Cigna Corporation is a private company operating in the health service industry providing health-related products and services such as insurance, supplemental benefits, and healthcare globally. Cigna corporation headquarter is based in Bloomfield, Connecticut in the US (Bloomberg, 2018). Cigna has enjoyed a progressive growth in revenue year after year leading to its growth and diversification to become a renowned health services provider globally. Therefore, a look at Cigna’s Corporation internal structure and the competitive nature of its industry sheds light on Cigna’s performance and competitive position in the industry as well as the possibilities that its internal environment has created for the company in the industry.
Internal Environment: Strengths, and Weaknesses of the Organization
Internally, Cigna measures its success through its profitability. Cigna has in place cost reduction strategies to reconfigure their operations. Cigna corporations have improved operations by redesigning their life, health and employee benefits. The Corporation also utilizes mergers and acquisitions for the provision of individual life and health benefits so as to enable it to focus on emerging markets. The internal environment is characterized by research, innovation and increasing lookout for cost-effective strategies. All the aspects of the internal environment make up the corporation's strengths and weaknesses.
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A number of strengths characterize Cigna's internal environment. For one, Cigna has solid financial strengths with a stable profit margin of over 9% in the last three years, a flat receivables record and a below benchmark equity to debt ratio over the previous ten years(Vourman, Williams & Cha, 2013). Secondly, Cigna corporation has well-developed marketing strategies that form a strong basis for its strengths. Cigna pursues a strong employee benefits package in all its units and boasts of highly skilled and trained sales personnel. Thirdly, Cigna enjoys economies of scale due to its large size with a global presence in over 25. Other strengths of Cigna Corporation include a diverse portfolio of products, consumer-directed products and emphasis on integration in its approaches (Health Strategies group, 2014).
Cigna Corporation has its weakness that influences its competitive position. However, Cigna demonstrates financial weakness in the overall industry such as lagging behind in terms of growth and profitability in comparison to its competitors. Cigna portrays a more stagnating phenomenon that characterizes its growth curve. The marketing aspects of Cigna present it with weakness such as lack of brand awareness in the market. Nevertheless, the corporation is holding back on acquisitions and mergers which is denying it the opportunities to grow their market share. Also, its vision of providing employee benefits beyond managed care poses a challenge in execution to actually go the extra mile. Cigna also has a lower market share, minimal business with the government and dependence on ASO Transactions (Health Strategies Group, 2014).
Vital Internal Factors in the General Industry and External Analysis
The healthcare sector requires the consideration of some basic essential internal factors for companies to ensure sustenance and thrive in the industry. The vital internal elements in the general healthcare industry are quality, affordability of products, equality in health care provision, accessibility, innovation, and stewardship. Every company in the healthcare provision business should place emphasis on the quality of services they offer. Quality care is the greatest factor consideration when it comes to healthcare. Quality care entails ensuring high-end delivery of healthcare through quality service and quality products. Affordability of healthcare products is an essential internal consideration for companies. Companies pursue the provision of high-quality, affordable products to remain competitive in the market. Innovation is also becoming a primary consideration in the healthcare sector. Therefore, companies need to internally pursue innovative approaches to health care to give them a competitive position in the industry (Griffith & MacGrillivray, n.d). Other vital internal factors include employee benefits, financial strategy, and marketing strategies to enhance the competitive position in the external markets. Quality and affordability place the company in a better position to compete with other companies in the industry. Quality also enhances brand recognition in the marketplace as quality products identify the company with the customers. Innovation gives the company a competitive advantage in the external environment as it takes front row in the development of efficient products. Innovation allows the company to stay ahead in the market by being first in line to develop new and more effective products.
Competitor Analysis
The healthcare services industry in the US and globally is characterized by several thriving and well-established companies making the industry highly competitive. The global healthcare industry is defined by the type of services, function, application, target group and regional coverage. The more an organization can diversify its services to fit in as many classes as possible, the more successful it becomes. Competitors pursue expansion beyond borders and diversification of services to achieve growth and attain profitability in the highly competitive market (Smith, 2018). The healthcare industry is characterized by a stiff competition from large corporation such as MetLife Insurance Company and Prudential insurance company. Prudential Insurance ranks among the top life insurance providers globally, with desirable employee benefits and financial allowances. MetLife also ranks highly in the global provider for health services with an asset base worth billions and competitive employee benefits packages, allowance and reputable asset management as well as a presence in over 40 countries worldwide (MetLife, n.d). Strong and well-established competitors such as MetLife and prudential raise the bar for Cigna Corporation in terms of market domination, growth and profitability. Prudential products are well established in the market with high brand recognition and loyalty. The industry is highly characterized by customer stealing since it is a mature well-developed industry. Therefore, Cigna has a difficult time marketing its products and drawing customers to gain a market share and establish its brand
Organization structure and performance
Cigna Corporation is a global healthcare service provider with a global network in over 190 countries. The company as an employee base of over 45.000 personnel and 95 million customers across the globe. Cigna’s mission is to offer better human welfare and health security for the people. The organization structure is constituted of well-differentiated strengths such as affordability and strategic executions that drive its transactions. Performance wise Cigna as a strong track record in a highly competitive, rapidly growing and developed industry. The strong performance is evident in its yearly increase in total revenue and growing earnings per share. In the last 8 years, the total revenue growth rate is 11% while per-share earnings increase at 13%. As at 2017, Cigna recorded after-tax margins of 6.1% and a 14 % increase in returns on capital which signifies that the company is performing well in the industry. Cigna has also a well-advanced strategy for improving customer value which expands its growth and performance margins (Cigna, 2018).
Cigna’s Competitive Position and Possibilities
Cigna’s competitive advantage lies in its core competencies and strengths. Firstly, Cigna has an integrated marketing and research approach in the search for data, communication approaches, and research. Cigna uses actual collected and analyzed data from the market to develop its marketing approaches. Cigna as well developed feedback channels and applications for efficiency in data collection and responses from its employees and customers. The strategies acquisitions made by Cigna allow the corporation to make potential acquisitions which give them a competitive advantage and open its possibilities in the marketplace (Vourman, Williams & Cha, 2013). For instance, Cigna’s acquisition of Health springs will go a long way in helping the company enter the Medicare market.
The financial position of Cigna also positions the company highly competitively. With a financial capacity to service its debt and a high receivables response rate, the company is in a good position to maintain its operations to compete at higher levels in the market and increase its growth and profitability margins to the levels of its competitors. In conclusion, Cigna Corporation is well placed to remain sustainable in the health services provider list and has opportunities to utilize its core competencies to grow and achieve greater profits.
References
Bloomberg. (2018). Company overview of Cigna Corporation . Retrieved on 5 September 2018 from https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=172899
Cigna. (2018). Cigna Corporation investor’s presentation . Retrieved on 5 September 2018 from https://www.cigna.com/assets/docs/about-cigna/Investor%20Relations/cigna-corp-investor-presentation.pdf
Griffith, K &MacGillivray, A. (n.d). Evaluating the impact of private providers on health and health systems. Institute of Global Health Innovation, Imperial College London . Retrieved on 5 September 2018 from https://www.imperial.ac.uk/media/imperial-college/institute-of-global-health-innovation/centre-for-health-policy/public/IMPJ5551-Health-Report-Update-Final-Web.pdf
Health Strategies Group. (2014). Leading health plans: key strengths and weaknesses . Retrieved on 5 September 2018 from https://www.healthstrategies.com/blog/leading-health-plans-key-strengths-and-weaknesses
MetLife. (n.d). Company overview . Retrieved 0n 5 September w2018 from http://investor.metlife.com/phoenix.zhtml?c=121171&p=irol-homeprofile
Smith, H. (2018). Global connected healthcare market size, trends, industry analysis, outlook & forecast 2016-2024. ECHAlliance Global Connector . Retrieved on 5 September 2018 from https://echalliance.com/news/392043/Global-Connected-Healthcare-Market-Size-Trends-Industry-Analysis-Outlook--Forecast-2016-2024.htm
Vourman, I. Williams, C. & Cha, A. (2013) Cigna strategy report. Bridges Consulting . Retrieved on 5 September 2018 from http://economics-files.pomona.edu/jlikens/SeniorSeminars/Likens2013/reports/cigna.pdf
