer, “Give them everything they would expect, some things they might not, together with unique and helpful services, all supported by a carrier’s strong financial health. We created the concept of “Zurich HelpPoint” to express how our job to be done is helping our customers better manage their risks, both known and unknown” (Bettencourt and Ulwick, 2011, p. 1). As such, through assuming a proactive stance, through marketing research, and with the use of HelpPoint, Zurich is able to anticipate the needs of the consumers and determine that the organization could potentially address these needs in enabling customer satisfaction at its best. In a different environment, the HelpPoint was paralleled in terms of the solution designed by Microsoft to address their customers’ inquiries through Microsoft Support. This website is designed by Microsoft to solve common problems related to product activation issues, virus or security issues, system performance issues, printing problems and other technical problems (Microsoft, 2012). Future Steps As Zurich recognized the relevance of market research in line of diverse factors that impact the business environment, in the interview with Ty R. Sagalow, he emphasized that Zurich as developed a supply chain policy, admittedly the first in the industry, in response to the natural disaster that devastated part of Japan (Bettencourt and Ulwick, 2011). Likewise, Sagalow revealed that “in our pipeline, we have a number of risk reduction products that arose out of our advance understanding of our customers’ jobs to be done” (Bettencourt and Ulwick, 2011, p. 1). In the Letter to Shareholders 2012, it was also disclosed that “In April 2012, we sustained our momentum in developing our presence in high-potential growth markets by signing a ten-year distribution agreement with HSBC in the Middle East. Under this arrangement we will be the exclusive provider of wealth insurance products to HSBC clients in Bahrain, Qatar and the United Arab Emirates. Progress also continues in the Asia-Pacific region, where we have expanded our reach in Singapore through acquiring licenses to access all of our target segments for life insurance products” (Zurich Insurance Company Ltd., 2012, p. 2). The organization likewise expressed strengthening its stronghold in areas such as Malaysia, where they apparently changed the newly acquired Malaysian Assurance Alliance Berhad (MAA) to the Zurich brand (Zurich Insurance Company Ltd., 2012). Another acquisition was arranged in Latin America from the purchase of Banco Santander S.A. (Zurich Insurance Company Ltd. 2012). Conclusion, Recommendations and Personal Evaluation From the foregoing, it could be deduced that Zurich’s strength and ability to highlight their competitive advantage in the global insurance market is mainly due to its expertise in using market research to continually maintain the customer-centric approach. Despite the challenges it faced due to the innumerable number of competitors in countries that they opted to venture in, their ability to focus on determining the need and effectively addressing these needs through their HelpPoint solution differentiated Zurich from its global competitors. Likewise, their length of experience and expertise in this field of endeavor extends for more than 140 years making them the pioneer and icon in global insurance solutions. Commitment to their mission, vision and goals was made possible through enjoining the employees to work jointly towards satisfying and even delighting the consumers through addressing their holistic and comprehensive needs. Reference List Bettencourt, L.A., and A.W. Ulwick. 2011. "The Customer-Centered Innovation Map." innovationinsurancegroup.com, [Online]. Available at: http://innovationinsurancegroup.com/images/Interview_with_HBR_on_Innovation_- _April_2011.pdf (Accessed August 15, 2012). Excel College of Higher Education. n.d. "Business Environment." navimumbaicollege.com, [Online]. Available at: http://www.navimumbaicollege.com/uploads/22BE.doc (Accessed August 14, 2012). Gujral, V. 2007. "Customer-centric operations:A best practice approach to policy administration." Journal of Insurance Operations, 47-80. Hamilton, B.A. 2004. "The Customer-Centric Organization: From Pushing Products to Winning Customers." booz.com, [Online]. Available at: http://www.booz.com/media/file/141263.pdf (Accessed August 14, 2012). Microsoft. 2012. "Microsoft Support." support.microsoft.com, [Online]. Available at: http://support.microsoft.com/ (Accessed August 15, 2012). The Times 100. 2012. "Providing a customer-centric service: A Zurich case study." businesscasestudies.co.uk, [Online]. Available at: http://businesscasestudies.co.uk/zurich/providing-a-customer-centric-service/market- research.html (Accessed August 15, 2012). Zurich Insurance Company Ltd. 2012. "About Us: Who We Are." zurich.com, [Online]. Available at: http://www.zurich.com/aboutus/ataglance/whoweare/ (Accessed August 14, 2012). Zurich Insurance Company Ltd. 2012. "Global Insurer." zurich.com, [Online]. Available at: http://www.zurich.com/aboutus/ataglance/globalinsurer/ (Accessed August 14, 2012). —. 2012. "Letter to Shareholders 2012." zurich.com, [Online]. Available at: http://www.zurich.com/internet/main/sitecollectiondocuments/letter-to-shareholders/lts- q1-2012-en.pdf (Accessed August 15, 2012). Read More