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IAI Actuarial Core Principles · Business Management · Communicating strategy; culture and structure in decision making; strategy case studies

Rohan, an actuary at Sahyadri General Insurance, is asked to evaluate a case where a rival entered the rural health market through partnerships with cooperative banks. His analysis shows the rival's success depended on the cooperative banks' existing trust with villagers, which Sahyadri lacks. What should Rohan conclude for the board?

Rohan should tell the board that the rival's success rested on a distinctive resource, trusted cooperative bank access, which Sahyadri lacks. Sahyadri should consider building or acquiring similar access before copying the move, rather than entering blindly or abandoning rural markets altogether.

  1. ASahyadri should enter immediately because the rival's success proves the market is attractive
  2. BThe strategy relied on a distinctive resource Sahyadri lacks, so Sahyadri should consider building or acquiring comparable access before copying itCorrect
  3. CSahyadri should drop all rural strategies permanently
  4. DThe case is irrelevant because the rival is a different company
  5. Sahyadri should hide the analysis to avoid discouraging the board

Explanation

The rival's advantage came from a resource not easily replicated. Sensible application means assessing whether Sahyadri can obtain similar access, not assuming the market alone guarantees success. Permanent abandonment overreacts, and hiding the analysis would be unprofessional.

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