Question

Analyze the business-level strategies for Aetna insurance company and determine the business-level strategy you think is the most important to the long-term success of the firm and whether or not you judge it to be a good choice. Justify your opinion.

Answer 1

answer-

Aetna is an American managed health care company that sells traditional and consumer directed health care insurance and related services, such as medical, pharmaceutical, dental, behavioral health, long-term care, and disability plans, primarily through employer-paid (fully or partly) insurance and benefit programs, and through Medicare.

the business level strategies are cost leadership strategy in which company would make its products or services at low cost and sell it at lower prices to customers. In this strategy, Aetna can provide low cost insurance which customers would have to pay less and customers would get more benefits from this.

another strategy which it can use is differentiation strategy in which Aetna can provide services which its competitors do not provide to customers. Aside from the standard healthcare policies, players in the private health insurance industry also offer specialty insurance. This type of insurance focuses specifically on dental, vision, disability, and critical illnesses such as cancer, heart attack, and renal or kidney failure. Members who are more prone to critical illnesses tend to buy specialty insurance.

Aetna offers dental benefits to federal employees under the Federal Employees Benefits Program and the Federal Employees Dental and Vision Insurance program. Both the premium rates for fully insured dental plans and fees for self-insured dental plans are subject to federal government review and audit. In fully insured plans, the health insurer assumes responsibility of future claims while in self-insured plans, it is the responsibility of the plan sponsor.

In addition, Aetna also provides behavioral health and vision coverage, though the enrollments are substantially lower than those in dental plans.

if any one of above or mix of both cost and differentiation business strategy would help the firm to get success because it would help to gain Aetna a competitive advantage in the industry and increase its customer base and profitability.