Sun Life Financial Report - Edited

8/4/2019 Sun Life Financial Report - Edited

http://slidepdf.com/reader/full/sun-life-financial-report-edited 1/22

Christine R. Cueva

Therese Regla-Marie Y. Espina



Sun Life Financial of Canada began in 1865, in Montreal,selling insurance policies to Canadians

By the 1890s, Sun Life Financial had begun an

internationalization process, by expanding toNicaragua, Ecuador, Peru, and Chile and later into Asia,including Japan, India, and China

In early 2000, Dikran Ohannessian, Sun Life Financial’s

vice president thought about obtaining a businesslicense in China



Statement of the Problem

What is the best way to organize Sun Life Financial’sentry to the Chinese market?

Which geographical market area to operate? What would be the best entry strategy?



Objectives To know whether Sun Life Financial is internally ready

to enter the Chinese market.

To investigate whether Sun Life Financial has the

resources to respond to opportunities and threats inthe company's environment.

To identify a city in which to operate.

To decide on Sun Life Financial's strategy that would

provide long-term viability without exhaustingresources.



SWOT AnalysisStrengths Weakness

Experience ininternationalization andentering new markets.

Opening a representative officein Beijing Helps establish a presence and

provide information which candetermine the right approachand strategy.

Joint venture agreement with theChina Everbright Group Share its distribution network

and local management’sexpertise

Foreign company entering anew (Chinese) market –relationships with local and

national governments can bea lot more complicated

No experience in the Chineseinsurance market



SWOT AnalysisOpportunity Threat

Large population – over 1.3billion people.

Extremely fast growing andattractive economy.

Decreasing social security inChina

High level of Bureaucracy Bureaucracy - government

characterized by specializationof functions, adherence to fixed rules, and a hierarchy of authority

Corruption & Piracy

Joint ventureagreements/decision-makingprocess



PEST AnalysisPolitical Economical

Communist system – placedtight controls on the country through political, social, andeconomic policies

World Trade Organizationmembership – government wasforced to completely open up theChinese market by the year2005.

Chinese government tries tocontrol as many aspect of international trade as possibleresulting in many restrictionsand regulations

Market-oriented Authorities changed their

approach – permitted small

enterprises and allowedinternational trade andinvestment quadrupling GDP since 1978 purchasing power per capita

remained low; ten percent of all citizens live below thepoverty line

80 million to 120 million rural workers were considered asurplus



PEST AnalysisSocial

Technological

Both in population and insurface China is an enormous

country Geographical differences

Different languages andethnic groups

One of the world leaders onthe fields of science andtechnology



Sun Life Financial bases their strategy on the following points:

1. Aggressively expand the wealth managementbusiness;

2. Strategically grow higher return protection business

lines;3. Achieve superior shareholder returns while

maintaining financial discipline;

4. Leverage strong brands across multiple product

offerings;5. Capitalize on distribution strengths; and

6. Pursue expansion in key strategic markets.



Alternative Courses of Actions Three (3) different entry strategies can be outlined:

1. "Minimalist" approach

2. "Full Speed" development

3. "Model Citizen"



"Minimalist" approach Selection of a less advanced city

Focus on traditional insurance products andcontaining the capital investment.

Maintain a presence and "shift gears" whenrestrictions are dropped and the marketplacebecomes more favorable.



"Full Speed" development Selection of a high-

growth city

Building a large agency

force Developing a full

portfolio of products inthe eventuality that

regulations wouldchange.



"Model Citizen“ Plan Calls for selecting a city

based more on co-operation, with a focuson building government

relations. Calls for capital

containment and theslow development of

new insurance productsbeginning with thetraditional portfolio.



Strategy Advantage Disadvantage

1. Minimalist

Approach

Awareness among potential

customers of the existence of

a company for providing

traditional insurance

products.

Profit will only be gained when

the restrictions are dropped.

Location is in a less advanced

city; people have less capital to

spend.

1. Full Speed

Development

Located in a high-growth city

(And when regulations change)

provides the immediate start in

a good position, since the city

has high population and a high

GDP rate.

A large amount of money will

need to be invested in building a

large sales force and develop a

full portfolio of products without

having the certainty regulations

will change

1. Model Citizen

Plan ("safest"

option)

Not too much money is

invested.

Awareness and relations are

built, beginning with the

traditional portfolio

Slow development of insurance

products.

Analysis of Alternative Courses of Actions



Comparative Study



Top 3 Cities: Shanghai and Guangzhou

Largest market and

Strongest market growth

Equal in terms of marketdevelopment

Guangzhou was the clear leader for purchasing potential

Tianjin would be in line with thenational average Life insurance market has the

potential to grow at a much fasterrate than the other two.



Objectives To know whether Sun Life Financial is internally ready

to enter the Chinese market.

To investigate whether Sun Life Financial has the

resources to respond to opportunities and threats inthe company's environment.

To identify a city in which to operate.

To decide on Sun Life Financial's strategy that would

provide long-term viability without exhaustingresources.



Conclusions Sun Life Financial has the financial strength and effective

customer service in other (international) markets, this canbe used to support the entrance to the Chinese market.

The joint venture with Everbright, brought the essential

resources of an established distribution network, localmarket expertise and a favorable relation with thegovernment.

Sun Life Financial can use their management expertise,

financial strength and extensive customer serviceexperience to support their business concept.



Conclusions Opportunities are based on a big market potential, whereas

threats are mainly due to the communistic history of thecountry.

PEST analysis concludes that political factors are still a bit

unstable (bureaucracy and market restrictions), but theother factors have seriously improved.

From the three cities that seemed attractive, Guangzhoulooks most attractive to enter the Chinese market.

highest GDP growth & GDP per capita, which means thebiggest market potential

average salary is higher in this city

Clear leader for purchasing potential





Recommendations We choose Guangzhou out of the three final cities.

Since Sun Life Financial wants to aggressively expand the wealth management business and

wants to achieve high profit and high returns forshareholder, a Full-Speed Development would bethe best strategy.

The most important key activity Sun Life Financialshould perform well in order to achieve customer

value is to convince potential customers of the value the insurance with Sun Life Financial has.



THANK YOU!

Documents

Sun Life Financial Report - Edited