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1
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It is joint venture of
European financial expert AXA Group and Leading Indian business player Bharti Group
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This group providing various
products and services to cater to specific insurance and wealth management needs (Bharti-AXA ,
2015)
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Turnover of AXA was Euro 92
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1 billion in 2014
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Bharti Enterprises is one of leading business group in Indian having presence in telecom, agri
business, financial services, retail and manufacturing
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Vision of Bharti AXA life insurance company: - Market leader in Insurance, financial protection
and wealth management field
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1
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b) Process and Product differentiation from competitors
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2
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Importance of analysis the external environment when determining strategy
In today’s business environment, the company ability to adopt changes will determine its
upcoming growth, sustainability and success
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For proper strategy planning and management need to
determine external factors which can affect the company performance and also identify factors
which are affecting their competitor’s strategy
...
Changing external environment not

only impact single company but it normally common for an industry and company which has
taken preventive action in advance can survive in environment (Khan, 2015)
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Performance and accuracy should be high for firm which want to take
opportunities of this changing environment (Wiklund & Shepherd, 2005)
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Environmental aspects are
can be competitive advantage for firm if they have ability to understand environment (Khan,
2015)
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Analytical tools to determine Environmental factors: -

There are many tools to determine external environmental factors
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Porter’s five forces
b
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SWOT analysis

2
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PORTER’S FIVE FORCES
According to Porter (2008), “the strongest competitive force or forces determine the profitability
of an industry and become the most important to strategy formulation
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Five forces are rivalry among existing competitors, bargaining power of
supplier, bargaining power of customer, threat of new entrants and threat of substitute product or
service
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RIVALRY AMONG EXISTING COMPETITORS
Industry Concentration is related to market shares of companies and their success
...
Life Insurance Corporation was single seller of life insurance until
2000 in India with 100% market share, but after privatization in Indian economy in 2000 many
life insurance companies interned in market
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77 percent in 2000 and rise 4
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Life Insurance
Companies are control and regulate by IRDA and Tariff Advisory Committee (Associates,
2002), which restricts competition in life insurance industry
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This process will escalation rivalry in life insurance market
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2
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2
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Insurance company required efficient
software’s to calculate and manage risk of business and insurance properly
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It creates a restrictive for insurance companies to switch sellers and increase supplier power
(Datamonitor, 2011)
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General Insurance Corporation of India, is a government company and set up under an Act of
Parliament in 1972 is the National reinsurer
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Overseas reinsurers operate either through their representative offices or through
reinsurance intermediaries (IRDA, 2000)
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1
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BARGAINING POWER OF BUYERS
Buyers in the company are individual as well as group clients
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Due to wide variety of products and switching
cost of the product, individual buyers have low bargaining power
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Bank also providing insurance services along with their regular products and it is easy for them
to sell in the market
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(Datamonitor, 2011)
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2
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4
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Now Ceiling is increased from 26% to 49%
investment in company by foreign investors FDI
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To use complete distribution network is good for
company but at initial stage it is not possible (Datamonitor, 2011)
...

Changing insurance company is an expensive and also require benefits of buyers, also before
maturity of policy will include surrendering policy and it can be taxable (Datamonitor, 2011)
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1
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THREAT OF SUBSTITUTES
Indian government itself providing pension to government employees
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(Government Of India, n
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) (Pension)
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All these benefits are substitute for tax saving buyers
(moneycontrol
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Emerging Substitutes such as equity linked savings scheme and housing investment schemes that
provides high return compare to regular life insurance products
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com, 2011)
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2
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PESTLE ANALYSIS
2
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1
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In political sphere, hike in FDI limit
increased up to 49 percent and due to this AXA Group increased stake from26% to 49% in
Bharti-AXA insurance company (Business Insider - India, 2015)
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2
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2
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Such as purchasing power, GDP,
Gross national saving and liquidity in Indian market
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6

percent, 2011-12 is 5
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9 percent and 2013-14 is 7
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It affects the insurance business and people tend to spend more when economic
prosperous in country
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5 percent of GDP, in 2012 it was 29
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6 percent and in 2014 it was 29
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Decreasing in Gross national saving is negative sign for industry and Bharti AXA
company
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Today
scenario is different, investment and saving instruments are available as per priority and
requirement hence it has become easier to investors to invest in insurance sector
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Middle class of Indian is
concern for future and invest in saving or investment scheme
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2
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SOCIAL FACTORS

Indian population is growing day by day and currently population of country is 1028 million
(Government Of India, 2011)
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Low insurance coverage: Still 4% of total population of India is covered under any of the social
security schemes which is very low compare to other countries
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(Ernst & Young, 2010)
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Increase in elderly population will require longterm insurance, which cover medical, and health facilities
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Changing Indian perception: Education, WHO social program and Indian government steps
towards life insurance creating more awareness on the need of insurance
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Growth of Islamic insurance: Awareness of life insurance and introduction of customize product
increase growth of Islamic insurance
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India will incur accumulated rupees 11830 billion by 2015 due to unhealthy lifestyles
and faulty diet (The Economic Times, 2008)
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2
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TECHNOLOGICAL FACTORS
Technology will play a very important role in the development of the insurance industry and the
insurance market itself
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Now life insurance
buyers use internet to compare and purchase insurance products
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Now insurer needs to manage their
websites more effectively, understand their customers’ needs and monitor customer behaviour
(Keynote, 2007)
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Increase in CRM solutions: Data management and proper flow of data are important problem for
life insurer
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This instant service has made life insurance industry quite
easy accessible (Keynote, 2007)
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A perennial issue for insurers
is outsourcing
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Demat form introduce to convert policies “E-insurance” will reduce hassle for buyers by
reducing paperwork and smoothening claim procedure (The Economic Times, 2011)
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2
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5
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IRDA has reduced tax deduction for life insurance which promote investors to invest more in life
insurance products (The Economic Times, 2011)
...
Commission is one
of high expenditure for insurance companies and through this they can reduce fixed and semi
variable expenditure (Ernst & Young, 2010) but this is not easy for firm because tide agent and
distributors are main channel of sales
Merger and Acquisition are allowed in life insurance sector by IRDA and its effects as RIL has
acquired Bharti’s stake in life insurance company
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IRDA allowed banks to tie up with life insurance companies to sell their products with banking
products
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2
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SWOT
2
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1
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Policy of India n government also leads to
customers to take life insurance because there is very little social security (Ernst & Young,
2010)
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com, 2011)
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d
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Strong Marketing Campaign – Firm has doing strong marketing campaign in Indian market and
which will create space for firm in this sector (Mbaskool, n
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)
2
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2
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d
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If it will continue than create difficulty to sell life insurance products
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Because of
Insurance companies image it also affect Bharti AXA (Mbaskool, n
...

Life insurance sells through different distribution channels in India, but mainly branch offices
and agents of the firm
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d
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LIC is oldest and
government firm which create difficulty for new life insurance players
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3
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OPPORTUNITY
Elderly population of India is growing and over 60 years of age population will be 113 million
by 2016 and 179 million by end of 2026 (Mckinsey & Company, 2007)
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Indian economy is growing and mainly earning of youths are more growing
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d
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Rural market is totally untapped by any
insurance products (Mbaskool, n
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Bancassurance distribution channel – Cross selling of life insurance products along with
financial and banking services by banks
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Technology is changing day by day and firm can new advance online selling technology with
low cost of distribution and also provide penetration option in new areas (Mbaskool, n
...

2
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4
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Life insurance sector face difficulties to grow
in such environment
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Every year Indian government change
policy and will leads difficulty for insurance companies because they cannot set future plans for
their company (Mbaskool, n
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Formation and controlling bodies of insurance sector such as IRDA and Life Insurance Council
of India are influenced by political
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Entry of new NBFC in life insurance sector – Entering new players are increasing competition
for Bharti AXA
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KEY STAKEHOLDERS OF LIFE INSURANCE COMPANY: 3
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Policyholders: - Better health benefits, Support services whenever required and Long
term saving options and returns
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2
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3
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Management: - To achieve company targets, Make balance between shareholders and
employee’s needs, Good Bonus and services
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4
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Growth of company
(Capital reserch Global Investors, 2011)

(Task 2: - Determine strategic options)
4
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Company
needs to focus on one of differentiation strategic in the product, process of distribution or select
niche market such as rural India
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1
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I suggest to client more
focus on rural market and offer specialized lower premium products for the rural population
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Insurance firm can launch low premium life insurance products for these
class of people
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2
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Now a day’s internet is fastest growing distribution channel for life insurance sector
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This is reducing cost of
distribution for firm
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For new insurer brand image is a problem but coloration with banks
provides brand image and trust of people in the market
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3
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I would like to suggest client to introduce customization in life insurance products as well
as innovative products to increase market share and stability
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5
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1
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Company can use technology and
media to commutate buyers (Poth, 2014)
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2
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In current environment buyers want life insurance as well as saving instrument together
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5
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Innovation: Representing Insurance to target customer should be unique and different for other
competitors
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5
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Valuable Resources: In competitive environment company has to develop and maintain all valuable resources to
utilized strength (Poth, 2014)
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5
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Company has to set limit for their expense to protect policyholder’s long terms interest
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6
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5
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Taxation: Life insurance companies are facing challenges with taxation on demand and supply side of
insurance
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9
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5
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Low Uncertainty and High Stability: - Strategy should have low uncertainty and
high stability
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IMPLEMENTATIONS AND EVALUATION OF A STRATEGY
Implementations of strategy is one of difficult part for any company
...
Many
companies fail due to lack of planning for strategy implementations (Mondaq , 2011)
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Points to be consider for successful strategic implementations: 6
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Action Planning: Firm has to develop strategic implementations plan with proper accountability of all resources
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6
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Organisation Structure: Firm has to identify whether selected strategic is correct for their organisation structure or not
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If company has not considered their structure before strategic implementations, then company
can face issues (On Strategy, 2015)
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3
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Same strategy
implementations fail because of wrong selection of technology
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6
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Monitoring and Control: Firm ha to appoint committee to monitor all the process and works and if there are some gap in
strategy implementations then committee has to take action to control gap (Birnbaum, 2009)
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5
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This will lead positive environment in the firm and will help in strategy implementations (On
Strategy, 2015)
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6
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Before
implementations firm should develop core competencies and required skills for people or hire

new people who are having competencies already
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Considering differentiation strategic in the product, process of distribution or select niche market
such as rural India Bharti AXA can fulfill their vision and mission (differentiations from
competitors, fulfill customer’s expectations and tangible and communicable) of the firm
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PROPOSED VISION AND MISSION STATEMENT FOR BHARTI AXA LIFE
INSURANCE COMPANY
Now a day’s competitions are increasing and to sustain company need core competency in one
of their process, product or resources
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Mission: - Real time support to customer, Providing customer satisfaction with social relevance
and well-being
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FORECASTS
As par management consultancy firm McKinsey India’s life insurance industry will grow
between 5
...
2 percent of Indian GDP in 2012 (Mckinsey & Company, 2007)
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9
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Focus on economic value rather than profitability: I propose to client (Firm) that life insurance
firm has more outflow in short term till breakeven point
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