MBA MILESTONE 4: ENTREPRENEURIAL OPPORTUNITIES

6

ENTREPRENEURIAL OPPORTUNITIES

MBA 515 Milestone 4: Entrepreneurial Opportunities

Entrepreneurial Opportunities

Venture Into Other Insurance Products Other than Health Insurance

Cigna should consider offering other insurance products other than health insurance. For instance, the company could venture into property insurance, fire insurance, or even property and political violence insurance (PVT). This is more so the case given that this would to some extent insulate the company against shocks that specifically impact the health insurance sector. For instance, if adverse regulations relating to health insurance were to be enacted, then Cigna would likely ride the wave without necessarily having its bottom-line significantly affected.

Diversify by Acquiring Majority Stake in Other Non-Insurance Businesses

Cigna should also consider diversifying into other markets outside of the insurance industry - without necessarily exiting the insurance business. For instance, the company could seek to acquire majority stake in companies or enterprises offering services such as security or food distribution. The rationale behind this proposal is that Cigna would avoid being too reliant on revenue streams sourced from the insurance business model which, as the PEST analysis indicates, could be impacted upon by various factors on the economic, political, and even social realms. Burrow and Kleindl (2014) note that diversification aims to maximize returnsby investing in different areas that would each react differently to the same event (p. 113).

Roll out Health Insurance Products that Would Appeal to the Younger Population

As has been revealed by the PEST analysis, available data suggests that in as far as the uptake of health insurance is concerned, age is a critical factor. This is more so the case given that as Cantiello, Fottler, Oetjen and Zhang (2015) observe, the least likely age group to take health insurance is the 18-24 years age category. Being cognizant of this fact, Cigna could develop insurance products designed to bring this particular segment of the market on board. Ideally, this would be a plan independent of the health plans that typically offer coverage to dependents. An example would be a product that targets newly employed young persons. Thus, the proposed product would in this case incorporate services that are specifically relevant to young persons. These would ideally be inclusive of: fitness (i.e. weight loss help services), smoking cessation services, pregnancy care, cholesterol checks, elective cosmetic surgery, etc.

Entrepreneurial Assessment

The entrepreneurial opportunity selected from the list assessed above is venture into other insurance products other than health insurance. On this front, there are various options that Cigna could select from. These are inclusive of, but they are not limited to; property insurance, fire insurance, political violence insurance, marine insurance, etc. The opportunity highlighted in this case is viable for a number of reasons. To begin with, it is important to note that at present, Cigna has a strong network spanning 50 states. Further, the company also has a vast global network with sales offices...

This gives the company ready access to the said markets to roll out other insurance products. Thus, Cigna would not be facing significant entry barriers in such markets which would ease its introduction of the other insurance products highlighted.

Secondly, in rolling out additional products, outside of the health insurance products that the company has in its product portfolio at present, the company would be effectively insulating...

…the reduction of operational costs. Consolidation also enables health insurance companies to go around certain challenges, i.e. barriers to entry in certain geographical markets. With ever increasing competition in this particular market domain, as has been highlighted above, consolidation is a trend that will continue shaping the health insurance market going forward.

Impact on Opportunities

The trends highlighted above are likely to have varied impact on the entrepreneurial as well as intrapreneurial opportunities identified. For instance, consolidation and new entrants are likely to negatively affect the entrepreneurial opportunity selected in the sense that they will essentially increase the already stiff competition in the health insurance realm. On the other hand, technology is likely to aid the entrepreneurial and intrapreneurial opportunities identified. This is more so the case given that if embraced and implemented well, technology would most likely promote efficiency and give Cigna a competitive advantage as it seeks to roll out other insurance products other than health insurance (entrepreneurial opportunity) and pioneer the coverage of additional CAM services (intrapreneurial opportunity).

Impact on Sustainability

On the sustainability front, the trends identified above would also have a varied impact on the continued performance, competitiveness or longevity of Cigna. If the company is fast in the adoption of the relevant technology, it would be able to offer better services to its clients effectively ensuring that it is successful in the long-term. On the other hand, new entrants are likely to complicate the operations of the enterprise because the entry of new players eats into the incumbents market share. However, the company could combine forces (via consolidations) with other players in the industry so as to integrate processes and systems a move that would help…