Five Forces analysis of More Than insurers.

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Five Force Analysis


Task 3

Ian Carr

Maria Brown

Student No 099014890

Contents Page

Introduction                                                        Page 3

SWOT Analysis                                                Page 4

Porters Five Forces Model                                            Page 5 - 8

Competitive Rivalry                                                       Page 9 -10

Development of Technology                                         Page 11

Restrictions of this Model                                            Page 12                                                                

Conclusion                                                        Page 13

References                                                        Page 14

Appendices                                                        Page 15


This report intends to understand through strategic management the competitive position of the business, by looking at the five force analysis model.

More Than, part of the RSA Group, have been established for over ten years.

In August 2010, the organisation implemented a new Motor Aggregator Product known as echoice. The key objective was to deliver a motor product, specifically targeted and priced for the aggregator market. echoice offers core coverage at competitive prices, with a range of add-on services promoted throughout the product lifecycle. This product was developed to enable RSA to improve profitability in a highly price-sensitive channel. This e-self service product was introduced to avoid increase in operation costs and to improve customer service and expediency. This product is still a relatively new proposition to the market. This was a product that the organisation had to be aware of how the competitors would react, but also customer feedback was also something that had to be considered moving to a self service product. Although echoice are less than two years old, the business is now growing rapidly and predicted to be on target for the forecasted growth intended.

Part of the echoice strategy is to have a Core Operating Ratio (COR) of

96.5%.  This means, if the company achieves the COR target they will be effectively growing the business at the right cost.  

To do this the organisation must

“Create a competitive strategy that must establish a profitable and sustainable position against the forces that determine industry competition “(De Wit Meyer, M 1999)

SWOT Analysis

As a starting point for developing strategic options a SWOT analysis is used, Appendix 1 (SWOT) has highlighted the areas that could potentially increase profit or have the opposite effect.

A SWOT can invite decision makers to consider important aspects of their organisations environment and help them organise their thoughts.

Business Strategy Review, 2003, Volume 14 Issue 2 pp 8-10

The SWOT table does show a lot of information and highlights key issues, however it does not show any priority issues or opportunities.  It also demonstrates a lack of strategic judgement about what is really important about the business.  With its lack of any explanation it can be misleading on any of the points.  A Shortlist with each point well argued is more likely to be convincing.  

A business always needs to stay ahead of the game or be aware what weakness they have and what competitor threats could damage the business.  

There is no doubt this is a valuable tool in the field of business strategy because it invites decision makers to consider important aspects of their organisation’s environment and helps them organise their thoughts. The idea that managers should be thinking about their organisation’s SWOT based variables is very important in the process of decision making.

They key area that RSA has been particularly aware of, is the new echoice product has been an opportunity for the organisation as it has been targeted as a price orientated product and being able to get a foothold in the market. This falls into the opportunities however a threat for insurance overall is the threat of new entrants due to the return of an underwriting profit through tactical fraud prevention and the internet which may open up large competitors to come into the market.

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Porters Five Forces Model

“The essence of formulating competitive strategy is relating a company to its environment. Although the relevant environment is very broad, encompassing social as well as economic forces, the key aspect of the firm’s environment is the industry or industries in which it competes.”(Porter, M.E 1980)

This type of model of analysis is often undertaken using the structure proposed by Michael E Porter (1980), as per Fig 1.0. This is often called Porters Five Forces Model because he identifies five basic forces that can act on the organisation:


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