Introduction
The Liberty Mutual Insurance Group is a market leader in its field. The firm is an insurance company that provides property and liability coverage (Liberty Mutual Insurance, n.d.). People, families, and companies may get a variety of personal insurance and commercial insurance solutions from the company’s subsidiaries and linked enterprises. It provides land/home owners, commercial multi-peril, properties, commercial car, liability policy, surety, workers compensation, and specialty lines insurance. It sells and advertises items through licensed brokers, staff sales agents, licensed tele sales counselors, captive agents, independent agents, third-party manufacturers, and the internet. The corporation has operations in the Americas, Europe, and Asia Pacific. It is headquartered in Boston, Massachusetts, USA. By critically evaluating and evaluating the SWOT analysis, Liberty Mutual Insurance Group retains its market leadership. SWOT analysis is an extremely interactive process that demands effective partnership between many numerous departments within the company, including advertising, operations, MIS, finance, and strategic planning. Moreover, it helps a company to determine the internal key aspects like -strengths and weaknesses, and or external strategic aspects like – opportunities and threats.
SWOT Table
| Strengths
● Strong distribution network – it has created a dependable distribution network (Linked In, 2020). ● An established track record of effectively merging harmonizing initiatives through mergers and acquisitions. ● Fruitful knowledge and training programs have led to a highly competent staff. |
Weaknesses
● Integration of enterprises with different work cultures have not been very successful. ● When comparing to its rivals, it has not very proficient at approximating product demand, leading to a larger share of lost chances (McGlennon, 2021). ● Because the organizational structure is only steady with the existing business strategy, growth into adjacent product sectors is inadequate. |
| Opportunities
● Customers gained via the web/online channel – The company has spent a noteworthy cash amounts in the internet platform in the last few years. ● After years of economic downturn in the market segment, the economic reflection and upsurge in consumer spending provide a chance for the company to add new customers and increase its market share (Liberty Mutual Insurance, n.d.). ● The government’s green initiative offers a good opportunity for government workers to purchase its products. |
Threats
● Mounting local distributor strength poses a challenge in certain areas, given that competition leads to greater profit margins to distributors. ● A labor scarcity of skilled labor in key international markets threatens Liberty Mutual Insurance Group’s capacity to maintain steady profit growth in such areas (Potvin et al., 2021). ● Imitation of fake and lower-quality products is huge challenge to the firm’s products, particularly in emerging and low-income markets. |
Situational Analysis
Internal Strategic Factors – Strengths
Liberty Mutual, being among the greatest organizations in its area, has a number of characteristics that allow it to flourish in the market. These strengths not only help the firm retain its share of the market in present markets, but also aid it to enter new ones. Among these advantages are: Robust distribution network – Over the years, Liberty Mutual has put in place a solid distribution system that can cover the bulk of its target market (Potvin et al., 2021). Moreover, a track record of effectively joining compatible businesses via acquisitions and mergers. It has fruitfully joined a number of technical businesses in recent years in order to modernize its processes and establish a robust supply chain. Knowledge and training initiatives that have been successful have led to a highly capable workforce. The firm makes significant investments in employee training, leading to staff that is not just well-trained but also determined to succeed.
Internal Strategic Factors – Weaknesses
Liberty Mutual Insurance Group’s weaknesses are parts where it can progress. Strategy is all about generating important choices, and weaknesses are sectors where a corporation may improve by using SWOT analysis to gain a competitive advantage and a strategic position. Integration of businesses with different work environments has not proven particularly successful. As previously indicated, while Liberty Mutual as a firm has been effective in combining small firms, it has also been unsuccessful in integrating enterprises with diverse work cultures. In compared to its competitors, it is less effective at forecasting product demand, leading to a higher percentage of wasted opportunities (Ibis World, 2020). Another reason is that the firm’s days inventory is larger compared to its competitors’ since the firm is not very good at predicting demand, therefore it retains more inventory both in that in channel. Growth into surrounding product areas is constrained since the organizational structure is only compatible with the present company plan.
External Strategic Factors – Opportunities
Customers recruited through the online channel. The firm has invested a substantial money amounts in the internet platforms throughout the previous few years, notably targeting generation z. This investment has given Liberty Mutual with a new marketing channel. In the following years, the company may leverage on this opportunity by better understanding its clients and understanding their wants and needs using big data analytics (McGlennon, 2021). (McGlennon, 2021). After years of economic slump and slow growth in the industry, the economic recovery and a rise in consumer spending present an opportunity for Liberty Mutual to attract new clients and strengthen its market share (Liberty Mutual Insurance, n.d). (Liberty Mutual Insurance, n.d.). The government’s green effort also gives an opportunity for federal and state government contractors to acquire its products.
External Strategic Factors – Threats
Swiftly growing distributor strength provides a difficulty in some regions, because competition pays bigger margins to local suppliers. A skilled labor scarcity in important international markets challenges Liberty Mutual Insurance Group’s capacity to continue steady profit growth in such sectors. Copying of fake and low-quality items also presents a risk to the firm’s product, especially in expanding and low-income areas. Given the different restrictions and continual fluctuations in quality control in those regions, the firm can face lawsuits in multiple marketplaces. In terms of rivalry, Nationwide Insurance, State Farm Insurance, Allstate, Travelers, and AIG are among of Liberty Mutual Insurance’s opponents (Owler, n.d). (Owler, n.d.). In compared to its peers, Liberty Mutual Insurance gets #1 in Overall Culture Score.
Implications
Certain organizational features or aspects can be a strength and a weakness. One of the most main limitations of SWOT analysis is this. For instance, changing environmental standards may be both a risk and an opportunity since it enables the business to remain competitive or acquire an advantage over market entrants if it is able to create items faster than the competition. Given the limits of the highlighted SWOT analysis, corporate leaders choose to allocate weightage to each internal firm strength and vulnerability. The firm can also evaluate the probability of future events happening as well as the extent of their impact on the company’s performance. It is better to doing a basic SWOT analysis since with the Weighted SWOT Analysis, the firms’s leadership may concentrate on the most key factors while discounting the less vital ones. It also resolves the long-list issue, in which businesses construct a long list, however none of the elements are considered relevant.
Conclusion
The SWOT analysis of Liberty Mutual looks at the brand’s strengths, weaknesses, opportunities, and threats. In the firm’s SWOT Analysis, the internal components are the company’s strengths and weaknesses, whereas the external aspects are the firm’s opportunities and threats. SWOT Analysis is a tested management methodology that enables Liberty Mutual to examine its business and results to those of its rivals. In the banking and finance business, Liberty Mutual is a very well name. Liberty Mutual Insurance Group Swot analysis evaluates a firm’s strengths and weaknesses, opportunities, and threats but does make the management to fully comprehend how they will be employed. To get over this restriction and help in the formulation of appropriate approaches, an expanded SWOT analysis is applied. This section contains the Strengths-Opportunities strategies, which include using one’s strengths to exploit opportunities. It describes the Strengths-Threat approaches, which entails utilizing the firm’s own strengths to face dangers. It makes use of the Weaknesses-Opportunities strategies, which entails transforming weaknesses into strengths through the utilization of opportunities. Lastly, Weakness-Threats (WT) strategies involve fixing weaknesses to avert threats.
References
Ibis World. (2020). Finance and Insurance Sector. Ibisworld.com. https://www.ibisworld.com/finance-and-insurance-sector/
Liberty Mutual Insurance. (n.d.). PEOPLE Magazine Recognizes Liberty Mutual Insurance as a Company That Cares | LMG. Www.libertymutualgroup.com. Retrieved February 12, 2022, from https://www.libertymutualgroup.com/about-lm/news/articles/people-magazine-recognizes-liberty-mutual-insurance-company-cares
Linked In. (2020). Liberty Mutual Insurance. https://www.linkedin.com/company/liberty-mutual-insurance
McGlennon, J. (2021). Reimagining Insurance – The Data Agenda – WSJ Podcasts. WSJ. https://www.wsj.com/podcasts/sponsored/the-data-agenda/reimagining-insurance/b3787d32-19c6-4514-b6a8-52ab74f2d95a
Owler. (n.d.). Liberty Mutual Competitors or Alternatives. Owler. https://www.owler.com/company/libertymutualgroup/competitors
Potvin, J. R., Ciriello, V. M., Snook, S. H., Maynard, W. S., & Brogmus, G. E. (2021). The Liberty Mutual manual materials handling (LM-MMH) equations. Ergonomics, 64(8), 955–970. https://doi.org/10.1080/00140139.2021.1891297
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