Assessment of the Strategy used by American International Assurance

Company (AIA) Bermuda Limited in Line with the Competition

among Banking Industries that offers Insurance and Investment
plans.

Chapter 1

PROBLEM AND ITS BACKGROUND

Introduction

Business administration and management characterizes the process of leading and

directing the systems within an organization by exhausting available resources extensively

so as to achieve the objectives of the business operation. It most of the time includes the

conceptualization of business plans and monitoring its execution for assessment and

evaluation of the efficiency and effectiveness of the business transactions. Strategic

management is the process of identifying and enumerating the aims of the organizations in

order to come up with sound business policies and plans from which the profit of the

business organization will be fully maximized ( 1998).

Companies employ detailed business plans and strategies in order to gain several

benefits from its competitors such as increased profits and enhanced customer relations as

company objectives. The application of strategies directed towards the achievement of these

objectives naturally requires the allocation of financial resources. However, while the

company is capable of providing a budget, the outcomes should be able to recover these

allocations in order to prevent capital losses. Thus, the company should employ strategies

and create objectives that are compatible to the capacity of the company and what it intends

to achieve (1999).
 Firms respond to conditions in their marketplaces by modifying their competencies

such as internal capabilities and linkages with suppliers and associates and the ways in

which they position themselves in relation to their competitors specifically their strategic

direction (1999). Each of these components is intricately related and ultimately contributes to

firm competitive advantage. The goal is to deliver maximum value for the least possible total

cost. Examination on the business strategies and plans in order to answer to the demands

of clients and customers through efficient delivery of such needs will not only increase the

profit of an organization but will likewise gain the trust and competence of the clients and

customers. Efficient management of delivery options in a particular company and looking

into the problems encountered in operating the business may enhance the likelihood of a

business corporation to attain its goals as enterprising organization (1990).

Indeed, making a business successful in a particular setting demands crucial and

detailed studies and examination of the factors that will generate the best results that will

serve the aims and objectives of the company. In this light, owners of big business

organizations operating in a competitive business environment should be in constant look

out with its competitors and the overall status and events in the industry. Taking advantage

of the opportunities and intensifying the strengths while minimizing the risks and

weaknesses of a business firm greatly helps in predicting the success in business

enterprise.

Analysing the status, strategies and resources of businesses is very essential as it

allows operators to determine how they will progress in the years to come. This also enables

them to identify their strengths and how they will optimize them. On the other hand, business

analysis also makes operators realize their weak points, allowing them to address them

immediately with effective strategic actions. Conducting a business analysis also helps

organizations to prepare for their future development and growth. Considering that
competition in the business field is continuously growing, implementing efficient strategies

through business analysis is indeed significant for all operators in any industry.

The main objective of this research is to assess the management practices of

American International Assurance Company (AIA) which is based in Hong Kong. The study

shall be divided into five chapters in order to provide clarity and coherence on the discussion

of the topic. The first part of the study will be discussing the problem uncovered by the

researcher and provide ample background on the topic. The chapter shall constitute an

introduction to the whole study, the hypothesis, and the statement of the problem in order to

present the basis of the study. Moreover, the chapter shall also have a discussion on the

scope of its study as well as the significance of the study to society in general and specific

effects on individuals.

The second chapter shall be discussing the relevance of the study in the existing

literature. It shall provide studies on strategic management. After the presentation of the

existing related literature, the researcher shall provide a synthesis of the whole chapter in

relation to the study.

The third part of the study shall be discussing the methods and procedures used in

the study. The chapter shall comprise of the presentation of the utilized techniques for data

collection and research methodology. Similarly, it shall also contain a discussion on the used

techniques in data analysis as well as the tools used to acquire the said data.

The fourth chapter shall be an analysis on the tabulated data. After the said

tabulation, the data are statistically treated in order to uncover the relationship of the variable

involved in the study. With the said data, the chapter seeks to address the statement of the

problem noted in the first chapter.

The last chapter shall comprise of three sections, the summary of the findings, the

conclusions of the study, and the recommendations. With the three portions, the chapter
shall be able to address the verification of the hypothesis stated in the initial chapters of the

study.

Background of the Study

Each organisation is entitled to use the most appropriate strategic management

system approach. Management system is guiding an organisation relative to challenges and

opportunities appearing in the contingent environment. The management system and

strategy of each and every organisation is accountable for the maintenance of the

organisation’s strength and survival in the stiff competition in the world. The role of the

management and the strategy imposed by the organisation as a whole should always be

open minded for the occurrences of changes in order to adjust and cope with the

tremendous development that are happening in the internal and external environment of the

organisation.

This environment is composed of those internal and external elements that most

directly affect organisational goal achievement and new goal development. This

management system can be characterised defined as the art and science of formulating,

implementing and evaluating cross-functional decisions that enables any organisation to

attain its objectives. As this definition entails, management gives emphasis on integrating

management, marketing, finance, production/operations, research and development and

computer information systems to achieve effective organisational performance

In Hong Kong, the existence of banking industries which offers diversified products

such as insurance plans and investment plans. These new services offered by banking

industries affect mostly those insurance industries. One of the insurance industries that may

be affected is the American International Assurance Company (AIA) which is based in Hong

Kong. AIA is an insurance industry that operates through a strong and professional agency
force both in Hong Kong and Macau. The industry offers comprehensive product portfolio

which includes individual life, group life and medical, credit and accident & health insurance

along with a range of financial services. The company’s corporate vision is to be the first

choice of their target market when it comes to insurance planning and other services offered

by the company.

Purpose of the Study

The competition in the banking and insurance industry is very tough. With this, those

who want to outgrow their rival companies must be able to use a strategic management

approach to ensure competitiveness and survival. By and large, the purpose of this research

study is to identify the strategy use by American International Assurance Company (AIA).

The research will specifically identify how the marketing strategy implemented by AIA

enables them to attain stay in the market competition. In addition, this proposes study will

also include the discussion of relevant literature. The outcome of this study will be helpful for

different organisation.

Furthermore, the purpose of the research is to help management students, marketing

managers, and the company to the importance of having an effective management system.

The findings of the study will be able to benefit different organisations in Hong Kong and

other parts of the world. This means that the results of the study will be beneficial to the

business scheme since the research will be able to support previous claims that strategic

management approach can help improved the performance of an organisation and achieved

competitive position. This also suggests that the findings of the research will allow leaders

and organization to integrate strategic management approach as part of their operations.

Research Objective:
 The main goal of this study is to assess the strategy used by the management of

American International Assurance Company (AIA) Bermuda Limited to compete with banking

industries which provides insurance and investment plans. Specifically, the research

attempts to adhere to the following objectives:

1. To know the strategies used by American International Assurance Company

(AIA) Bermuda Limited.

2. To determine the key factors that affect the performance of AIA based in Hong

Kong.

3. To identify the core competencies and capabilities of AIA.

Research Questions

The main goal of this research is to assess the strategy used by American

International Assurance Company (AIA) Bermuda Limited in order to compete in the

insurance and banking industry. Specifically, the research attempts to answer the following

queries:

1. What is the strategy used by American International Assurance Company (AIA)

Bermuda Limited to compete in the banking and insurance industry?

2. What are the factors that affect the performance of AIA based in Hong Kong?

3. What are the core competencies of American International Assurance Company

(AIA) Bermuda Limited?

Scope and Limitation

 This dissertation only covers the strategies use by AIA and the key resources of

American International Assurance Company. . The outcome of this study is limited only to

the data gathered from books and journals about business development and from the

primary data gathered from the result of the questionnaire survey and interview that will be

conducted by the researcher.

Moreover, there are inherent problems in the data due to the small time frame to

conduct the study. Also, the survey process itself could have hindered the collection of

results, particularly with employees that have no time for the research project.

Further, this dissertation will be quantitative and qualitative in nature. The model of

this dissertation will be based on the Input-Process-Output Model; a process is viewed as a

series of boxes which are known as processing elements and connected by inputs and

outputs. Data or information flows through a series of tasks or activities based on a set of

rules or decision points. In IPO model, flow Charts and process diagrams are often used to

present such the process. Basically, what goes in is the input or those data that have an

impact in the process and the output (the result). See Figure 1.1 (Basic IPO Model).

Figure 1.1

Input – Process – Output Model

INPUT

OUTPUT

PROCESS
 The IPO model will show the general structure and guide for the path of the

dissertation. Substituting the variables of this research study on the IPO model, the

researcher came up with the following:

Figure 1.2

Conceptual Framework

Conclusion and Recommendations on the objectives of the dissertation.

INPUT PROCESS OUTPUT

· Qualitative and quantitative data from AIA employees

· Literatures related to the topic (i.e. strategic management, critical success factors)

Assessment and analysis of acquired data through observation, interpretation, and statistical
treatment.

For this research, the study will focus on assessing the strategy of AIA. The study will

give emphasis on identifying the key resources of the company that enable them to stay in
their competitive position. For this study, the research will only have respondents from

employees of AIA.

Chapter 2

Review of Related Literature

Competitive Advantage

According to (2000), the administration and management of a particular business

organization entails full utilization of the resources of the company in order to lead, direct,

and control operations to meet the set objectives. Normally, business administration and

management includes formulating business plans and strategies as well as the continuous

supervision of its implementation so as to evaluate the efficient and effective transaction of

business. However, the success of the operations of the business is likewise dependent on

the assessment of environmental factors both within and outside the organization in order to

find out the means of achieving the goals and objectives of the company. As such, a balance

between the local operations as well as international operations of the company must be

attained as supported by innovations in corporate leadership techniques in the form of

improved quality of information, forms of communication, and technological infrastructures

(2000).

Aside from sound business administration and management through sensitivity to

internal and external environments, modern business organizations are identified at present

as large in scale, highly fragmented and specialized with functions that are much
differentiated. The constant pressure among multinational companies due to unpredictable

economic, social, and political factors that influence business operations result to more

demanding and heavier responsibilities among the members of the management personnel

particularly the executives and board of directors since capital markets and shareholders

require more competitive corporate strategies (1996). As such, (2000) highlighted the need

to create a balance between improved company practices as well as the restructured

objectives through strict appraisal processes that will guarantee organizational success.

(2004) indicated that in highly differentiated industries intense competition results to

more diverse operation systems and processes because the participation among different

sectors within and outside the company is needed to gain more economic advantage.

Assets, skills, and capabilities available to a particular business organization are pooled

together to come up with better business strategies. Multinational companies attend to such

need through the intervention of the corporate parent organization or company head quarter

in the operations of business units called subsidiaries for improved business practices

( 2004). As such companies in highly competitive business industries make it a point to

examine the business practices of their competitors as well as the trends in the market they

cater to. According to (1997) business institutions should be able to maximize its advantages

to outdo competitors as well as provide solutions to the drawbacks experienced in the

company.

Since competition highly dictates the success of companies, business exhaust

means and possibilities to take advantage the available and unexplored opportunities. But

taking advantage of the opportunities available in a particular organization most of the time

fails due to the sole interest and focus of the management on the products and services

offered by the company which in the process neglect other essential aspects of the business

operations. In this regard, (1996) suggested the importance of creating breakthroughs and

investing in innovative business processes. This include the companies’ means of

transacting with customers which will leave positive indelible mark to the reputation of the

organization besting out other companies instead of the traditional focus on how the

products and services are sold and marketed for public consumption (1996).

According to(1999) reformulating the competencies of the companies in terms of

improved internal capabilities and contracts with business partners defines the position of

the business organization relative to the performance of the competitors in order to

strategically respond to market conditions (1999). Undertaking such measure will contribute

to the firm’s competitive advantage based on the objective to crate maximum value at the

least possible cost. Reviewing the business strategies of the company to meet customer

expectations will not only increase the profit of the organization but will likewise gain the trust

of the clientele along with the efficient management of delivery options. Moreover, looking

into the encountered problems in the business operations will also increase the possibility of

the attainment of the corporate goals (1990).

Successful companies are likewise characterized with focus in the midst of the fast-

changing market environments at present. The complex industry conditions and the dynamic

transformations of business practices necessitates the need for companies to specifically

attend to key elements that are crucial to the efficient functioning of the business and

relevant to the existence of the company. These key elements are termed as critical success

factors (CSFs) which define the concentration of the organization to avoid waste of

resources on insignificant external issues of the company (2001). According to (2001) critical

success factors are limited to key areas of the business operations which enable the

company to prosper if satisfactorily achieved, thus contributing to its overall competitive

advantage. As such, it is important for companies to determine these key elements to attain

success in the industry. But these key elements when identified are not applicable to all

business organizations because critical success factors are normally industry-specific in

scope (2001). Hence, identification of relevant issues that serve the existence of the

company should be carefully enumerated and given proper consideration.

(2001) were supported by (1987) who likewise indicated that critical success factors

create competitive strength for business organizations based on the industry they belong to.

According to (1987), there is no existing standard rule of success in any commercial industry

along with the fact that there is no specific procedure in identifying as well as in

implementing successful strategic management planning. This is likewise the principal idea

behind (2001) claim that different companies with similar business structure may undertake

market penetration strategies by formulating different strategic plans to develop critical

success factors or criteria of success that can be generally applied. Moreover, the

identification of critical success factors of a particular company can serve as take off point in

developing key business strategies since it takes into consideration the influence of different

environmental aspects that are otherwise beyond the control of the company ( 2001).

The Concept of Strategic Management

Strategic management can be defined as the art and science of formulating,

implementing and evaluating cross-functional decisions that enables any organisation to

attain its objectives. As this definition entails, strategic management gives emphasis on

integrating management, marketing, finance, production/operations, research and

development and computer information systems to achieve organisational success. The

term strategic management is also used synonymously with strategic planning (2001).

Strategic management is guiding an organisation relative to challenges and

opportunities appearing in the contingent environment. This environment is composed of

those external elements that most directly affect organisational goal achievement and new

goal development. Thus, organisation system design and management should complement
strategic actions taken for productive subsystems, as well as those providing output delivery

and other support functions for the organisation. To the extent possible, the organisation

bases its actions on strategic planning that, rather than a one-time effort, is an ongoing

process of adaptation of original conceptions of mission, goals, structure, roles, and so forth

relative to environmental dynamics (1992).

Furthermore, due to the existence of competitions within and outside the marketing

arena, it is therefore very significant for a company to establish strategic management and

set a strategic plan for its development and improvement. It is for the reason that the twenty-

first-century realities of globalisation, rapid changes in technology, increasing competition, a

changing workforce, changing market and economic conditions, and developing resource

shortages all increase the complexity of modern management. Whereas strategic planning

was a competitive advantage in the past decade, it is a necessity of global thinking in this

century. Planning strategically is certainly a new requirement in the global business world. In

order to survive the new business challenge, global thinking and practice must permeate all

corporate activities. Successful companies are, of course, the first to consider the global

marketplace as their arena for competition. According to (1999), strategic management has

become a vital part of most, if not all, organisations. “Almost all organisations of any

reasonable size have some kind of strategic planning.” More importantly, strategy

implementation has been heralded as the key to corporate strategic success.

Potential Benefits and Limitations of Strategic Management

Strategic management can contribute significantly to organisational performance;

however, its practice can have limitations. The statement means that although strategic

management can consider as one of the most effective strategy to attain business goals and

to gain an efficient organisational performances and functions, its practice can also have
restrictions and limitations because of different factors that might affects the overall

implementation of strategic management within a company. As mentioned, the whole

concept of strategic management encompasses potential benefits and limitations.

Historically, the principal benefit of strategic management has been to help

organisation formulate better strategies through the uses of a more systematic, logical and

rational approach to strategic choice (2003). One of the potential benefits of strategic

management is it make sure that the organisation only follows one direction or path and that

is towards the achievement of its business mission, objectives and success. Through the

used of strategic planning as part of the strategic management concept, the company will be

able to determine the best approach to be used in order to efficiently attain the said goals. In

addition, strategic management is also beneficial in ensuring not only the success of an

organisation but also its survival by adapting the whole organisation to changes in its

environment and making sure that the organisation remains competitive ( 2002).

One of the advantages of strategic management is it enables a firm to proficiently

identify how a certain organisation should deploy its resources in the environment and

adapts the organisation to satisfy the long-term objectives of the firm. It is important to note

that strategic management deals with several time spans. The organisation needs to be

more than just competitive here-and-now. The competition for industry leadership is just as

crucial to firms as is the competition for developing the right competencies in the right time.

Thus, strategic management is also about integrating time horizons and activities related to

all three kinds of competition. This often means finding those issues that should be kept

invariant for the time being and adjusting other activities and issues accordingly (2000).

Although strategic management encompasses many advantages and benefits for the

organisation, strategic management has also some restrictions or limitations. One of the

limitations of strategic management is it may not function well enough for the organisation

without having a good and effective leader to initiate such approach. It is known that
strategic management is a concept of determining and executing the most effective business

approach, however, if the leader of such company do not have what it takes for

implementing effectively the strategic plan formulated, then strategic management will not be

successful as expected.

Strategic management is a process used in an organisation so as to develop

essential goals and resources. It is a combination of impure, mixed and interactive process

loaded with difficulty, both politically and intellectually. Strategic management and human

resource are very much related to each other. Through the combined efforts of these two

practices, several improvements can be attained, however, without an effective human

resources, implementation of strategic management will not be possible (2003). In addition,

strategic management is a three way process (choice, analysis and implement), hence, if

one of the three processes does not meet the company’s expectations, then it will affect

other process which can make the use of strategic management a failure for the

organisation. It is important note, that in order to gain success through strategic

management, the company must be strategic from the very beginning up to the last. When,

one does not become successful, all other functions and operations within the organisation

will be affected; hence can make the business to face its major downturn (2000).

Generic Strategies

Successful strategy requires the firm to choose the markets in which its distinctive

capabilities yield competitive advantage. But the adaptive,

incremental nature of strategy means that the starting-point is where the

firm is now. Strategy is the direction and scope of an organisation over the long term: which

achieves advantage for the organisation through its configuration of resources within a

changing environment, to meet needs of the markets and fulfil stakeholder expectations. The
strategy answers both the questions "where do you want to go?" and "how do you want to

ge there?" but the first question is answered when each industry set the goals and the

second is answered when such industries plan the strategies. The traditional approach

basically focused on the first question but the traditional approach gives equal importance to

both of them. While developing a corporate strategy for the any profit organisation, the

management have to keep in mind the demand of the customers and the marketability of the

products and services offered.

These generic strategies are used by different organisation because of the

potentialities that the management have seen with these strategy and the benefits it may

provide. However, if the company should not strongly commit themselves with these

strategies, like what Southwest Airlines and British Airways have done, then, instead of

achieving competitive advantage within the marketplace, the industry might be at risk of

falling.

These generic strategies are guiding an organisation relative to challenges and

opportunities appearing in the contingent environment. This environment is composed of

those external elements that most directly affect organisational goal achievement and new

goal development. Thus, organisation system design and management should complement

strategic actions taken for productive subsystems, as well as those providing output delivery

and other support functions for the organisation. To the extent possible, the organisation

bases its actions on strategic planning that, rather than a one-time effort, is an ongoing

process of adaptation of original conceptions of mission, goals, structure, roles, and so forth

relative to environmental dynamics. There are five different generic strategies that a

business can choose.

These include cost leadership, differentiation, focused cost leadership and integrated

cost leadership/differentiation. Each generic strategy helps the company to establish and

exploit a competitive advantage within a particular competitive scope ( 2003). By applying

these strengths, three generic strategies are resulted: cost leadership, differentiation and

focus (1997). The strategies used by the company include cost leadership, differentiation

strategy and focused differentiation.

Cost leadership strategy is based upon a business organising and managing its

value-adding activities so as to be the lowest cost producer of a product within an industry

(2002). Cost advantage may achieve in terms of how product or services is designed or in

terms of its quality. Differentiation strategy is based upon persuading customers that a

product is superior to that offered by competitors ( 2002). The value added by the

uniqueness of the product or services may allow the company to charge a premium price for

it. However, the danger associated with differentiation may include imitation by competitors

and changes in customer tastes.

Focus-differentiation strategy is aimed at a segment of the market fro a product rather than

at the whole market or many markets ( 2002). The successful way using focus strategy is to

tailor a broad of product or service development strengths to a relatively narrow market

segment that they know very well. The risk may include imitation and changes in the target

segments.

Experiential Learning Theory

In business strategies, it is important that the management must be able to identify

the needs of the business. In this regard, the adaptive competency approach to needs

analysis is based upon (1984) Experiential Learning Theory (ELT) which allows one to view

the person (employee) and job in commensurate terms. The cornerstone of this approach is

that learning, adaptation, and problem-solving processes are similar and that all jobs involve

each of these processes. Therefore, if one describes both the person's adaptive skills and
job requirements in learning terms, then one can identify and describe the adaptive or

interactive processes that occur in the work setting.

ELT conceptualizes the learning process in such a way that differences in learner

styles and corresponding learning environments can be identified. The application of the

adaptive competency approach accepts the premise that typical needs analysis at the

employee level portrays jobs in one set of terms (i.e., job specifications), and employees are

thought of in another set of terms (person-trait characteristics).

To achieve a commensurate means of assessing business needs at the employee

and job interaction level two critical assumptions underlie the adaptive competency

approach: (1) that the person or employee be viewed as an adult learner, and (2) that the job

context be viewed as a learning environment in which job performance necessitates some

type of cycling through the ELT process (1983).

Using ELT in business strategies, the management will be able to determine the

specific needs of the company based on their learning styles. Through this, the outdoor

development program will ensure that the employees are learning things within their

potentialities and their capacities. Through this also, the company will also be able to identify

which strategies will be suitable for the company.

Key Elements of Strategic Management

Strategic management is the process of specifying an organisation’s objectives,

developing policies and plans to achieve these objectives, and allocating resources so as to

implement the plans. It provides overall direction to the whole enterprise (1999). It can be

"viewed as a set of theories, frameworks designed to explain the factors underlying the

performance of organisations and to assist managers in thinking, planning and acting

strategically" (2002).
 Strategic management can be thought of as having three main elements-strategic

analysis, strategic choice and strategic implementation (See Appendix 2). First, strategic

analysis is concerned with understanding the strategic position of the organisation.

Secondary, strategic choice is the result of strategic analysis, which is to do with the

formulation of possible course of action, their evaluation and the choice between them. Last,

strategic implementation is concentrated on how the choice of strategy can be put into effect

(1997).

Strategic analysis includes developing a vision and mission to be achieved by the

organisation, analysing and identifying an organisation’s external opportunities and threats,

determining the internal position of the company including its strengths and weaknesses and

establishing long-term objectives. Strategic analysis means to know the overall position of

the organisation within and outside the marketing environment. There are many ways in

which a company can be able to analyse the overall position of the organisation internally

and externally.

For the external analysis, an organisation can be analysed through the used of

Porter’s Five Forces Model or Political, Economical, Sociological and Technological (PEST)

Analysis. The major concern of this analysis is to determine and present the level of the

company to be geographically positioned in accordance with the degree of its external

environment. And to be able to strategically analyse the internal position of an organisation,

the management can use SWOT Analysis or Value Chain Analysis. Value chain is the

framework for examining the strengths and weaknesses of an organisation, and for using the

results of this analysis to improve performance.

On the other hand, strategic choice refers to the activity of an organisation which

involves generating alternative strategies and choosing particular strategies to pursue. The

degree of discretion or strategic choice an organisation has will be determined to a large

extent by leadership style, national culture, commitment to past and continuing strategies,
the success of certain symbolic actions, and the nature of its systems and processes (1999).

The perspective of strategic choice reverses the emphasis by concentrating on the

responsibilities of the management teams in shaping the conditions and processes of the

strategic management from both internal and external environment of an organisation. In

addition, strategic action draws upon the social activities and strategic management concept

to improve the view that any managerial actions can influence or affect performance. The

range of strategic actions is very broad. In environmental context, strategic choice

comprises the selection of the product/market realm in which a certain organisation will

engage (2003).

On the other hand, in organisational context, strategic choice involves the selection

of the structures and allocation of the resources to be adopted within the chosen real.

Further, strategic choice also involves activities for selecting the most appropriate strategy to

be used by the organisation to stay competitive and survive in the stiff competition of the

marketplace. Hence, it can be said that strategic choice is one of the crucial element of

strategic management because the success of the implementation of the strategic

management depends on how well and efficient the choice made by the management team.

Lastly, the third key element of strategic management is strategic implementation.

The implementation of business strategies requires an organisation f to establish annual

organisational goals, formulate policies and regulations, motivate employees, and allocate

critical resources so that the established strategies can be executed effectively. Strategic

implementation includes developing a strategy-supportive culture, creating an effective

organisational structure, redirecting marketing efforts, preparing budgets, developing and

utilising information systems and linking employee compensation to organisational

performance.

In addition, strategic implementation is often regarded as the action stage of strategic

management. Implementing the most appropriate strategy means mobilising employees and
managers to put formulated strategies and theories into practice. It is also considered as

one of the most difficult and complex stage in strategic management because it requires

personal discipline, commitment and sacrifice. Successful strategic implementation hinges

upon manager’s ability to motivate employees, which is more an art than science. Strategies

formulated and analysed but not implemented serve no useful purpose (1992).

It is said that each of the three key elements of strategic management is essential

and that the used of these elements must be integrated with each other. If such elements

will be treated as a discrete element or if one is separated from the other, it can be

concluded that the organisation may not be able to achieve the main objective of using the

concept of strategic management. It is said that strategic analysis, strategic choice and

strategic implementation activities occur at three hierarchical levels in a large organisation:

corporate, divisional or strategic business unit and functional. By using these three as

interdependent with each other will make any business organisation have the competitive

edge in the business arena (1996).

Approaches to Strategic Management

The concept of strategic management was developed to enable managers to align

their organisations with the changing environment in order to achieve organisational goals

and objectives (2000). Today, strategic management has been associated with a variety of

models and styles. The development of this concept is essential because it corrects the

anxiety with strategy analysis in the early stage and gives special attention to strategic

choice and strategic implementation in the later stage.

Strategic management may be viewed from three general perspectives: product-

market strategy, competence-based strategy and the integration of the first two by means of

the mission and the vision of the organisation. The product-market strategy perspective
views the firm as a collection of product/market combinations (i.e., a portfolio). This view

sees strategy as a matter of positioning the firm in its environment, either by selecting the

optimal mix of product/market combinations or by positioning in relation to stakeholders.

Instead of viewing the firm as a collection of product/markets, it is also

possible/feasible to view an organisation as a collection of resources or competencies. This

view starts in opposite perspective from that of the traditional product-market. It assumes

that a firm cannot be defined by the changing nature of its products and/or markets, but

rather by its core competencies, which may be less likely to change in the long run. The

rationale, then, is to generate competitive advantage by means of internal factors (i.e.,

technologies or core competencies). The next approach is core competencies which are

considered to be a more appropriate term for describing what generates competitive

advantage for a firm. These two views appear to be a duality. A core competence is a well-

performed internal capability that is central, not peripheral, to a company's strategy,

competitiveness, and profitability. The best-known explanation of core competence is

provided by Prahalad and Hamel (1990): " core competencies are the collective learning of

the organization, especially how to co-ordinate diverse production skills and integrate

multiple streams of technologies".

On the one hand, they appear to be rather incompatible, but on the other hand, they

are still two sides to the same coin: the organisation that must survive and prosper. This

corresponds to the third view, which is a holistic view in the sense that it sees both product-

markets and core competencies and attempts to integrate them for the benefit of the firm.

The considerations so far make it possible to propose a division of strategic management

into three sub decision areas: product-market strategy, competence-based strategy, and

integration of the other two decision areas.

Chapter 3
 Methodology

This study was conducted in order to assess the business practice or strategy of AIA

in Hong Kong. The focus of the assessment was on the firm’s management strategies. In

order to gather the necessary data, the researcher utilized the descriptive method, using

both qualitative and quantitative approaches. A total of 50 respondents were randomly

selected as participants. The survey-questionnaire method was the research instruments

used for data-gathering.

The senior managers who have been chosen in this study accomplished a survey

questionnaire to evaluate the strategy used by AIA. The results of the survey were then

processed by computing the weighted mean of each survey item. The computed values

were compared to the Likert scale for data interpretation. Relevant literatures were also used

to support the gathered findings.

The credibility of findings and conclusions extensively depend on the quality of the

research design, data collection, data management, and data analysis. This chapter will be

dedicated to the description of the methods and procedures done in order to obtain the data,

how they will be analysed, interpreted, and how the conclusion will be met. This section is to

justify the means in which the study was obtained and will help in giving it purpose and

strength as it will then be truthful and analytical. All these will help in the processing of the

data and the formulation of conclusions.

Specifically, this research will cover the following: the research design and method,

the respondents or subjects to be studied (which will include the sampling method), the data

collection instrument, and the data analysis. These will be presented below.

In this research, I will use descriptive method of research is to gather information

about the present existing condition. The purpose of employing this method is to describe

the nature of a situation, as it exists at the time of the study and to explore the cause/s of
particular phenomena. The researcher opted to use this kind of research considering the

desire of the researcher to obtain first hand data from the respondents so as to formulate

rational and sound conclusions and recommendations for the study.

I. Research Method

For this study, the research used qualitative and quantitative approach. The

qualitative method permits a flexible and iterative approach, while the quantitative research

method permits specification of dependent and independent variables and allows for

longitudinal measures of subsequent performance of the research subject.

The value of qualitative research can best be understood by examining its

characteristics. One of the primary advantages of qualitative research is that it is more open

to the adjusting and refining of research ideas as an inquiry proceeds.

Also, the researcher does not attempt to manipulate the research setting, as in an

experimental study, but rather seeks to understand naturally occurring phenomena in their

naturally occurring states. Inductive reasoning, as opposed to deductive reasoning, is

common in qualitative research, along with content or holistic analysis in place of statistical

analysis (1995).

On the other hand, quantitative method is compatible with the study because it allows

the research problem to be conducted in a very specific and set terms (1998). Besides,

quantitative research plainly and distinctively specifies both the independent and the

dependent variables under investigation.

It also follows resolutely the original aims of research objectives, arriving at more

pertinent and sound conclusions, testing hypothesis, determining the issues of causality and

minimises or eliminates subjectivity of judgment ( 1996). Furthermore, this method allows for

longitudinal measures of subsequent performance of research subjects (2002).

 II. Research Instrument

The researcher designs a self-administered questionnaire for the data gathering

process to get qualitative and quantitative data. The primary aim of the questionnaire is to

determine the strategy used by American International Assurance Company to overcome

the challenges given by the banking industries that offers both insurance and investment

plans as part of the product portfolio. This research will use a mixture of closed questions

and more open comments in the questionnaire. A closed question is one that has pre-coded

answers. The simplest is the dichotomous question to which the respondent must answer

yes or no. Through closed questions, the researcher will be able to limit responses that are

within the scope of this study.

Respondents of the Study

The study has senior managers of AIA. All of these participants were selected

through random sampling. This sampling method is conducted where each member of a

population has an equal opportunity to become part of the sample. As all members of the

population have an equal chance of becoming a research participant, this is said to be the

most efficient sampling procedure. In order to conduct this sampling strategy, the researcher

defined the population first, listed down all the members of the population, and then selected

members to make the sample. For this purpose, a self-administered survey questionnaire in

Likert format was given to the respondents to answer.

The senior managers assessed the management strategies of AIA terms of the

outcome of its process (e.g. key resources, strengths and weaknesses). No inclusion criteria

were applied for the individual applicants; hence, all were made part of the population.
However, due to time and budget constraints, the researcher opted for a smaller sample

size.

Research Instruments

For this study, the survey-questionnaire instruments were used achieve the main

objective of the study. A self-administered questionnaire was distributed to the selected

senior managers. The questionnaire given to the senior managers aimed to assess the

business practice of AIA in competing with other insurance and finance industry. In addition,

this also aims to evaluate the efficiency of the strategies of AIA in terms of the mentioned

aspects above. In general, the performance of the AIA was evaluated for this study in order

to determine whether its strategy is effective or not. This focus of the assessment was based

on the principles introduced by various authors.

The questionnaire was structured in such a way that respondents will be able to

answer it easily. Thus, the set of questionnaire was structured using the Likert format with a

five-point response scale. A Likert Scale is a rating scale that requires the subject to indicate

his or her degree of agreement or disagreement to a statement. In this type of questionnaire,

the respondents were given five response choices. These options served as the

quantification of the participants’ agreement or disagreement on each question item. Below

are the designated quantifications used in the questionnaire:

5 Strongly Agree
4 Agree
3 Uncertain
2 Disagree
1 Strongly Disagree

Data Analysis and Presentation

 The study utilised first hand data which comes from the chosen respondents who

answered the survey-questionnaires given to them. First hand data are those that come from

the respondents who have been surveyed prior to the research. The study also utilized

secondary data. Secondary data include raw data and published summaries, as well as both

quantitative and qualitative data. Saunders, Lewis & Thornhill (2003) deduced that

secondary data fall into three main subgroups—documentary data, survey-based data, and

those compiled from different sources.

With this particular study, the researcher utilized documentary secondary data (in the

form of articles from books, journals, magazines, and newspapers) that are generally about

the marketing strategies and customer satisfactions as well as relevant literatures and

survey-based data in order to meet the objectives of this study. In order to analyse the data

gathered from the survey, the weighted mean for each question item was computed.

Weighted mean is the average wherein every quantity to be averaged has a corresponding

weight.

These weights represent the significance of each quantity to the average. To

compute for the weighted mean, each value must be multiplied by its weight. Products

should then be added to obtain the total value. The total weight should also be computed by

adding all the weights. The total value is then divided by the total weight. Statistically, the

weighted mean is calculated using the following formula:

or
The computed mean was then compared to the scale below for interpretation:

Range Interpretation
4.50-5.00 Strongly Agree
3.50 – 4.49 Agree
2.50 – 3.49 Uncertain
1.50 – 2.49 Disagree
0.00 – 1.49 Strongly Disagree

Results of the survey were presented in tables. Excerpts from the interview process

were integrated based on the analysis outline. Relevant literatures to support the findings

are also included.

Validity

In order to test the validity of the evaluation tool which used for this study, the researcher

tested the questionnaire to 5 respondents. These respondents as well as their answers were

not part of the actual study process and were only used for testing purposes. After the

questions have been answered, the researcher asked the respondents for any suggestions

or any necessary corrections to improve the instrument further. The researcher modified the

content of the questionnaire based on the assessment and suggestions of the sample

respondents. The researchers excluded irrelevant questions and changed vague or difficult

terminologies into simpler ones so as to make the survey more comprehensive for the

selected respondents.

Ethical Considerations

As this study utilized human participants and investigated on company practices,

certain issues were addressed. The consideration of these issues is necessary for the
purpose of ensuring the privacy as well as the security of the participants. These issues

were identified in advance so as prevent future problems that could have risen during the

research process. Among the significant issues that were considered included consent,

confidentiality and data protection.

Chapter 4

DATA ANALYSIS AND PRESENTATION

Upon completion of the data gathering activity, the respondents who passed the

consistency measures of the researcher totalled to 50 accomplished survey questionnaires.

All these participants were included in the data presentation and analysis in the hope of

attaining the goals and objectives of this particular research project. The following

discussions constitute the accumulated information for this research study which includes

the descriptive results and analysis of the answers of the respondents. Since presentation of

the results of the study show no significant value in using the five degree Likert Scale

denominations (5 Strongly Agree, 4 Agree, 3 Uncertain, 2 Disagree, 1 Strongly Disagree),

the researcher decided to classify the answers of the respondents into three categories (3

Agree, 2 Uncertain, 1 Disagree) to collapse the data instead of using the five-level degree of

measurement to provide comprehensive information that were elicited from the survey

participants.

Demographic characteristics of the respondents

 In order to have a general idea on the general social and economic characteristics of

the respondents, the data and discussion provided in this section of the results and findings

of the study presents the details of the overall description of the sample population.

Age. In terms of age, almost three-fourths of the total number (78%) of respondents

comprises the adult group categorization (30 – 59 yrs. old) while the age of the remaining

participants compose the employees who are below 20 years old (4%), and 20 to 29 years

old (18%). It could be inferred that most of the employees of the AIA are people in their mid-

life who have already established their careers and are probably earning for the daily needs

of their families. A more graphic illustration of the respondents’ age distribution is detailed in

the pie chart below.

Figure 2

Sex. The data also indicated that more than half of the respondents (66%) are female

while the remaining participants in the research activity are male (34%). It could be inferred

that the job nature in AIA provides career opportunities to competitive individuals regardless

of their gender since there findings states that the gap and the sample population difference

between the number of male and female employees is negligible. Figure 3 below illustrates

the specific results of the research study in terms of the sex of the respondents.

Figure 3

Civil status. Meanwhile, the largest portion of the respondents (64%) indicated that

they are married followed by those who are single (20%), thus supporting the inference in

Figure 1 regarding their familial responsibilities. Employees who claimed that they are

separated comprises of 4% out of 50 respondents and widows/widowers (12%). From these

research results, it is evident that three-fourths of the respondents (84%) attend to and meet
the needs of their immediate family members. See Figure 5 below for the details of the

research findings on the participants’ claimed civil status.

Figure 5

Years of employment in the company

The largest portion of the total number of respondents (50%) stated that they have

below five years of working experience in AIA followed by the employees who have gained

six to ten years of career experience (36%) in the company. It is remarkable to note

however, that there are 14% of the respondents who have at least 11 years of work

dedicated to the organization. These findings are clear indication that the company has

interesting strategies of minimizing the turnover of the employees and provides good

opportunities to company members who have relatively lesser experience in the company

operations. Details of these findings are illustrated in Figure 6 below.

Figure 6

Part 2: Perception of Respondents

The proceeding sections will present the results in accordance to the Likert

technique. It will be remembered that the respondents of the study were presented a set of

attitude statements so they can express their agreement or disagreement with the use of a

seven-point scale, wherein 5 is equivalent to an answer that merits a strong agreement and

1 as showing a strong disagreement (see chapter 3). This will provide a greater

understanding about the observations of the following respondents towards the strategies

used by AIA to outgrow its rival companies.

 1. The Perception of Respondents about the Business strategy of AIA

Table 1

Strategy of AIA

Weighted
Statements 5 4 3 2 1 Interpretation
Mean
1. With respect to management strategy, 33 17 0 0 0 4.66 Strongly Agree

the AIA has been able to initiate efficient

and effective strategy to meet the needs

of the employees and customers

2. Staff or employees understand the 25 23 2 0 0 4.46 Agree

mission, vision, and goal of their present

organisation as part of their efficient

management strategy
3. The organisation adopts an employee 31 19 0 0 0 4.62 Strongly Agree

and costumer-focused strategy to satisfy

the needs of the employees and

customers
4. The organisation handles employee 29 21 0 0 0 4.58 Strongly Agree

and customer relations effectively

5. With the help of the current 35 14 1 0 0 4.68 Strongly Agree

management strategy, AIA enables to

understand and reach out to the needs of

its customers in providing quality

insurance and financial services.

6. The management address the need to 37 13 0 0 0 4.74 Strongly Agree

cope with different management strategy

development.
7. The management respond to the need 33 17 0 0 0 4.66 Strongly Agree

to have qualified and competent

personnel as part of the strategic

management.
8. The management used efficient 25 23 2 0 0 4.46 Agree

communication approach within the entire

organisation.
9. As part of AIA strategy, the company 31 19 0 0 0 4.62 Strongly Agree

easily adapts to the new environment

brought about by the implementation of e-

commerce in most financial and insurance

industries.
10. The current strategy is addressing the 35 14 1 0 0 4.68 Strongly Agree

need to cope with technological changes

11. The company utilises effective 37 13 0 0 0 4.74 Strongly Agree

information technology and e-commerce

as part of their management system.

12. The company has able to sustain its 31 19 0 0 0 4.62 Strongly Agree

competitive advantages through its

current business strategy.

Table 1. The table above indicates the perceptions of the respondents pertaining to

the management strategy of AIA in Hong Kong. According to the chosen respondents, AIA

has been able to initiate management strategy to be able to outgrow their rival companies.

On this particular statement, the statistics shows the weighted mean of 4.66 and interpreted

as strongly agree response. Majority of the respondents believed that management strategy

of AIA in Hong Kong adheres to the needs and demands of their target market which was

verified by weighted mean of 1.06. Moreover, they claimed that the staffs and employees of

the company understand the mission, vision, and goal of their present organisation.
According to the surveyed individuals, the organisations adopt an employee consumer-

focused model to cope up to the continuous change in the industry.

Based on the analysis, it also shows that the employees of AIA strongly agreed that

the company has been able to sustain its competitive position and advantage in the banking

and insurance sectors because of its business strategy.

2. Determining the Perception of the Respondents Regarding the factors that

affects the performance of AIA

Table 2

Statements 5 4 3 2 1 Weighted Interpretation

Mean
1. The status of politics in 29 21 0 0 0 4.58 Strongly Agree

Hong Kong affects the

progress of AIA
2. Issues in technology 35 14 1 0 0 4.68 Strongly Agree

and innovation predict the

future of AIA in providing

banking and insurance

service.
3. The buying behavior of 37 13 0 0 0 4.74 Strongly Agree

consumer affects the

success of AIA
4 The current economic 33 17 0 0 0 4.66 Strongly Agree

status of HK affects the

performance of AIA.
5. The innovation 35 14 1 0 0 4.68 Strongly Agree

strategies of other Banking

 and insurance industries

affect the overall

performance of AIA.

Table 2 provides the result on the perception of the respondents regarding factors that

affects the performance of AIA. The findings shows that majority of respondents strongly

agreed on the given statements. It shows that the respondents strongly agreed that the

status of politics in Hong Kong affects the progress of AIA. Furthermore, the respondents

strongly agreed that buying behavior of the consumer influences the success or the

performance of AIA in HK market. The participants also strongly agreed that issues in

technology and innovation, economic status and the innovation strategies of other banking

and insurance industries predict the future of AIA business in terms of providing banking and

insurance services. With this result it can be argued that the respondents are aware of the

factors s which can affect the organisational performance of AIA in Hong Kong.

3. Core Competencies of AIA as perceive by the Respondents

A core competence is a well-performed internal capability that is central, not

peripheral, to a company's strategy, competitiveness, and profitability. The best-known

explanation of core competence is provided by (1990): " core competencies are the

collective learning of the organization, especially how to co-ordinate diverse production skills

and integrate multiple streams of technologies".

Based on the answers provided by the respondents, the following are the

summarised core competencies of American International Assurance Company (AIA).

Company Management. Being able to know and implement an efficient business

strategy, this has given the company many advantages. The respondents perceived that the

company management allows the ease in monitoring the company’s core activities. In
addition, the employees also mentioned that the company has given them significant role

and contribution to the company, which in turn allows them to be motivated. In addition, the

respondents also perceived that the company management of AIA has divided its core

activities into appropriate sections, allowing smoother flow of operations. Compared to other

banking and insurance companies, the compactness of AIA allowed it to establish a

corporate culture that has not only benefited its overall operations but its standing in the

market as well.

Customer Service. According to the participants of the study, AIA in HK was able to

maintain a strong relation with its customers. Through its efficient service and quality

products, the market had recognized the ability of the company to satisfy consumer needs.

Moreover, this suggests the core values of the company. The employees of AIA mentioned

that the company is not solely after profit generation and market growth. It also prioritizes its

customers, which in turn helps in building a stronger market. This corporate value makes

AIA distinct form other similar businesses.

Products and service Design. One of the factors that make AIA different forms other

similar companies that are its ability to produce products and services based on their own

designs. It’s the efficient staffs of the AIA enables the company to produce products and

insurance services that are new to the market, leading to higher market interest. Instead of

just assembling materials to form the product, the company creates its own product and

service design as well. The distinct design of the company makes its products to stand out

from others.

Corporate Culture. Another core competency that has been mentioned by the

respondents includes the AIA’s corporate culture and effective management. In common

terms, organizational culture is defined as the manner in which things are accomplished.

According to (2001), organizational culture involves the sharing of learning. Sharing of

thoughts and experiences with others implies that organizational culture promotes a certain
level of stability among the members of the organization. The corporate culture of AIA allows

the company to achieve its goals and perform based on set standards. The efficiency of the

company’s customer service enables it to create stronger customer relations which in turn

will be useful during new product launches and company offers. The relation of the company

with its customer however, can be enhanced further by implementing new methodologies.

Efficient use of information Technology. The ability of being an innovative industry of

AIA is mainly because of their competencies and capabilities. According to the respondents,

a recognised source of the competitive advantage of AIA, both in the domestic and

international level has been its core competencies. It is said that the IT related core

competency of AIA is the integration of AIA’s business strategies with information technology

through the use of internet. The company has its own website to reach more customers all

over the world. In addition, the company used Information communication technology to

identify the needs and demands of their target market.

Chapter 5

Summary, Conclusions and Recommendations

A. Summary

The scope of strategic management is inherently greater than any other aspects of

different organisation. Primarily, the main goal of this research study is to identify the

strategies used by American International Assurance (AIA) company to remain competitive

in the banking and insurance industries. Furthermore, the aim is to determine the factors that

affect overall performance of the industry and to know the core competencies of AIA.
 To achieve the objective of the study, the researcher have used descriptive approach

and gathered pertinent data from 50 respondents of AIA through its self-administered

survey-questionnaires. Base on the data gathered and analysed, it has been found the

company uses effective management strategy.

Most of the respondents have strongly agreed that strategies of AIA have been

important in meeting the needs and demands of their target market, which results to having

a competitive advantage mong their rival companies. The study also shows that the effective

management strategy allows the company to outgrow their rival companies in banking and

insurance industries. Effective management practices provide the firm with highly motivated

and productive employees that works on meeting the needs and demands of their clients.

By paying attention to customer wants and needs, organizations are more likely to

achieve their objectives in the marketplace. Customers are the ones benefited by the

management of AIA. By giving clients what they want they tend to be more willing to

purchase a company’s products than its competitors. In customer service their can be

different requirements for different place and different situations.

The result of the study shows that the effective strategies initiated by AIA have been

able to meet the organisational goal of improving and enhancing the performance of the

employees but also the performance of the organisation as well in meeting the needs of the

customers. In addition, the result also shows that as perceived by respondents, the

marketing strategies enhances the market capabilities of AIA to be more motivated and

productive in providing quality products and services that will be offered to the target market.

Effective strategies functions as a company’s basis to achieve competent organisational

performance.

In addition, the study also revealed that as perceived by the respondents the factors

that affects the performance of the company includes the political status of HK, technology
and innovation, buying behavior of consumers, current economic status of HK and the

innovation strategies of other banking and insurance industries.

As mentioned, one of the aims of this research is to identify the core competencies of

AIA. The gathered data revealed that the core competencies of AIA includes company

management, products and service design, corporate culture and their efficient use of

information Technology.

Conclusion

At present, businesses are becoming more focused on different aspects that influence

their organisational performance and competitive position in the marketplace. Although,

competition in banking and insurance industry is tough, it can be said that AIA is still able to

compete well because of their effective management strategies, their ability to cope with

different factors that affects the business as well as their core competencies.

Through this study, it can be perceived that the success of an organisation may

depend on the strategies implemented by the management of the company. Being able to

identify these factors is important so that other companies will likely to find strategic ways to

stay in the competitive market.

The dissertation revealed that these factors benefit the organization, the group, and

the individual. Accordingly, the context of these factors is about enhancing employee skills to

do their tasks well and to be able to contribute to the success of the organisation. It can be

said that these factors has been useful in identifying the preferences of their market and this

has helped them in enhancing the potentials of their organisational performance and core

competencies to its maximum level.

 It can be said that the AIA in HK has been able to use effective strategy to compete

well in the marketplace. The assessment of the strategies used by the company provides a

constructive impact on organisational culture, organisational development, and bottom line.

Through this, the employees has been able to see that the AIA is geared towards ensuring

that organisational goal will be achieved through different business activities and practices

initiated.

Based from the research questions developed for this research, a number of

important findings were drawn. With regards to the components of the factors that influence

AIA, the company has been able to value their employees and considers essential activities

such as capabilities, technology, and innovation.

Recommendation

Effective business practices are essential elements for the success of all businesses.

Through these, companies are able to distribute and promote their products and services to

retailers and consumers.

In this research paper, it becomes apparent that management strategy is among the

key factors for businesses to succeed and meet the organisational goals. From this

discussion, several important points had been suggested. For instance, this research has

implied the value of choosing the most applicable and effective management strategy which

will enable them to meet and the needs of the customers. Sufficient time should be allotted

by the company in order to develop effective strategy plans. In addition, time is also

necessary during the implementation process.

Skills or expertise is also an important element in implementing business strategies,

specifically leadership and communication skills. According to (2003), strategies tend to

evolve constantly. As businesses encounter different pressures and environmental factor

over time, their respective managements must create strategies that are appropriate to their

current situation. Some of the factors that encourage constant strategic changes include the

identification of new business threats or opportunities, technological advancements,

emergence of new purchasing trends and requirements, competitive conditions and

initiatives to increase market share. Strategic reforms and business changes actually share

a directly proportional relation; as changes and adaptations in business increases, the need

for strategic reforms also increases. Business strategies must evolve in order to let

companies overcome the challenges that they encounter.

In this discussion, much focuses where given on how these strategies help the

company to outgrow its rival industries. However, it is also necessary to point out that

monitoring the progress or effects of these strategies are also prioritized. Monitoring systems

or procedures should be developed by companies along with the implementation plans of

the chosen business strategies. This is an important additional process to strategy

implementation as it leads to several other benefits.

After citing all these other important needs, perhaps the most important learning from

this research is that implementing business strategies, be its customer-oriented or not, is not

a standard matter. Each business is operating in an environment that is different from

others. This means, businesses are subjected to unique internal and external factors, which

should be considered in strategy implementation. Hence, rather than follow the

implementation practice of major and successful corporations, it is more recommendable to

take an individualized or customized approach in implementing business strategies. In this

way, greater control can be obtained.

In this regard, the management of the company must have the ability to strategically

decide the most essential external environment factors to be monitored in order to sustain

competitive advantage.