Strategy Defined

The word “strategy” is derived from the Greek word “stratçgos”; stratus (meaning army) and “ago” (meaning leading/moving). Strategy is an action that managers take to attain one or more of the organization’s goals. Strategy can also be defined as “A general direction set for the company and its various components to achieve a desired state in the future. Strategy results from the detailed strategic planning process”. A strategy is all about integrating organizational activities and utilizing and allocating the scarce resources within the organizational environment so as to meet the present objectives. While planning a strategy it is essential to consider that decisions are not taken in a vaccum and that any act taken by a firm is likely to be met by a reaction from those affected, competitors, customers, employees or suppliers. Strategy can also be defined as knowledge of the goals, the uncertainty of events

and the need to take into consideration the likely or actual behavior of others. Strategy is the blueprint of decisions in an organization that shows its objectives and goals, reduces the key policies, and plans for achieving these goals, and defines the business the company is to carry on, the type of economic and human organization it wants to be, and the contribution it plans to make to its shareholders, customers and society at large.

Features of Strategy

1. Strategy is Significant because it is not possible to foresee the future. Without a perfect foresight, the firms must be ready to deal with the uncertain events which constitute the business environment.
2. Strategy deals with long term developments rather than routine operations, i.e. it deals with probability of innovations or new products, new methods of productions, or new markets to be developed in future.
3. Strategy is created to take into account the probable behavior of customers and competitors. Strategies dealing with employees will predict the employee behavior.

Strategy is a well defined roadmap of an organization. It defines the overall mission, vision and direction of an organization. The objective of a strategy is to maximize an organization’s strengths and to minimize the strengths of the competitors.

Strategy, in short, bridges the gap between “where we are” and “where we want to be”.

Strategic Leadership

Strategic leadership refers to a manger’s potential to express a strategic vision for the organization, or a part of the organization, and to motivate and persuade others to acquire that vision.

Strategic leadership can also be defined as utilizing strategy in the management of employees. It is the potential to influence organizational members and to execute organizational change. Strategic leaders create organizational structure, allocate resources and express strategic vision. Strategic leaders work in an ambiguous environment on very difficult issues that influence and are influenced by occasions and organizations external to their own.

The main objective of strategic leadership is strategic productivity. Another aim of strategic leadership is to develop an environment in which employees forecast the organization’s needs in context of their own job. Strategic leaders encourage the employees in an organization to follow their own ideas. Strategic leaders make greater use of reward and incentive system for encouraging productive and quality employees to show much better performance for their organization. Functional strategic leadership is about inventiveness, perception, and planning to assist an individual in realizing his objectives and goals.

Strategic leadership requires the potential to foresee and comprehend the work environment. It requires objectivity and potential to look at the broader picture.

A few main traits / characteristics / features / qualities of effective strategic leaders that do lead to superior performance are as follows:

	Loyalty- Powerful and effective leaders demonstrate their loyalty to their vision by their words and actions.
	Keeping them updated- Efficient and effective leaders keep themselves updated about what is happening within their organization. They have various formal and informal sources of information in the organization.
	Judicious use of power- Strategic leaders makes a very wise use of their power. They must play the power game skillfully and try to develop consent for their ideas rather than forcing their ideas upon others. They must push their ideas gradually.
	Have wider perspective/outlook- Strategic leaders just don’t have skills in their narrow specialty but they have a little knowledge about a lot of things.
	Motivation- Strategic leaders must have a zeal for work that goes beyond money and power and also they should have an inclination to achieve goals with energy and determination.
	Compassion- Strategic leaders must understand the views and feelings of their subordinates, and make decisions after considering them.
	Self-control- Strategic leaders must have the potential to control distracting/disturbing moods and desires, i.e., they must think before acting.
	Social skills- Strategic leaders must be friendly and social.
	Self-awareness- Strategic leaders must have the potential to understand their own moods and emotions, as well as their impact on others.
	Readiness to delegate and authorize- Effective leaders are proficient at delegation. They are well aware of the fact that delegation will avoid overloading of responsibilities on the leaders. They also recognize the fact that authorizing the subordinates to make decisions will motivate them a lot.
	Articulacy- Strong leaders are articulate enough to communicate the vision(vision of where the organization should head) to the organizational members in terms that boost those members.
	Constancy/ Reliability- Strategic leaders constantly convey their vision until it becomes a component of organizational culture.

To conclude, Strategic leaders can create vision, express vision, passionately possess vision and persistently drive it to accomplishment

HSBC Insurance Walked Off Vietnam

HSBC Holdings has put its Vietnam insurance business (18 percent stake in government-controlled Baoviet Holdings) on the block, in a deal that could fetch about $400 million for Europe's biggest bank as it pushes to exit non-core operations globally.

The stake has a market value of $250 million, but HSBC is expecting a hefty premium due to Baoviet's market position and the potential to raise the ownership level at a later stage. Unlisted Sumitomo Life is among Japan's four biggest life insurance companies.

HSBC has been pulling back from unprofitable markets and businesses as part of a three-year recovery plan. It has already sold 28 businesses, taken 15,000 staff off its payroll, and released about $55 billion in risk-weighted assets under the plan.

The planned exit from Vietnam comes four months after it sold its global general insurance business to AXA SA and Australia's QBE Insurance Group Ltd for $914 million.

Across Asia, HSBC owns and operates insurance businesses in India, Taiwan, Malaysia, South Korea, China, Singapore and Hong Kong, of which, Hong Kong is its biggest. It also owns a 16 percent stake in China's Ping An Insurance, valued at about $11 billion.

VIETNAM BUY
HSBC paid a total of $360 million to buy the 18 percent stake, which was acquired in two tranches in 2007 and 2009. Under the deal struck in 2007, HSBC committed to hold its shares for a minimum period of five years during which it had the option to increase the stake to 25 percent.

Hanoi headquartered Baoviet had more than 5,200 employees, 30,000-plus consultants and more than 130 branches, according to a fact sheet dated March 2011.

Vietnam's rapidly growing economy is attracting foreign insurers. In May, Canada's Sun Life Financial Inc formed a joint venture with Vietnam's PVI Holdings, allowing the Canadian insurer to sell insurance products.

Vietnam has 29 non-life insurers and 14 life insurers, according to an April report from insurance ratings agency A.M. Best. Total insurance revenue rose 21.6 percent to 37.5 trillion dong ($1.8 billion) in 2011, according to the report, which cited statistics from the Association of Vietnamese Insurers.

A combination of low insurance penetration -- in both the life and non-life insurance markets in Vietnam penetration is less than 1 percent, according to the A.M. Best report -- and a growing middle class could make it attractive to insurance companies forced to look outside of their home markets for growth.

Vietnam's real GDP grew by 5.9 percent in 2011, according to the International Monetary Fund. Its growth is forecast to ease a bit this year and then speed up again in 2013.

However, high inflation could hurt consumer spending and make it difficult for insurers to sell policies. Inflation in Vietnam, the highest in Asia last year, peaked at 23 percent in August, and the rate for all of 2011 was 18.58 percent, though it has moderated recently.

Manulife Asian Offensive

Even as Europe and the United States continue to teeter on the edge of fiscal chaos, Asia remains a beacon of hope for many companies looking for areas to expand and pick up the slack. Manulife is one of those companies that have put the specter of 2008’s financial crisis behind them. 2011’s performance saw a swing of $1.8 billion in new income over 2010, turning a tiny profit while it turns its attention more directly towards the markets that have the greatest opportunity for growth.

The region is experiencing unprecedented growth, with a fast growing middles class looking for more of the creature comforts that come with improving fortunes. As more and more people seek the trappings of a better life, they also seek ways to protect and preserve what they have. As such, insurance is a leading indicator of middle class income growth as people emerge from a subsistence-based lifestyle, moving from living day to day and focusing more on planning for the future and protecting their families and property.

Rebalancing the Portfolio
Shrinking wealth management sales in Canada (down 5% YoY) and the U.S. (down 12% YoY) in Q1 of 2012 only further highlight the potential in Asia (up 7% YoY). On the insurance side of the business, Asia saw 31% YoY growth to $365 million and a 79% increase in Canada, while the U.S. languished, losing 1%. This drove a 35% increase overall in their insurance business in 1Q 2012. They manage $512 billion in assets, up 3.5% over Q4 2011.

Manulife has operated in Asia for over 115 years but is now ramping up operations in the region to take advantage of the growing market. The company estimates that within five years the world’s middle class will reach the 1 billion mark, with Asia accounting for roughly 85% of that. Manulife reported record revenues from the region in Q1 2012. Asia now represents the highest percentage of their insurance sales which have doubled from ~5% of total revenue to more than 10% since Q1 2011.

To service this growing market Manulife has plans to aggressively grow the number of agents in the region over the next five years to 100,000, nearly double what it has at the moment. The company recently became the first foreign insurance provider to operate in Cambodia, opening its main office in Phnom Penh with about 40 staff, which it plans to grow to over 1,000 by 2015.

Manulife’s Senior Vice President in Cambodia David Wong expressed that the company is committed to the region, saying that Manulife “sees the potential of Cambodia, with a population of about 15 million and an emerging middle class, as a growth area in the ASEAN countries. The commencement of operations in Phnom Penh reflects Manulife's commitment as a strong, reliable company to the ASEAN region in general and Cambodia in particular."

Manulife is already operating in Indonesia and Vietnam, both major, relatively untapped markets, with a combined population nearly the size of the U.S. between them. In addition to sales operations, the company has initiated a campaign to educate the market on the benefits of having insurance coverage and protecting their family and assets.

War of Attrition
As the financial situation in the west deteriorates, those that survive are in a great position to pick up distressed assets on the cheap. Manulife is one of the last bidders standing in the quest to acquire ING’s Asian business, which is under orders from the E.U. to divest themselves of their insurance business in the next year to qualify for their bailout. This is a potential $7 billion deal at this point.

American insurers Metlife  and Prudential, who are Manulife’s biggest competitors in Asia, have recused themselves as bidders in the deal, leaving only Korea Life Insurance and KB Financial group as the other second round bidders.

They are also bidding against Prudential for Aviva’s stake in their Malaysian insurance joint venture with CIMB group (CIMB:MK). While a much smaller deal, ones like this will continues to dot the landscape as asset deflation separates those with unencumbered balance sheets from those without.

.For now, it looks like Manulife is well-positioned all across Asia to pick up the pieces.

ING is Packing But Prudential Is Visiting

Prudential, Britain's biggest insurer, wants to expand its foothold in emerging southeast Asian economies after the region drove a better than expected 13 percent increase in its half-year profit. The 160-year old insurer, which relies on fast-growing Asia for 45 percent of its sales, plans to enter Cambodia and is also considering a move into Myanmar, Chief Executive Tidjane Thiam.

Thiam said less developed Asian economies where take-up of insurance is low had the potential to drive "double growth" as rising economic expansion encouraged more people to insure themselves as well as others to take on more cover.

Profits at Prudential's Asian division, which spans 13 markets including Hong Kong, Indonesia and Malaysia, rose 20 percent in the first six months of the year, fuelling a 13 percent increase in group operating profit to 1.16 billion pounds ($1.81 billion).

Meanwhile Prudential, which warned in February it might quit Britain to avoid the European Union's proposed new Solvency II capital rules for insurers, said it was still weighing up a potential move in case the new regime proves too onerous.

Prudential is concerned the new regulations could force it to raise capital requirements at its Jackson National Life business in the United States, making it uncompetitive against local rivals. There has long been speculation Prudential could move to Hong Kong, irrespective of Solvency II,  in recognition of its growing focus on Asia.

Thiam said the company was on track to achieve its target of doubling its 2009 operating profit in Asia by 2013. That would allow the Asian business to fund itself securely, giving Prudential the option of breaking itself up, analysts have said.

Critical Illnesses

Is the treatment for angioplasty covered?
Our standard list of CI definitions has about 39 conditions of which companies are allowed to choose a maximum of 36 conditions. Quite a few of the life insurers do include angioplasty in their list of 36 CI though not all do. Angioplasty is covered up to 10% of the sum assured or to a maximum of RM25,000 — the reason being that the benefit amount must be in relation to the severity of the CI condition suffered.

Generally, treatment with one or two stents the total cost incurred would be within RM25,000. If 100% sum assured is paid, and subsequently the insured has a serious CI (e.g. failure of angioplasty and he then needs bypass surgery), the insured would have no benefit amount left to fall back on.

Also a CI plan should not be a replacement of a medical plan, in that the CI plans are meant only to provide top-up benefit for medical cost incurred. The CI plan should also enable an insured to meet other expenses incurred as a result of the CI e.g. loss of income due to temporary inability to return to work.

Thus in the case for angioplasty, an insured is likely able to resume work much faster as opposed to for example a case of a stroke, where the insured may be unable to return to his previous job due to residual paralysis.

Are there any plans to review the current definitions to reflect the progress and development of medical science, especially in the areas of heart attack and surgery?

LIAM has just reviewed the definitions for the standard CI e.g. for heart attack to ensure the severity of heart attack is in line with what the product was intended to cover and it was priced for.

Insurance companies are definitely keeping up with the advancements in medicine, realising now that it is essential to start to cover for earlier stages of critical diseases to allow hopefully for early intervention and to reduce risk of illness progression.

Thus quite a few companies have launched early stage CI products. These definitions have not been standardised by LIAM and companies choose which conditions they want to cover (usually based on consumer need and affordability).

For instance, under early CI a company offers cover on diagnosis of single vessel and double vessel coronary artery disease. However, the percentage of Sum Assured paid will be limited as per contract. Also early stage CI products often cover for corrective procedures via intra-arterial/key hole surgery as opposed to open surgery.

Does a CI plan cover all types of treatment?

The severity of each illness and treatment is stated in the definitions. Life insurance companies want to make the CI plan affordable to the public and in the event of a critical sickness, you have your policy to take care of.

On the other hand, if the insured purchase insurance coverage and requests that all the critical diseases be taken care of irrespective of the damage and method of treatment, the premium of such cover will be substantial.

Not many are willing to subscribe to such a tailor-made policy although companies do have them when requested. It is important to note that insurers’ claims decisions are made by referencing objective evidence and they are based on the conditions stated in the contract.

Insurers also highlight the exclusion clauses to provide freedom of choice to potential customers at the point of purchase.

Not Dreaming Big Enough

Here are Six Reasons That You Are Not Dreaming Big Enough…

Don’t Have a Clear Dream – Do you know what your dream really is? You say you want to be a successful. What does that mean? You say you want to be a writer. Of what? You say you want a new career. Doing what? You must be clear in your dreams. Whether it is to be a best-selling author or an expert in your field. Be specific about what you want to accomplish.

Don’t Know Your Own Limits – Many people aim too low in their dreams because they underestimate their own abilities. The truth is, you don’t know your personal limits until you test them. I promise you that you are stronger than you think. Push yourself and stretch your dreams.

Don’t Have the Discipline – Too many people flit from one thought to another. One day they dream of owning their own business, the next they want to be an actor. They have settled with the job they have because they don’t have the discipline to follow through on any one thing. Choose your dream and be resolute in your pursuit.

Lack of Expertise/Skills – People let their dreams slip and use the excuse, “I don’t know how to do that.” Well, get out there and LEARN. Pay your dues, put in the hard work, and stick with it. (Refer back to #3). No one starts as an expert or master in their field.

There Are Obstacles in Your Way - There are always going to be things in your way of your dreams. (Otherwise, they wouldn’t be dreams.) Sometimes, they are small things, other times they are brick walls. That shouldn’t stop you. Obstacles are there to make you prove how badly you want your dreams.

You Are Scared of Failure – When you are scared of being unsuccessful, you set your sights too low. If I pursue that dream, I might fail. It’s easier to say where I am. When was the last time you allowed yourself to fail.