Introduction This part of the paper will analyse the external environment of HK insurance market through the use of PESTEL and Five Forces Analysis. PESTEL Analysis It can be noted that the HK Insurance market has always been dependent on international business climate as well as its product cycles. Consequently, the HK Insurance market has been deliberated as one of the growing industries throughout the years. The following figure shows the analysis of the political, economical, socio-cultural and technological, legal and environmental attributes and determinants affecting HK Insurance market. Figure 1 PESTLE Analysis
Political| Economical| Socio-Cultural| * Taxation Policy of Hong Kong * Foreign trade Regulations * Political status and condition of Hong Kong and the global market| * Product life cycles * Business Cycles * Rate of unempoyment * Disposable income| * Lifestyle of the target market * Income distribution * Cultural diversity| Technological| Legal| Environmental| * Rapid transition in technology * Speed of technological transfer| * Laws and regulations about that covers apparel industries * Following regulations in the foreign trade| * Awareness of environmental protection * Existence of Green Products|
One of the political determinants that affect HK Insurance market is the diverse taxations which surrounds Hong Kong market which lead to re-imports. In this regard, the vehicles are being bought overseas, re-imported to the locale market which influence the price of the product. In the period of economical issues, clients do not substitute their financial and insurance products and services offerings. On one hand, there are some insurance firms which are common in the market environment which expresses a new way of providing their services to their clients.
In line with technological determinants, HK Insurance market nowadays is being quiker in line with the business standards as well as considers information system for data records management. In addition, so as to cope with the environmental determinants, further consolidation of the HK Insurance market is expected and consideration of insurance products must be given emphasis. Aside from PESTLE analysis, the HK Insurance market will also be analysed through the consideration of Porter’s five Forces model. 1.
Suppliers. In the case of the insuranceindustry, speficifically in the current objectives and plans of HK Insurance market, decision-makers of the corporation must have a clear comprehenson of the business dynamics in which employees are directly involved in. Such consider the employees’ concentration or and core corporate interests, diversity of the products as well as the designs being offered as well as the alternative resources that are accessible for the HK Insurance market in terms of business partnerships.
Hence, it is most proper to build win–win relationships with employees or have an agreement on the use of multiple employees in array to protect the interests of both ends. 2. Power of BuyersThe power of clients/buyer s describes the implicate clients/buyer s/buyer ss have on an industry. When buyer power is robust, the relationship to the producing industry becomes closer tomarket conditions wherein the buyer has the most influence in shaping the price.
In this regard, the insurance company should be able to provide the need of their clients specifically in lique with information system. 3. New Entrants and Barriers of Entry. The plausibility of new corporations entering the industry influences the pace of the industrial competition. Therefore, the key is to analyse the entry technique as well as exit approach of the new player to the HK Insurance market. Although any corporation must be able to enter and exit the sector, each industry presents diverse degrees of complexity influenced by economics.
In terms of insurance market. 4. Substitutes. “Substitute products” as those that is accessible in other industries that meet an identical or similar demand for the end user. As more substitutes become obtainable as well as price affordable, the demand becomes more elastic since clients/buyer s/buyer ss have more optonss. The threat of substitutes often implicates price-based competition since substitute products may restrict the capability of corporations within an industry to raise prices and improve margins. 5. Industry Competitors.
A considerable number of corporations have developed into an essential part of the period of global competition, increasing enhancement, enhanced corporate paradigms, and corporate restructure. The continuous transition from the conventional corporate framework with its hierarchical corporations to a worldwide, knowledge-founded financial system as well as intelligent corporations demands business management to realign and relocate its techniques (Oliver, 1997). Along with the intense marketing nowadays, corporations are faced with the challenge to sustain their own competitive edge so as to survive and be successful.
Techniques and marketing tactics are carefully planned and executed to gain the ultimate goal of all: corporation growth (Porter, 1990). Among the HK Insurance market player the management of each company should be able to sustain their competencies. Reference Oliver, C 1997, “Sustainable competitive advantage: Combining institutional and resource-Based views. ” Strategic Management Journal18(9): 697-713. Porter, ME, 1980, Competitive Strategy: Techniques for Analyzing Industries and Competitors, Free Press, New York.