The effects of blue ocean strategy on organization performance: A case of liaison group insurance brokers.

ABSTRACT

In Kenya, over 75% of insurance companies employ red ocean strategies to outperform competitors and acquire many customers in the existing insurance market. Only less than 10% of insurance companies have attempted to implement blue ocean strategy by offering new insurance services in the target market and thus successful implementation of Blue Ocean strategy remains as a major hindrance to the growth and development of the insurance industry in the country. The main objective of the research study was to investigate the effects of blue ocean strategy on organization performance in Liaison Group Insurance Brokerage. The study specifically aimed to; establish the effect of strategic leadership in Liaison Group Insurance Brokerage on organization performance; assess the effect of core competencies in Liaison Group Insurance Brokers on organization performance and determine the effect of organizational structure in Liaison Group Insurance Brokers on organization performance. The study population comprised of a total of 180 employees working at Liaison Group Insurance Brokers offices situated in Nairobi. The study adopted a probability sampling design by applying a stratified random sampling technique to select a sample size of 54 respondents. Questionnaires were used as the major data collection instruments and they were self-administered to the respondents in the sample size. A pilot study was undertaken to pretest the questionnaires for validity and reliability. The gathered data was analyzed using descriptive statistics and inferential statistics aided by Statistical Package for Social Scientists (SPSS). The findings were finally presented using tables and charts. The study is of significance to management of insurance brokerage firms, strategic managers and scholars since it will extend the knowledge base on the effects of Blue Ocean Strategy in on organization performance in Insurance firms in Kenya, A case of Liaison Group insurance Brokers. The concept of blue ocean strategy is relatively new to the majority of insurance companies in Kenya and the obtained findings will help to raise awareness among insurance managers unacquainted with the potential applications and benefits of blue ocean strategy in insurance industry. The study found out that absence of strategic leadership amongst the top management staff hampered implementation of blue ocean strategy in the organization and this negatively affected realization of increased organization performance. The study drew conclusions that, the major factors affecting implementation of blue ocean strategy and organization performance includes lack of strategic leadership, weak core competencies and application of poor organizational structure. The study recommendations were; recruitment of top managers with the ability to express strategic vision for the organization, motivate and persuade others to acquire that vision; recruitment of competent and professional trained staff on insurance matters and implementation of an effective organizational structure that support monitoring and coordination of blue ocean strategy implementation activities.