Question

Analyze the competitive environment for Aetna insurance company to determine the corporations most significant competitor. Compare their strategies at each level and evaluate which company you think is most likely to be successful in the long-term. Justify your choice.

Answer 1

Competitive environment analysis of Aetna Insurance Company has consisted of five competitive environmental factors. Five competitive environmental factors of Aetna Insurance are threats from new entrants, suppliers bargaining power, buyers bargaining power, threats from substitutes and rivalry among existing competitors.

• Threats from new entrants: New market entrants are providing several new and innovative health insurance plans. These plans include low price strategy, additional benefit, cost reduction, and value propositions. Aetna Insurance Company handles these competitors by bringing innovativeness in its existing products, building a strong economic scale and developing capacities to spend more money to analyze competitive strengths. On the contrary, Aflac incorporated handles new entrant threats by building a product development strategy and service differentiation strategy. However, Anthem Inc handles new entrant threats by implementing a strong market analysis.
• Suppliers bargaining power: Aetna insurance has numerous suppliers around the USA. A dominant position of suppliers reduces the potentials of organizations. Aetna Insurance handles supplier’s dominance by developing effective supply chain management, experimenting with new product designs from different suppliers and developing a dedicated supplier’s base. On the contrary, Aflac incorporated handles suppliers bargaining power by generating a large number of suppliers. However, Anthem Inc manages suppliers bargaining power by developing effective communication with suppliers.
• Bargaining power of buyers: Buyers of Aetna Insurance are often demanding. They want more attractive insurance packages with nominal monthly rentals. This organization manages the bargaining power of consumers by handling a large consumer base, making market analysis to understand the requirements of target consumers and bringing innovative products to attract target consumers. On the contrary, Aflac Incorporated handles buyers bargaining power by maintaining an effective consumer relationship via social media. However, Anthem Inc maintains buyers bargaining power by bringing in different kinds of products.
• Threats from substitutes: substitutional products are a great threat for Aetna Insurance which causes suffering for Aetna Insurance. It handles its substitute’s products by becoming service-oriented, analyzing needs of consumers and expanding consumer base. On the contrary, Aflac incorporated handles buyers manage substitutional threats by developing a diversified range of products. However, Anthem Inc manages substitutes by enhancing its service quality and consumer-driven approaches.
• Rivalry from existing competitors: Rivalry from existing competitors is based on competitive threats from existing competitors. Existing competitors are Aflac Incorporated and Anthem Inc. Aetna Insurance handles its competitors by developing a product differentiation strategy, building performance management scale and collaborating with competitors. Aflac Incorporated manages competitors by properly analyzing its target market and aligning product quality and price. However, Anthem Inc manages competitors by collaborating all its target competitors.

The aforesaid analysis has made it clear that Aetna Insurance has a more effective strategy than its competitors.