Lincoln Financial Group (A) Harvard Case Solution & Analysis

Lincoln Financial Group (A) Case Study Solution  

For instance, the distributors themselves have started to manufacture financial products, such as the banks which initially offered certificates of deposits and savings accounts.However in 2000s, the banks started selling various products, including: insurances, annuities, brokerage services and mutual funds. The availability of a wide range of financial products have create an available of numerous alternatives for the distributors, as a result of which, the best  alternative is selected by the distributors for their offerings, resulting in an extremely low shelf space for LFG’s products and services.

The company has two alternatives which are: either to continue with the current distribution model or to adopt a new LFD model, whereby the distribution of the financial products and services will be managed by the company’s owned distribution channel. Continuing the existing strategy would not be a fruitful opportunity because of few reasons:

First of all, the needs and wants of the company’s customers are not properly met. The distributors are eager about the information related to the products and services, so that the product could be sold to the right customer. The continuation of existing distribution strategy requires a more coordinated approach. The disadvantages of continuing the existing strategy involves the absence of changes in the products and services because the LFD approach would enable the company to generate new products, helping to attract more customers and to grab the market share. The strategy would also lead towards customer dissatisfaction and there is a risk of losing the market share.

On the other hand,LFD is a great initiative offered by the management as it tends to enable Boscia to achieve the customer intimacy strategy. Moreover, it would change the negative views regarding LFG’s distribution, as the MGAs are not much satisfied by the compensation plan offered by the company and with the coordination level between the Lincoln manufacturing companies. In addition to this, the wholesale quality was not standard in different business units, which now are organized by the adoption of the new distribution structure.

The LFD model fits better with the customer intimacy model, according to which, the customers should be given information about the products and services, so that the financial advisors can persuade the customers to invest in the funds. The LFD model would help the customers to identify the right products for the right market, thereby leading to solution and quality sales. The centralization of the aggregate distribution system would help the company in achieving the desired profitability levels andit would also enable the company to reduce its costs through attaining the economies of scales.

Strategy Pros Cons
Existing Strategy ·         Lower marketing and distribution efforts by LFG.

·         Low costs of distribution.

·         Large access to customers through clientele network.

·         Negative perception in clients’ regarding LFG strategy.

·         Dissatisfied whole sellers and MGAs.

·         Reduced market share and profitability levels.

·         Low shelf space.

·         Extreme reliance on the client based distribution.

·         Less control over the distribution


Lincoln Financial Distribution (LFD) ·         Fits with customer intimacy model.

·         Helps in delivering quality based services.

·         EnablesLFG’s control over distribution.

·         Enhanced profitability.

·         Right product at right time to the customer.

·         More shelf space.


·         More centralized business units.

·         Greater distribution efforts and costs but fruitful.


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