Reference no: EM132247736
According the following paragraphs, make some recommendations and strategies.
Sun Life Financial is known to be one of the top few insurance companies in Canada that offers a wide range of products and services. With a balanced integration both vertically and horizontally, Sun life financial would have or may still be facing some issues with their current strategy.
Being located both upstream and downstream in vertical location, Sun Life Financial has opened itself up to a broad market with a dispersed supply chain. This means that the corporation's target market has broadened from individuals to companies to everyone. The flexibility and ability to tailor according to the needs of their consumers is advantageous yet also disadvantageous due to diversification in market. Both tailoring to consumer needs as well as having a large market are both require more time, costs and resources to operate. Being upstream and downstream in vertical location would also mean that Sun life financial would need more managerial personnel in order to operate and make decisions more effectively. However, vertical expansion whether it is downstream or upstream requires managerial expertise and expertise within the field of expansion in order to contribute to the success of the corporation and complement the existing business. Lack of managerial expertise would lead to lack of productivity and efficiency in and out of the department in addition to causing errors that may be difficult to revert. Lack of field expertise can lead to individuals that won't be able to contribute to the growth of the business and properly analyze the market or progress.
Aside from being both upstream and downstream in vertical location, Sun life Financial is also has a widespread horizontal location. In addition to having, already, a vast array of products and services available in Canada, Sun life has also expanded to North America, Europe and Asia with different products are better suited for the local market. Sun life Financial's wide ranged market already has many competitors within the Canadian and North American market, with international expansion, Sun life financial now also has international competitors. International expansion also means there are more laws, policies and standard procedures that must be followed according to the local region, this may lead to additional bureaucratic expenses the company would have to take on in order to operate. Additional policies and procedures would also mean that the company would have to be more rigid and strict, thus not being as flexible as they want to be.
The combination of being both vertically and horizontally spread means that there are many employees, managerial staff and departments in the Sun Life financial organization. This can contribute to additional disadvantages including ineffective communication, issues that can arise from decreased customer service, and lack of corporate synergy.
Sun Life Financial utilizes the multi-domestic strategy to tailor their products and services according to the local market. However, the goal for an international corporation is to build global efficiency while also achieving local responsiveness. The multi-domestic strategy that is currently being utilizes only focuses on achieving one of the two goals: local responsiveness. This means that global efficiency is being overlooked and that the company is not working at its full potential.
In addition, Sun Life's main mode of entry into international markets are via mergers or acquisitions. However, this may decrease the reputation the company has in the hearts of consumers. This is because as a larger company acquires and smaller, more local company, local consumers will only remember Sun life as the company that bought out the smaller one, raised prices and/or is now controlling the market. These are all negative opinions and views that can ruin the consumers view on Sun life at the beginning of their entry to the international market, damaging reputation from the start.