Business Strategy

                 Porters Five Forces Industry Model

Developed in 1979, Porter’s five forces model is used to asses an industry structure and it lists the following 5 industry profitability competitive forces: bargaining power of customers, threat of substitutions, bargaining power of suppliers, threat of new entrants and rivalry. The industry characteristics, how profitable it is, and how feasible that profitability will be is determined by the strength of each of the 5 forces.

Bargaining Power of Customers (Medium)

Bargaining power of customers determines how much of an impact customers have on a business. For AIG, bargaining power of customers is Medium, An individual doesn’t possess much power over this industry. However, large corporate clients hold a lot more bargaining power with insurance companies due to the large premiums they pay every year.

Bargaining Power of Suppliers (Low)

Bargaining power of suppliers determines how much of an impact suppliers have on a business. For AIG the suppliers of capital do not pose much threat. Although AIG did have problems and needed government assistance for capital, they are the second Largest Insurance firm owning the most capital.

Threat of New Entrants (Low)

Threat of new entrants determines if a new competitor can enter the market easily. However, for the insurance industry it is very hard for an average entrepreneur to start an insurance company. Smaller companies have to focus on niche areas of the industry or they won’t stand a chance against bigger companies.

Threat of Substitutes (Low)

Threat of substitution is low. It is law in most states to have insurance and one of the biggest necessities a consumer needs.

Rivalry (High)

            
              The difference between one insurance company to the others is very minimal. The company who utilizes low cost structure, greater efficiency and customer service holds a competitive edge. 

Value Chain

The Value Chain for AIG comprises of numerous exercises all through their course of operations that look to increase the value of the association. For inbound logistics, AIG imports its equipment from its supplier. For instance, as a piece of their inbound logistics they consistently get equipment and different segments expected to bolster their operations. This leads us to the Operations bit of their cycle. The operational side of the organization are the choices that are made day by day in every business area of the organization utilizing the equipment that is proper. For Outbound Logistics, AIG will have every one of the administrations they can give set on certain equipment's between every office. From that point once a request is put, AIG will continue to unite administration to its clients. From a Sales and Marketing point, AIG permits requests to be places two ways. That is by telephone, and in addition the web, by method for their own particular site. As innovation is quickly changing AIG is attempting to do likewise, attempting to business sectors its items in more creative routes, by utilizing online networking, going to exchange appears, and giving information of administrations to imminent clients. For Customer Service, AIG houses a staff of qualified workers helping and guaranteeing consumer loyalty, which is their number one need.

Business Process

 A Business Process is a gathering of exercises that when finished, produce a decent or administration that increases the value of both the client and association. AIG executes an Enterprise Resource Planning (ERP) framework, which associate the greater part of their operations. The procedure we will be concentrating on is their request satisfaction.The nature of Business for AIG is complicated it will be considered a dynamic process. There are set rules for what claims should be adjusted or given to certain people, but the nature of the business calls for constant informal decisions, and has to be adaptive to the certain customers who look for insurance with AIG. The scope process AIG uses is an Inter-enterprise that is used by multiple departments to keep everyone on the same page within AIG and other 3rd parties involved. Inter-enterprise information systems support one or more inter-enterprise processes. An example of inter-enterprise IS used by AIG is Qlikview, which is used by multiple departments in AIG to build dashboards. AIG should have an inter-enterprise IS because inter-enterprise processes are abundant in the company.