A strategic study of Colonial Mutual Group

• Main Author: Encarnacion, Dennis N.
• Format: text
• Language: English
• Published: Animo Repository 1998
• Subjects: Business Administration, Management, and Operations
• Online Access: https://animorepository.dlsu.edu.ph/etd_masteral/2143
• Institution: De La Salle University

CMG came to be in 1965 as a life insurance company called Lincoln Philippines Life. Since then the company face challenges and took the opportunities in the market as it transforms itself into a leading financial services company in the Philippines. CMG is one of the top 500 corporations in the Philippines. CMG has been among the top 25% of investment performers and one of the only four companies who have been in the top ten consistently for the last five years. Moreover, CMG offers market-responsive life insurance and pre-need packages. These are presently two companies under CMG: CMG Life Insurance Co., Inc. and CMG Plans, Inc. Though, they are structured as two distinct corporations, the company is recognized and being operated as one major company, namely CMG. After an intensive study of the insurance industry and the performance of CMG, the corporation should continue to adopt differentiation strategy by providing the people values through innovative products and services in the market. This is brought about by intense competition due to the liberalization of the insurance industry in the country and with the encouragement of the government to increase the number of Filipinos with life insurance from 12% of the population to 20%. Moreover, the expected 8% annual average growth of the Philippine economy in the next five years will contribute to the rapid growth of the industry. As more consumers become more capable to afford life insurance policies, there will be less pressure for firms to eat up into each others market share. Insurance companies can thus improve operating results by merely keeping up with the industrys growth. Policyholders will ultimately benefit from the competition in the industry. Existing insurance firms, and its new entrants in the industry, will be compelled to introduce more innovative products and services. The success of insurance companies depends on delivering value to the customers. As more products choices appear in the marketplace, and expansion of distribution channels, perceptions of value shift and evolve. This strategies Plan of CMG shall focus on the corporate strategy and the functional strategies. The corporate strategy shall be based on the strengths and weakness, internal to the company, and the opportunities and threats, externally. The four recommended corporate strategies be: Introduce new products and services and repackage existing ones. •Create a need to upgrade the policies of the existing policyholders. •Strengthen its Sales Force. Improve distribution channels and services through IT resources. Moreover, the competitive advantage of CMG, is it integrated financial services strategy. This means a client with multiple policies with CMG can access information needed in just one platform. This would strengthen the position of CMG in the market. The basis for the strategies and competitive advantage where derived with the use of several framework. Where one it shall be discussed to give the reader an idea of its simplicity and importance in the formulation of strategies and competitive advantage in the market. After all, strategies and competitive advantage are means to achieve the objectives.