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.