Contingent Value of Dynamic Capabilities †MyAssignmenthelp.com

Question: Discuss about the Contingent Value of Dynamic Capabilities. Answer: 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. 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). 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 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 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 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 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). 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). 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). 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 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. 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. Diversification of the needs of the customers is one of the opportunities of AIA Life Insurance Company wherein there is rising demand for the different kind of insurance products wherein it is seen that there are huge number of women who are entering into the workforce and helping in dealing with the needs of the customers as well (Wirtz et al. 2016). Benefit of low cost of the entire capital is the other opportunities wherein the slow growth of the economic activities and the growth of the population can look for outside growth and the low cost of capital is allowing AIA insurance company to grow in an expanding manner (Brewster 2017). Acquisition and mergers deals are the other opportunity wherein it is seen that there are different kind of new mergers and acquisitions deals have been struck by different companies in AIA insurance company (Johnson 2016). This kind of opportunity can help the company in broadening their customer base and this will help in solving the issues in an effectual manner as well. The different kind of mergers and acquisitions will help in solving the different kind of growth related issues in different kind of companies as well. Dilution of the value of the shareholders is one of the major threats in AIA life insurance company wherein the entire practice of longstanding valuing relationship with the different shareholders can cause and create hindrance for AIA Company and this will consolidate further as well and this can be a huge threat for the company as well. The global economic crisis is the other threat for the AIA life insurance company wherein there can be huge number of new entrants in the market that will affect their sales in the company or in the entire insurance sector. The harsh kind of economic conditions can harm the company in a drastic manner and the slowing rate of growth adopted by them can impact the management of the company in a negative manner as well (Lasserre 2017). The entry of the new NBFs in this sector is becoming a huge threat for AIA insurance company wherein this is creating huge pressure on the respective company as well. There are various competitors of AIA insurance company wherein the main competitors are Bajaj Alliance, Reliance Life Insurance and Sahara Life Insurance company as well (Morden 2016). These are the different kind of threats, opportunities, weaknesses and strengths of AIA Life Insurance Company. With the help of the SWOT analysis, it can be seen that the company has different kind of competitors in the market that can create huge pressure and dilemma on them. The negative rate of the policy of interest can cause huge issues and negative impact on the company that will cause due to the instability in the market and this will cause issues in the economic conditions of the company as well in the near future. Conclusion Therefore, it can be concluded that there are different kind of strengths, weaknesses, opportunities and threats of the AIA Life Insurance Company that is negatively as well as positively impacting the company. It has been seen that there are different kind of macro environmental factors that is causing huge issues in the organizations stability as there has been huge volatility in the industry. Furthermore, it has been seen that there are different kind of issues in the AIA insurance company that can become threat for them and this is becoming competitive advantage for the other competitive firms in the industry. Furthermore, the PESTEL analysis of the respective company has helped in understanding that there are few issues in terms of the technological advancements and legal factors that will cause huge issues in their advancement of the company. Proper steps have been taken by AIA life insurance company wherein this will be a huge support for the company that is continuous in nature and this helped in gaining competitive advantage in the entire competitive market as well. The legal factors are handled by AIA insurance company wherein it is seen that they need to understand the cause of the instability in the market and this has led to bringing stability in the companys stocks as well. References Aia.com. (2018). AIA Group Limited - Pan-Asian Life Insurance Company. 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