Strategies Employed by Co-operative Insurance Company (Cic) Insurance Group Limited for Competitive Advantage in the Micro Insurance Industry in Kenya

Abstract

The environment in which businesses operate faces stiff competition due to the existence of other firms producing and/or selling the same products or services. The aim of every organization in such a competitive environment is to outsmart the competition leading to development of competitive advantage. Competitive advantage was considered as the prolonged benefit of implementing some unique combination of internal capabilities and external advantages that differentiate between competitive and non-competitive industry play. This study set out to address two main objectives which were to determine the challenges that CIC Insurance Group was facing from competition and to establish the strategies being adopted to gain competitive advantage in the micro insurance industry in Kenya. In order to address the objectives, the study utilized a case study design in which an interview guide was used on 5 senior managers in the life division. Qualitative analysis on the data was done using content analysis. The study found out that the main challenges being faced by CIC are capital requirement for distribution, product development and technology that create the threat of entry. Other challenges identified were cannibalistic competition arising from the many players in the industry offering the same product to a small size of market and duplication of product leading to threat of substitution. Findings also found out that CIC was adopting market development, differentiation and market development strategies in order to gain competitive advantage in the micro insurance industry. This study could be of great significant interest to the micro insurance industry and could generate information that can be used in policy formulation and development of the micro insurance industry. It will also be of importance to other insurance providers as micro insurance is a new phenomenon and going through a lot of trial and learnings. Based on the study, the study concluded that for an organization to survive in a competitive environment, it must adopt strategies to gain competitive advantage.