Response Strategies Adopted By Co-Operative Insurance Company (Cic) Group Limited To Changes In The External Environment

Abstract

The environment in which businesses operate is constantly changing with different factors affecting firms operation. The insurance industry has had its fair share of volatile, unpredictable and competitive environment and has grown over the years. Environmental factors if not contained can affect the profitability of an organization and the dynamic environmental factors has driven businesses within the insurance industry to continuously innovate and come up with prudent response strategies to deal with the environmental changes. The study is anchored upon dynamic capability theory, open systems theory and the contingency theory. The objective of the study was to identify the response strategies adopted by CIC Insurance Group Limited to changes in the external environment. The research design was a case study of CIC and the primary data was collected through interviewing two top level managers who are considered to be owners of the strategic information while the secondary data was collected from CIC’s management reports, financial reports and the strategic plans. The study found that the technological changes, economic occurrences, socio-cultural changes, political and legislative factors affected the operations of CIC Insurance. The study found that CIC responded to environmental changes through cost leadership, focus marketing, differentiation, diversification, collaboration, product development and market development strategies. The issues arising from implementing some of the strategies include duplication of products by competitors and rigid pricing policies by the regulator. The limitations of this study were confidentiality of the respondents in answering some of the questions and the nature of the research design being a case study meant that the findings cannot be used as a representation of companies in the insurance industry. The researcher recommends that the management continuously focus on strategies that will deliver a better competitive position for the firm. The industry regulator should rationalize ICT policies that will enable growth within the insurance industry. The researcher also recommends that CIC management conduct an integrity appraisal amongst its employees to eliminate fraud issues