Strategic Responses to Changing Business Environment by Ga Insurance Limited in Kenya

Abstract

Companies require strategic thinking and only by evolving good business strategies can they become strategically competitive (Ansoff and McDonnell 2009). Thomas and Wheelen (2002) stressed that strategy management is applied for the purposes of moulding, directing and relating an organization effectively to its environment. Organizations face significant constraints and contingencies from their external environment and their competitiveness depends on their ability to monitor the environments and adapt their strategies accordingly. Despite the level of knowledge generated regarding the structure and dynamics of organizations, there remains little appreciation about how managers perceive their competitive environment and the impact of managerial cognitions on industry dynamics. Organizations require guidance on the most effective functional areas in which to invest in order to improve and sustain environmental performance. Organizations large and small are environment-dependent. No organization can exist without the environment. They depend on the environment for their survival and they have to scan the environment in an effort to spot budding trends and conditions that could eventually affect the industry and adapt to them (Thompson and Strickland, 2003). Failure to do this will lead to serious strategic problem characterized by the maladjustment of the organization’s performance growth (Ansoff and McDonnell, 2000). The insurance industry has been under intense pressure to change for the last few years. In addition, insurers have been troubled by an extensive crisis of confidence regarding financial markets since financial crisis in 2008. The industry had to deal with noticeable changes in client behavior. Thus, the changing framework conditions confront insurers with increasing strategic challenges and require a conceptual strength of strategy. The research objective of this study was to establish the strategic response to changing business environment by GA insurance limited in Kenya. This research was conducted through a case study. The study used secondary data. Primary data was collected using an interview guide which was administered to 10 Managers at GA Insurance Limited as the respondents who includes the human resource, finance, reinsurance and facultative, business development, legal, medical, risk and compliance, internal audit claims and ICT. The qualitative data collected was analyzed using content analysis technique. From the findings, there has been a lot of competition amongst industry players and the dynamic business environment means that for a company to do well financially, they had to outdo their rivals. From the findings, there is evidence of an existing management committee which reviews response strategies on monthly basis. From the findings, GA Insurance Limited considers competition from other players in the industry while formulating business strategies. In line with the findings the following conclusions are drawn; Financial implications is a major consideration while formulating and implementing the choice of strategies adopted by GA Insurance Limited while financial resources are determinant in implementation of response strategies. The study also recommends that all the stakeholders in the insurance industry should incorporate the findings of this study, especially on strategic response to changing business environment.