about insurance company in Saudi Arabia
plz select only one company that will be popular in Saudia like Bupa
Executive Summary
This report will focus on an insurance company’s entry into the Saudi Arabian market. Focusing specifically on Bupa, the report will highlight its background and position in relation to the insurance industry and analyze the Saudi Arabian market environment, focusing on the external and internal environment. The SWOT analysis will determine Bupa’s strengths, weaknesses, opportunities, and threats as it prepares to enter the Saudi Arabian health insurance industry. A future growth opportunity analysis will highlight Bupa’s growth opportunities in the next three to five years. The report will offer revised objectives and marketing strategies to suit Bupa in the long run.
Introduction and Background
Background: Bupa
Bupa, a healthcare organization, offering insurance to healthcare customers, first opened its doors to health insurance customers in 1947. Presently, the organization provides healthcare insurance in many countries outside the United Kingdom (UK), its parent location. Bupa has grown into a giant healthcare insurance company employing more than 83,000 individuals to serve its broad market (Bupa). Bupa currently boasts 18 million healthcare insurance customers spread throughout many regions and countries, including the United Kingdom, Australia, Spain, Brazil, New Zealand, Poland, Mexico, the United States of America (USA), and Hong Kong, among other countries. Bupa’s business model focuses on improving its operations to meet local market conditions. Bupa describes itself as a healthcare insurance company whose 74% of its total revenue results from customer insurance accounts (Bupa). The insurance company also covers diverse healthcare issues, including dental health and aged care.
Bupa’s Business Model
Bupa’s health insurance business model functions primarily as a health insurance company serving many customers worldwide. The company claims that it has made health insurance its main business and focuses on all healthcare consumers, including corporate customers, individual customers, and Small and Medium-Sized Enterprises (SMEs) (Bupa). Bupa also covers other types of consumers, including customers seeking to access medical cover anywhere globally. In such a case, the company covers them through the International Private Medical Insurance (IPMI) program. Bupa offers IMPI through Bupa Global, which is a program focused on corporate employees and private individuals seeking medical cover in all their travel destinations (Bupa). Other services under Bupa’s health insurance umbrella include dental and travel insurance offered in select countries, health funding, cash plans, and third-party administration services.
Healthcare Customer Groups and Bupa
The healthcare insurance market serves a diverse group of customers. However, each healthcare insurance company suits different clients depending on their products and the preferred target. Examples of healthcare customers include the con-conformists, the healthy laidback, the hedonists, and the health expert. Non-conformists have a low level of involvement in their health, and they exhibit various behaviors that threaten their wellbeing (Smet & Rogiers). Some non-conformist health-threatening group behaviors include smoking, lack of physical exercise leading to overweight or obesity, and living stressful lives.
The healthy laidback health consumer group practices healthy lifestyles, believes in prevention than cure, and focuses on balanced ways of living. However, this group does not involve itself in its health that much. The hedonist does not value healthy living and enjoys life without limits, and is not prevention-oriented (Smet & Rogiers). The hedonist consumer group lacks health references and, as a result, lack appropriate health information but can find it over the internet. Another health consumer group, the health experts, creates rewarding relationships with health providers, combines exercise and health, hates sickness, and is highly involved in their health (Smet & Rogiers). Health insurance providers must understand the types of healthcare consumers for them to design appropriate insurance plans.
In seeking to open up in Saudi Arabia, I believe Bupa should focus on the healthy laidback group as the main healthcare customer group. As described above, the healthy laidback focus more on prevention than cure. By targeting this group, Bupa will access a client base that minds about its health and seeks prompt medical services when in need. The healthy laidback will embrace Bupa since it will protect them against health issues and motivate them to seek medical services whenever health issues pop up.
Marketing Environmental Analysis
External Environmental Analysis
Business Environment Analysis. The Saudi Arabian healthcare business environment keeps growing tremendously as its government implements key changes to improve healthcare delivery. However, internal and external factors contribute to the Saudi Arabian healthcare business environment’s growth. The growth factors include internal economic reforms, the private sector’s increased involvement, improved foreign investment, pilot projects to improve primary care, the market expansion for branded and generic healthcare products, and increased labor productivity. For instance, Saudi Arabia moved up the Social Capital Index Order from 26th position to 10th (U.S.-Saudi Arabian Business Council 8). The Social Capital Index Order movement showed that Saudi Arabia continuously embraces social and cultural change, and this change favors foreign investment. Bupa can take advantage of Saudi Arabia’s changing social and cultural platform to embrace the country’s healthcare market and offer market products suiting its people’s social and cultural needs. However, for Bupa to penetrate this market, it has to carry out a market analysis to establish favorable social and economic conditions for its operation in the country.
Saudi Arabia’s economic reforms have changed its business platform to attract Foreign Direct Investment (FDI). For instance, the country’s government strategized ways to limit economic dependence on the public sector, increasing private and public participation to create room for an economic revolution (U.S.-Saudi Arabian Business Council 7). Saudi Arabia is on the path to fully achieve these economic reforms through the public sector’s role in planning, supervisory, and regulatory roles. The country instituted various changes in the healthcare sector to improve its position in its economic revolution. Presently, the Saudi Arabian healthcare business environment supports the local manufacture of pharmaceuticals, improving life expectancy to between 74 and 80, private sector coordination to help the government achieve 2030 goals, increase the number of licensed medical facilities and qualified nurses, and create space for private medical insurance to thrive (U.S.-Saudi Arabian Business Council 8). The economic reforms witnessed in Saudi Arabia highlight the country’s commitment to improving its healthcare economy. Bupa can thrive if it delves into the Saudi Arabian market by preparing its insurance products to fit the country’s healthcare needs and emerging trends.
Saudi Arabia understands the role politics and institutions play in improving its business environment. The Saudi Arabian government introduced healthcare sector structures and regulatory practices to make the environment attractive to local and foreign investors. For example, through the Saudi Arabian Ministry of Health, the country underlined its commitment to monitoring health institutions, investing in healthcare training, and governing public and private institutions (U.S.-Saudi Arabian Business Council 11). Apart from healthcare economics, Saudi Arabia set up regulatory and legal institutions to control the healthcare sector. Some of the institutions playing a significant role in improving Saudi Arabia’s healthcare sector through political, legal, and institutional controls include the Saudi Commission for Health Specialists (SCHS), the Saud Food and Drug Authority (SFDA), and the Saudi Arabian General Investment Authority (SAGIA) (U.S.-Saudi Arabian Business Council 11-12). The existence of regulatory bodies in conjunction with monitoring practices highlights Saudi Arabia’s healthcare environment and its commitment to supporting organizational prosperity.
Technologically, Saudi Arabia’s healthcare environment supports research and innovation. Some of the country’s institutions ensuring that the country’s healthcare environment thrives technologically include the National Science, Technology, and Innovation Plan (NSTIP), which has functioned since 2002. The body’s mandate includes planning research programs, devoting funds to nanotechnology, biotechnology and medical research, and leveraging product local and international healthcare product commercialization (U.S.-Saudi Arabian Business Council 22). Through the body and others, Saudi Arabia continuously integrates technology into its healthcare sector, believing that this integration plays an integral role in building its medical platform to support product innovation.
Customer Analysis. Generally, the Saudi Arabian consumer holds a strong buying power, positioning them to access health services when in need easily. According to statistical analyses, Saudi Arabia grew its Gross Domestic Product (GDP) from $39,882 in 2000 to $48,908 in 2019 (Santander). The surge in GDP also highlighted the growth in individual monthly incomes for Saudi Arabian families. An analysis of Saudi Arabia reveals five key categories that this consumer belongs. Some of the identified Saudi Arabian consumer categories include brand savers, savvy consumers, multi-channel buyers, selective spenders, and discounted converts (Santander). Given that the Saudi Arabian consumer divides into various notable categories, new entrants into the country’s healthcare sector can utilize this categorization to their advantage. New entrants such as Bupa can develop customized products to meet the needs of unique consumer categories. In Bupa’s case, it can generate various health insurance products fitting each category’s needs. When selling these products to the Saudi Arabian consumer, each consumer will feel connected to some product, prompting them to buy.
Competitor Analysis. The Saudi Arabian health insurance industry has boomed due to its growth and the emergence of the private sector as a key player. The Council of Cooperative Health Insurance analyzed the Saudi Arabian health insurance statistics. The organization pointed out that approximately 1,326,310 contribute to health insurance policies as employees, about 4,987,410 non-Saudi nationals pay health insurance premiums as employees, and in total, about 9,769, 198 individuals comprising of the employed and the self-employed contribute to health insurance policies (Council of Cooperative Health Insurance). Despite this high number of people contributing to health insurance policies in Saudi Arabia, only a few health insurance companies operate in the country. Specifically, 25 health insurance companies offer health insurance policies to Saudi Arabians. Insurer companies operating in Saudi Arabia include Tawuniya, Med Gulf Arabia, and Bupa Saudi Arabia (International Student Insurance). All insurer companies operating in Saudi Arabia operate under regulator conditions but offer unique products depending on market conditions.
Health insurance in Saudi Arabia depends on the financial stress arising from unbearable medical bills due to illnesses or unexpected events such as injuries and accidents (Business Wire). Insurance companies provide unique products depending on target market needs. Critical factors influencing health insurance product goals, marketing strategies, and goals include the growing population, lifestyle diseases, and healthcare infrastructure (Business Wire). The nature of the health insurance market in Saudi Arabia proves that new market entrants can succeed provided they customize their products to align with health insurance seekers.
Internal Environment Analysis
Current Marketing Mix: The 7Ps of Marketing
For Bupa to penetrate the Saudi Arabian Market, it needs to customize its products to align with the 7Ps of marketing. Aligning products to the 7Ps will ensure product competitiveness in a new market (Business Queensland). The 7Ps of marketing include product, price, promotion, place, people, process, and physical evidence, as analyzed below.
Product
Identifies features, advantages, and benefits and their styling to meet target customer needs. For Bupa to penetrate the Saudi Arabian healthcare industry, it needs to design its insurance products to compete with existing competitors such as Med Gulf. However, Bupa must convince the Saudi Arabian health policy payer why they should switch from their current product or why they should choose Bupa over its 25 competitors.
Price
The price must consider how much clients can pay or are willing to pay and the profit margin after deducting all expenses. Bupa will need to consider the Saudi Arabian GDP and how much health policyholders pay or are willing to pay. This consideration will help Bupa set the best price that benefits its customers and makes economic sense to the organization.
Promotion
Activities, such as sales tactics and directing marketing activities impact the product. As a new entrant in the Saudi Arabian health insurance industry, Bupa will need to market itself to be known to people. The company must also sell its cutting edge to improve its market penetration. Some promotion strategies that can sell the company quickly include direct marketing and advertising.
Place
Determines where customers can access products. As a new entrant in the Saudi Arabian health insurance arena, Bupa will need to locate its products strategically for customers to access them easily. The organization can use website services to enhance quick reach and search.
People
The people involved in marketing a product/service include employees, the organization itself, and other stakeholders such as the owner. Bupa will need to employ marketing executives and design its business in a way that employees will form a positive relationship with customers.
Process
The routine that customers use to access goods/ services to maximize efficiency and save time. Bupa must stick to a single yet successful business process for delivering its products to customers. The single strategy will play a significant role in furnishing the relationship between customers and the organization’s products.
Physical Evidence
The aspect entails the business’ physical location, packaging, branding, and layout. Given that Bupa will operate in an already saturated health insurance marketplace, it will need to package its products to attract customers. The packaging will include tying unique benefits and advantages to its health insurance policies to sell to a broader customer base.
Current Marketing Mix Effectiveness
Bupa will need to use a marketing strategy to meet the needs of its potential customers. However, it will need to identify the strengths of this marketing approach and identify methods to integrate it into its business model. The 7Ps of marketing identified above, including product, price, promotion, place, people, process, and physical evidence, combine to set organizational objectives and perform its competitive analysis. Before delving into the Saudi Arabian market, Bupa will need to carry out a SWOT analysis to determine its strengths, weaknesses, opportunities, and threats that will influence its market penetration and competitive advantage.
The 7Ps marketing mix will also help Bupa identify a market entry strategy and its implementation process to meet its business objectives. By employing the 7Ps marketing mix, Bupa will create a unique approach to market it, give it a cutting edge, and ensure its prosperity in the long run. The 7Ps marketing strategy will also help Bupa implement a business strategy that meets mutual interests. For instance, while the organization will benefit from its health insurance products, Saudi Arabian health policy buyers will access products that meet their needs and protect them from the stress of unbearable medical bills. Bupa will also benefit from the 7Ps marketing mix. It will identify and implement a market entry strategy using available resources and customized to meet client needs in a unique yet fulfilling way.
SWOT Analysis
Saudi Arabia rolled out mandatory health insurance for the public sector and private sector employees. The rollout increased the number of health policy buyers seeking insurance services. With the number of the insured growing and many more seeking health insurance services, the Saudi Arabian health insurance market seems to proliferate (Global Health Exhibition 4). New health insurance companies and the already operating entities can take advantage of the market to gain market advantage and increase their position. The new Saudi Arabian health insurance regulations promise to increase the number of health insurance buyers (Global Health Exhibition 4). Additionally, the increasing health insurance awareness among locals and foreigners in Saudi Arabia translates to growing consumption, strong market direction, and an expanding number of health insurance providers. Presently, Saudi Arabia also regulates the health insurance industry, and new entrants must conform to these regulations to gain access to the more than 10 million health policy buyers.
The Saudi Arabian also introduced a host of measures to control and grow its health insurance industry. Some of the introduced measures included:
- Compulsory actuarial ratings and reporting
- Continuous oversight
- Senior staff must be qualified for insurance
- Doctors in the insurance industry must register with the Saudi Arabian Ministry of Health
The country also introduced an array of changes to see the growth of the health insurance industry, including:
- Embed foreign nationals and domestic workers into the health insurance network
- Privatize the health insurance sector
- Utilize value-added benefits and enhanced benefits
- Fostered consolidation among health insurers
- Improved accountability of care
- Centralized Pharmacy Benefit Management Module
Based on the current Saudi Arabian health insurance industry status, Bupa’s entry into this market will depend on the following SWOT analysis.
| Strengths
– Competitive products covering all types of health insurance customers – Wide array of health insurance products – Success in all its current operating locations – Strong brand name due to its global success – Market experience over the years – Perfect market entry strategies |
Weaknesses
– Lack of experience in the Asian/Arab market – Business model suiting European and American markets |
| Opportunities
– Open market, allowing competitive health insurance to operate – Demand for innovative and competitive health insurance products – A growing number of foreign workers in need of insurance policies – High GDP, which allows customers to spend |
Threats
– Already saturated market, given the high number of existing health insurance providers in Saudi Arabia – Strict market entry requirements that may make the organization take time to settle – A small number of new customers |
Through this SWOT analysis, it is evident that BUPA needs to plan its market entry into the Saudi Arabian market carefully. One of the ways through which the company can establish a basis for entering the market relates to an extensive market research to establish the relationship between market entry requirements, market viability, and Return on Investment. The procedure will allow the insurance company to maximize on its opportunities and strengths and work on the market’s threats and weaknesses.
Bupa’s SWOT analysis reveals that it can penetrate the Saudi Arabian market if it customizes its wide array of products to suit this new market. Additionally, Bupa’s experience in the health insurance industry will see it easily penetrate the Saudi Arabian market provided it customizes its business model to suit the Asian market and strategize ways to deal with threats, including the saturated market due to the high number of existing operators. Overall, Bupa stands a chance of succeeding in the Saudi Arabian health insurance industry if it cautiously and intelligently approaches the market.
Future Growth Opportunities
Bupa can use the product or the market expansion grid to look into the future and explore growth opportunities. As shown in the figure below, there exist four strategies that Bupa can use to grow in the next three to five years.
|
Existing Products |
New Products |
|
|
Existing Markets |
Market Penetration |
Product Development |
|
New Markets |
Market Development |
Diversification |
All the product or market expansion strategies, including market penetration, product development, market development, and diversification, can improve a business’s prospects going forward. However, Bupa can use the market penetration approach successfully compared to the other three. Having been in operation for decades and functioned in modern, developed markets such as in the United Kingdom, the United States, Spain, and Ireland, Bupa can customize the already successful business models to penetrate the Saudi Arabian market. Bupa will seek to grow its market share by finding new customers in the Saudi Arabian market and adapting its products to suit established customers’ needs.
Revised Objective and Marketing Strategy
After establishing in the Saudi Arabian market, Bupa can revise its objectives, target market, positioning, marketing mix, and action programs to suit changing market conditions within the next twelve months as identified below.
Objectives
- To increase sales/revenue, develop brand loyalty, and target new customers
- To focus on higher return on investment, revenue growth, and diversified revenue base
- To improve brand awareness through communication, convey knowledge to customers about new and existing products, and improve organizational harmony to enhance focus and movement in the same direction
- To create a sustainable business in Saudi Arabia that will transform the country’s health insurance sector and breed ground for fair and quality competition.
- To establish a long-term business focused on offering health insurance services through the right channels and using adequate and appropriate resources.
Target Market
As a new entrant into the Saudi Arabian health insurance industry, Bupa will seek to capture new employees, both local and expatriate. The insurer will also target startups and offer them the benefits of insuring their employees with Bupa. However, before delving into this market, the company will explore the probability of success and whether the market contains a blue ocean that it can explore. The target market should also be able to offer opportunities for future growth. As a result, the company will study the insurance products that already existing companies offer and the probability of redesigning them to enhance the success of the new entrant. Acquiring this information will help Bupa establish long-term sustenance and to come up with long-term business objectives.
Positioning
Offer competitive prices relative to other insurers, high-quality insurance plans, and associating Bupa’s products with insurer transparency and accountability
Marketing Mix
Product: Develop insurance policies suiting the Arabian market conditions. Without the creation of these products, Bupa will experience a rocky entry into the market and the rocky relationship between the company’s products and clients may see the company wind its business in the country early than expected. Customer should also be able to establish the products’ benefits openly and without requiring expert analysis.
Price: Offer competitive prices for quality products. Pricing is one of the major factors that shape a product or service’s movement. Bupa will consider the cost versus the benefit of each product and service and use this information to offer competitive prices. However, the company must understand that low pricing may discourage clients while exorbitant prices may scare them away.
Promotion: Use referrals to increase customer base. Some of the conventional promotional methods include referrals and word of mouth. Bupa will use referrals since customer testimonies influence brand awareness.
Place: Increase online presence. The company needs to establish its presence online since technology now plays a great role in the way companies reach their target audience. An online presence will present the company to customers for analysis and scrutiny.
People: Recruit, train, and hire Saudi nationals to improve our cultural sensitivity and closeness with customers. Bupa believes that as a foreign company seeking to explore the Saudi Arabian health insurance industry for the first time, it will need guidance to understand is new customers. As a result, the company will pick various Saudi nationals to guide it from scratch and help establish a strong basis for establishing its existence and position in the industry.
Process: Focus on quality and accountability. Bupa will fail to kick off its operations in the Saudi Arabian health insurance industry if it disregards the importance of accountability in its process. As a result, in this marketing mix, the company will establish accountability measures to support its goals and realize its objectives.
Physical Evidence: The use of testimonials to convince customers. The company will use testimonials and other forms to establish its physical presence in the country. Through this establishment, clients will be convinced that the company will say for a long time if not forever and thus, trust its products and services.
Action Programs
| Month | What to do | Objective | Who |
| Aug 15 to Nov 30 | Bupa will focus on developing quality products to suit the new market. | Quality products for quality customers | The marketing team |
| Dec 01 to Dec 31 | In fulfilling the overall marketing strategy’s objectives, Bupa will identify a marketing research team to assess market conditions, establish market changes, and point out the relevant actions and improvements on its products to meet customer demands. | Market research | Operations Department |
| Feb 01 – | The organization will spare 2% of its total annual revenue to conduct market research to improve delivery | Investment | Finance Department |
Works Cited
Bupa. “Our Organization: Our Business Model.” https://www.bupa.com/corporate/who-we-
are/our-organization. Accessed 13 February 2021.
Business Queensland. “The 7Ps of Marketing.” Queensland Government,
https://www.business.qld.gov.au/running-business/marketing-sales/marketing-promotion/marketing-basics/seven-ps-marketing. Accessed 13 February 2021.
Business Wire. “Saudi Arabia’s Health Insurance Market 2019-2024: Leading Players are Bupa
Saudi Arabia, Tawuniya and MedGulf Arabia – ResearchAndMarkets.com.” 15 April 2019. https://www.businesswire.com/news/home/20190415005376/en/Saudi-Arabias-Health-Insurance-Market-2019-2024-Leading-Players-are-Bupa-Saudi-Arabia-Tawuniya-and-MedGulf-Arabia—ResearchAndMarkets.com.
Council of Cooperative Health Insurance. “Health Insurance Indicators.”
https://www.cchi.gov.sa/en/Pages/default.aspx. Accessed 13 February 2021.
Global Health Exhibition. “2019 Saud Arabia Healthcare Industry Overview: Towards the
Healthcare Goals of Saudi Vision 2030.” Accessed 13 February 2021.
International Student Insurance. “Health Insurance in Saudi Arabia.”
https://www.internationalstudentinsurance.com/saudi-arabia-student-insurance/health-insurance-in-saudi-arabia.php. Accessed 13 February 2021.
Santander. “Saudi Arabia: Reaching the Consumer.”
https://santandertrade.com/en/portal/analyse-markets/saudi-arabia/reaching-the-consumers. Accessed 13 February 2021.
Smet, Beverly, and Vladimir Rogiers. “The 4 Health Consumer Types and their Behavior.” Cell
for Pharma, https://www.celforpharma.com/insight/4-health-consumer-types-and-their-behaviour. Accessed 13 February 2021.
U.S.-Saudi Arabian Business Council. “Healthcare and Medical Sector: Overview and
Commercial Prospects in Saudi Arabia and the United States.” April 2017. Accessed 13 February 2021.
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