Strategic Management - Porter's Five Forces Framework

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INTRODUCTION:

WNS (Holdings) Limited (NYSE: WNS), is a leading global business process outsourcing company. WNS offers business value to 200+ global clients spanning industries like Travel, Insurance, Banking and Financial Services, Manufacturing, Retail and Consumer Packaged Goods, Shipping and Logistics, Healthcare and Utilities. WNS delivers an entire spectrum of services such as finance and accounting, customer care, technology solutions, research and analytics and industry-specific back-office and front-office processes.

The continuous focus on the partnership approach with the clients and high quality of service delivery is reflected in the broad strategy as defined in the mission statement of WNS – “We enable Clients to Outperform with our Passion for Service and Innovation”. A set or organizational values defined as CIRCLE (Client First; Integrity; Respect; Collaboration, Learning and Excellence; act as the enablers in working towards the long term goal and strategy.

WNS Service Offering - Overall

WNS’s outsourcing business offers a huge plethora of outsourcing option to its clients ranging over all the customer service and back end channel operation. These service offerings can be categorized into two broad spectrums namely cross industry solutions and Industry focused solution.

Verticals or strategic business units form a key strategy for any firm’s growth and movement. WNS follows the same structure for efficient management of the service delivery and growth. The company moved from the growth strategy of inorganic growth through acquisitions (till 2008) and is now focused more on the organic growth of business.

In April 2011 WNS re-organized its offerings into various business units. WNS invested in forming new verticals (Shipping & Logistics and Healthcare) adding to the previously existing set of 4 verticals or SBUs namely Travel, Insurance, Banking & Financial Services, Retail and Consumer packaged goods.

This has helped WNS to provide an increased focus on the customized service offering to the clients. These verticals or Strategic business units also helps deliver on the expansion strategy of WNS in a more focused manner.

Porters Five Forces Framework Study

For the purpose of this study, the Porter’s five forces model is used to analyze the potential profitability of Insurance vertical as a key strategic business unit (SBU) of WNS.

Insurance vertical is one of the key strategic business unit and highest revenue generating business unit of WNS. The focus on Insurance industry for WNS got a major boost with the acquisition of Aviva operations in the year 2008.The Insurance vertical of WNS contributes to 60.1% of the total revenue (as on March 2011) amounting to a total of $370 million.

WNS offers an end to end customer service and back office solution for the Insurance companies. WNS combines deep domain expertise, strong talent and operational excellence to allow insurers focus on their core business while WNS delivers business processes such as industry specific processes, finance and accounting, business and financial research, analytics, and optimizing the power of technology.

Understanding the Client Environment

In an era with increasing competition for insurance sales, particularly from banks and other non-traditional sources, being efficient and effective in the use of all an insurers resources are essential. The challenges in terms of competitive pressures, changes in customer loyalty, entry of new players and a stringent regulatory environment, all of which are pressuring insurers to change their business models, streamline operations, and improve processes.

Porter’s Five Forces Framework

In the subsequent pages, the profitability of Insurance SBU has been explored by utilizing Porter’s Five Forces Framework.

Threat of New Entry

WNS outsourcing...
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