| dc.description.abstract | This study focused on the strategic role of core competencies on competitive advantage as
applied by CIC General Insurance Company in Kenya. CIC General Insurance Company
Limited can be used as a case study in successful turn-around strategy. In 2005, the company
was among the bottom ten companies in the insurance industry in terms of market share and
profitability. Despite advice from consultants that it was impossible to become self-sustaining
without selling its stake to another company, CIC General was able to shift to be the top
company in offering General Insurance by 2012. This rapid change of fortunes in a short
period of time was down to the company focusing on the advantages it had in the industry
and banking on them. The researcher was curious to find out on what advantages the
company had that enable this rapid turn-around. The first step was to identify what the
company considered to be core competencies. The second step was to find out whether the
identified core competencies are used by CIC General Insurance to gain or achieve a
competitive advantage. CIC General Insurance is the top general insurance provider in terms
of market share and premium income. This is a sharp contrast from 5 years ago when it was
among the bottom companies in the insurance industry. A number of international and local
studies had been done to try and find out the link between core competencies and competitive
advantage. These researches however did not focus on the use of distribution channels as a
core competency. This research gap formed the basis of the research. The implication of this
study was to aid in managerial policies and decision making as they can look at distribution
channels as a key method of competitive advantage. The research was anchored in two main
theories, namely resource based theory and competitive advantage theory. The resource based
theory was crucial as it states that a company can utilise its inward resources and capabilities
in a manner that enables it to have an edge over its competitors. The competitive advantage
theory was important as it stated the manners in which an organisation was able to gain an
edge over its competitors. These two theories informed what the researcher was trying to find
out. The study was conducted using a case study analysis of the company. Data was collected
through interview guides to the key managers in charge of strategy and cooperative societies
account management as well as through secondary data collected through the company’s
financial statements and data on the company’s website. Data analysis was done using
content analysis where qualitative data was coded and converted into quantitative data for
tabulation and analysis. The study concluded that CIC General Insurance was able to utilise
its key core competence of being linked to the S.A.C.C.O.s to gain an upper hand in gaining
an extended reach to its customers. The cooperative movement is used by the company to
market and distribute its wide range of products to their large number of members. Due to the
high interest rates in the country, S.A.C.C.O.s have gained popularity and tend to recruit a lot
of members. Organisations are also forming company based S.A.C.CO.s for their employees.
Since CIC General Insurance is the only cooperative insurer in Kenya, this becomes a key
attribute that gives them an edge over its competitors. The core competencies were divided
into three, namely, market access competencies, functionality based competencies and
integrity based competencies. CIC General has been able to leverage on the first two to gain
an upper hand. Michael Porter listed a differentiation strategy as a way of gaining
competitive advantage on rivals. CIC General Insurance has utilised this strategy as it has a
unique distribution channel that cannot be imitated by competitors. The study therefore
concluded that by finding its core competency and leveraging on it, then it becomes possible
for a company to gain sustainable competitive advantage. | en_US |
