An analysis of the effect of business model on business performance: case of Cellmed Health Insurance.

Abstract

The research evaluates the current business model employed by Cell Medical Insurance (CellMed) company in Harare. The plummeting revenues of CellMed and shrinking of the customer base over the past years prompted the researcher to carry out the study. The major objective of the study was to evaluate the current business model used by CellMed on company performance. A mixed method research design was adopted, with a pragmatism research philosophy. The target population in this study were CellMed insurance companies’ Harare branchemployees which population size was 199. Both probabilistic and non-probabilistic sampling methods were employed. A sample of 132 was drawn. Questionnaires were used on 121 non-managerial employees. Interviews were carried out on eleven managers. The two instruments were used in order to improve data triangulation. It was found that CellMed uses an unwritten down business model that approximate the canvas model, with elements of customer segments, key resources, revenue streams, cost structures, distribution channels, key activities, key processes, value propositions and key partners. Results showed that CellMed is doing poorly on most of its business model’s components. It was recommended that CellMed sets itself in a position to exploit its resources. Also, CellMed was recommended to incur most of its costs on investment activities rather than expenditures. Also, CellMed was recommended to segment its market and identify niche markets in which it can concentrate and deliver value, among other recommendations. Future research recommended to employ different methodologies and to carry out studies in different industries and to develop new business models that health insurance companies can adopt.