Strategic Management paper help
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r_paper.docxRUNNING HEAD: STRATEGIC PLAN PART 1: NEW SERVICE 1
STRATEGIC PLAN PART 1: NEW SERVICE 2
Strategic Plan Part 1: New Service
BUS/475
October 10, 2016
Table of Contents
I. Strategic Planning Effectiveness ………………………………………………….
II. The Hanover Group …………………………………………………….................
III. Mission, Vision, and Values ……………………………………………………….
IV. New Service ……………………………………………………………………….
a. Mission, Vision, and Values ………………………………………………
V. Competitive Advantage ……………………………………………………………
VI. Strategic Direction ………………………………………………………………...
VII. Guiding Principles ………………………………………………………………...
Strategic Plan Part 1: New Service
Strategic planning is a fundamental necessity that guides a company to gain a competitive advantage in the marketplace. Mission, vision, and values are considered throughout the process since they have a significant influence on the strategic goals of a company in making strategic decisions. As such, it is valuable to form a mission and vision statement that serves as a foundation for effectiveness made by management. The strategic plan will evolve around a new service for The Hanover Group which the mission, vision, and values will be evaluated to align with the new service to capitalize on competitive advantages and strategic direction to ensure innovation and growth in the future of the company.
The Hanover Group
The Hanover Insurance Group provides a broad range of property and casualty products and services to individuals, families, and businesses by partnering with independent agents which together constitute one of the largest insurance companies in the United States (The Hanover Insurance Group, 2016). For more than 160 years The Hanover has provided excellent ratings and has met obligations to its partners and customers in 179 countries.
Financially, The Hanover has increased substantially. In the annual report provided at the end of December 2015, our net income from 2014 to 2015 increased 18% to $332 million. Our success is based on our winning product mix. The company has returned $1 billion to shareholders in dividends and stock purchases and has increased its book value per share by more than 80 percent. The success is pertinent with the company generating 11 percent in operating ROE and growing.
The Hanover continues to grow and is great financial sustainability. “The Hanover has identified and taken advantage of promising growth opportunities, leveraging our deep agency partnerships, in-depth market knowledge, and broad product portfolios.” (Fred Eppinger, 2015) Now, with the release of the expansion of comprehensive coverage to small business owners we have created “industry-leading expanded equipment breakdown coverage" to address the evolving technology risks they face. What is next?
Mission Statement
A mission statement is the focus of the company; it specifies why the company is doing what they are doing. The mission is meant for employees and management to understand the objective of the company. It will help determine if the strategic plan aligns with the overall goal of the business.
The Hanover mission states:
“The Hanover is committed to making a difference, in its business and in the communities it calls home. For generations, our company and our employees have worked together to make the communities where we live and work healthier, stronger, and more vibrant.” (The Hanover Inc, 2016)
Vision Statement
Having a vision correlates to core values, passion, having a purpose, and where you are trying to go. In a survey of twenty executives from different countries, ninety-eight percent said a “strong sense of vision” was the most important trait of leadership (Dess, Lumpkin, Eisner, & McNamara, 2014). For these reasons, having a clear vision is essential to the strategic planning process. “Vision statements give direction for employee behavior and helps provide inspiration.” (Hawthorne, 2016)
For The Hanover, the current vision relies on our seven core skills as follows:
· Superior Local Market Management;
· Outstanding Agency and Customer Service;
· Aggressive Talent Development;
· Exceptional Underwriting;
· Effective and Efficient Claims Service;
· Timely Delivery of Technology Improvements; and
· Disciplined Performance Management.
Thus, the vision is by “executing strategic priorities in a consistent and continually improving way, we must have outstanding capabilities in seven critical areas. Delivering these core skills will make our market offerings distinctive”. (The Hanover Insurance Group, 2016)
Values
The mission and vision provide a fundamental statement of the organization's values, aspirations, and goals. However, the core values determine how a company is going to go about fulfilling the mission and vision statements by delineating the guiding principles of the business and how employees and management should behave and interact since they are acting representatives.
The Hanover focuses on five core values:
· Integrity and Honesty;
· Teamwork and Collaboration;
· Accountability for Results;
· Commitment to Winning; and
· Meritocracy.
Each core value is distinctive to the progression of the company as stated by The Hanover, our strategic priorities and core skills keep us focused, but our values are what make our company unique; our values drive the behavior that allows us to move quickly and to enjoy our journey together.
New Service
Innovation does not necessarily mean introducing a new and improved product, or service. It is reaching "strategic space that competitors cannot, allowing a company to provide a product at a price or performance level competitors cannot match." (Mills & Tubiana, 2013). Therefore, innovation is not a mark of failure, but a gamble in which executives recognize reality to see how it would affect the business. The Hanover is seeking to take a chance in the pet industry by providing insurance for pets.
Pet products and services is a rapidly growing market boosting innovation and growth. According to American Pet Products Association (APPA, 2016), in 2015, $60.28 billion was spent on pets in the United States alone. Of the total, $29.7 billion was vet care and medicine, with an estimated continued increase in 2016 which is consistent with the number of pets owned: 77.8 dogs and 85.8 million cats, not including other types of animals. These are outstanding numbers to pursue in adding an aggressive pet policy targeting our current policyholders, agents, employees and potential clients.
Mission, Vision, and Values
Any successful change involves communication. Management should continue to inform employees of the current mission and vision statements and highlight on the strengths of the strategic plans for a new division group. The repetitive remarks on the statements will help employees to feel invested and stay motived, thus, increasing levels of productivity. The current statements are subject to change, but we are only aligning the pet policy to our current goals.
The new division’s mission will focus on helping more pet owners have access to reliable and affordable pet insurance plans to provide the best possible veterinary care for their pets. The vision is to help more pets get the care they need by continuously improving our plan and services to prevent animal cruelty and promote a better, easy life between the pets and their owners.
The business model for the new pet division aligns with our current mission and statement because we are still maintaining our commitment to where we live and work healthier, stronger, and more vibrant. By adding the pet insurance services, we are further extending our commitment to cover a wider range in providing a safe environment when pets are well-provided for.
Competitive Advantage
The Hanover’s companies and employees have a strong tradition of connecting with nonprofit agencies and their dedicated volunteers, as well as with local and state leaders and other partners.
“We invest in significant resources to attract and retain the best personnel in the industry. We partner with the best independent agents and brokers in the market to provide them a growing portfolio and innovative producers, local underwriting expertise, and unparalleled service to help meet customers' needs in business and at home.” (The Hanover Inc, 2016)
As the largest insurance businesses in the United States, we have an advantage where our current clients, across the board, would be eager to add a pet policy with an already trusted and committed insurance company adhering to our core values.
Bundling policies to include the pet insurance will only benefit the stakeholders. Current customers would be able to ensure their pets without a medical review requirement as long as the pets are registered. Existing policyholders will have an advantage in special offers, discounts, and a flat premium rate as loyal owners.
Strategic Direction
Again, clear communication of the mission, vision, and core values is essential to implement the strategic plan. By researching the target market segments, such as demographic, psychographic, geographic and identifying behavioral factors in the pet industry, we can quickly identify trends, purchase habits and the gross consumer product within the industry. The research provided will allow management and executives to make strategic decisions about our core values to flourish within the new division. The pet insurance is a market with lots of room to grow. We want to anticipate the advances and provide a clear direction as to the policies and premiums and the animals that will be covered. Training of employees and community involvement will help keep the focus on the objective of this new service and its potential growth.
Guiding Principles
The success of a business is dependent on maintaining a strong, positive reputation for promoting increase sales. Culture, social responsibility, and ethics are reflected in our core values. The guidelines to adhere to consist of excellent customer satisfaction to maintain a loyal consumer base and embracing diversity in our workplace and business practice can increase adaptability, have a broader service range, a variety of viewpoints and more efficient execution (Greenburg, 2014). Social responsibility can cause an uproar in the industry. To achieve best practices with The Hanover Group will focus on stakeholders by paying claims efficiently, minimizing risk and loss control and recognize human and animal rights.
Conclusion
Mission, vision, and values are essential in the strategic planning process in providing a framework towards a comprehensive strategic plan to achieve business success. The statements will ensure the employees and management will lead to the new pet insurance division in having a clear understanding of the overall objective of the strategic goals. The contents of the plan will aid in the growth, increase value, and competitive advantage within the industry.
Works Cited APPA. (2016). Pet industry market size & ownership statistics. Retrieved from American pet products association: http://www.americanpetproducts.org/press_industrytrends.asp Dess, Lumpkin, Eisner, & McNamara. (2014). Strategic Management, seventh edition. New York: McGraw-Hill Education. Fred Eppinger, C. (2015, December). Annual report. Retrieved from The Hanover Insurance group: chrome-extension://oemmndcbldboiebfnladdacbdfmadadm/http://www.snl.com/Cache/1500083394.PDF?O=PDF&T=&Y=&D=&FID=1500083394&iid=103541 Greenburg, J. (2014). Diversity in the workplace. Retrieved from The multicultural advantage: http://www.multiculturaladvantage.com/recruit/diversity/diversity-in-the-workplace-benefits-challenges-solutions.asp Hawthorne, M. (2016). The purpose of mission and vision statements in strategic planning. Retrieved from Small business: http://smallbusiness.chron.com/purpose-mission-vision-statements-strategic-planning-13161.html Mills, H., & Tubiana, B. (2013, March 15). Innovation in insurance: the path to progress. Retrieved from Deloitte University Press: http://dupress.deloitte.com/dup-us-en/topics/innovation/innovation-in-insurance.html The Hanover Inc. (2016). About the Hanover. Retrieved from The Hanover Insurance group: http://www.hanover.com/about.html The Hanover Insurance Group. (2016). About the hangover. Retrieved from The Hanover Insurance group: http://www.hanover.com/about.html The Hanover Insurance Group. (2016). Core skills. Retrieved from The Hanover Insurance Group: http://www.hanover.com/about-core-skills.html
