Assignment Task: USI Vietnam Case
Company Background
In 2001 the US Insurance Corporation (USI) was founded by Mr. Zig Ziglar and has served the ever-changing needs of millions of people across North America. As with all insurance companies, USI depends on a strong sales team with great sales people selling their product. Mr. Ziglar is a fantastic sales person and believed that sale people needed to be self-sufficient and individually managing their own sales. The immense success of USI really is based on how Mr. Ziglar inspired the sales people to achieve sales.
He set up their compensation program based on this key idea where individual sales people are rewarded greatly for their sales. He emphasized results and placed great value on the number of contracts that were signed and the amount of money a sales representative generated for the company. If a sales representative signed many contracts with customers and brought in a large amount of money, they were well rewarded as the commission structure was very generous. However, if a sales representative couldn't sell much, they wouldn't last very long in the company because the base salary was quite low and there was little support for individuals like this.
Entry into Vietnam:
In 2021, USI entered Vietnam because Mr. Ziglar visited the country and liked it. He thought it looked like a nice place and a lucrative market, so he rapidly formed USI Vietnam. They opened their first office in the most populous city, Ho Chi Minh City, just 3 months after Mr. Ziglar visited the country. They also have aggressive plans to expand to Hanoi and Danang in the next 6 months. Responsible for the market entry is Mr. Anthony Tran, the Country Manager of USI Vietnam.
USI Vietnam has the goal of protecting the financial prosperity and safety of the Vietnamese people, and aims to be one of the top life insurance companies in Vietnam. It has invested significant financial resources into public relations and marketing and has raised awareness about the brand. Consumers have started to call to inquire about their products.
However, USIVN has joined a very competitive market with companies like Manulife, Daichilife, BaoViet, all of whom have much more experience in the Vietnamese market regarding how they manage their employees. While the PR and Marketing has made the USI Vietnam's brand name known to consumers, their sales staff have not been able to sell many insurance policies to the consumers who call. Their management of their staff has not been very strong and there seems to be a mismatch in how the Vietnam offices work compared to the home office's expectations in the USA.
Under pressure from Mr. Ziglar to open the Vietnam office quickly, Mr. Anthony, has taken all the sales processes, policies and procedures from the US home office and implemented them exactly the same way in Vietnam. The Ho Chi Minh City Office was opened within 3 months, which is very quick. In retrospect, he feels like the US home office could have analyzed the Vietnamese market better before rushing in. Additionally, while the US home office places high value on individual results/outcomes and aggressiveness in their sales tactics, these key success criteria don't seem to translate well to the Vietnam office.
Staff Comments:
Mr. Anthony had an open call to hire sales representatives where over a hundred applicants came to the USI Vietnam office. They all signed up to become sales representatives, but only two lasted and are still with the company. Mr. Trung, one of the successful sales representatives, said, "It's great working here. I can make a lot of money. I basically make as much as I can sell and I sell a lot. I make double here compared to my old sales job." The other successful sales representative, Ms. Phuong, said, "I really enjoy working here. I have freedom and choose my own working hours. I also have a really strong network of acquaintances, so that helped me make a lot of my sales."
While these two Sales representatives were doing very well, the fact that none of the other representatives stayed with the company for the longer term is a major concern for Mr. Anthony, so he interviewed a few of the people who quit. Ms. Ngan, a young lady fresh out of university, said, "It's a very motivating job because the commission is very good. That is why I signed up, but I'm just not a great sales person. I wish I could have learned more about how to sell."
Mr. Phuc, who used to work in a restaurant, said, "I'm used to working in a team. I think many of us are very collective, so working by myself was tough. I couldn't make the adjustment quick enough." One other comment came up time and time again, which was the base salary was not enough for the new sales representatives who didn't know how to sell, so they had to quit before they could learn how to sell. Some of the applicants also complained that they didn't know what they were getting into and the expectations of the job could have been made clearer.
After interviewing the sales representatives, Mr. Anthony noticed that there was a disconnect between the US home office's expectations of the sales staff and most of the Vietnamese applicants. He was further concerned about expansion, because the attitudes of Vietnamese people also differ between the North, Central and southern regions.
What should Mr. Anthony do?
Tip: This case study is related to the following Introduction to Management course topics: Environment, Organisation Culture, and Human Resource Management.
Analyse the case study using the following structure:
Case Analysis: Analyses the case identifying the key issues and/or problems. Identifies problems using evidence from the case plus theories and concepts
Linking theory and practice to the solution: Develops a solution to the issues or problems. Justifies the solution with evidence, management theory, approaches, concepts and/or models.
Recommends specific strategies to accomplish the proposed solution.