Essay Example - Vitality Venture's Business Model

Published: 2023-08-21
Essay Example - Vitality Venture's Business Model
Essay type:  Quantitative research papers
Categories:  Leadership analysis Company Business
Pages: 2
Wordcount: 474 words
4 min read

Vitality’s venture provides a shared-value insurance model that provides a behavioral platform where insurers and other companies that offer financial services can access vitality (Vitality International, 2017). The model is suitable for the company because it measures engagement actuarially and clinically, allowing for dynamic pricing of morbidity and mortality in line with the existing financial and health risks. The model is suitable for the insurer, the society, and the clients.

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Strengths and Weaknesses of the Model


The model creates value for customers by improving society’s health, productivity, and reducing the healthcare burden.

It provides enticing payments by improving the members’ health and providing better values by improving product prices and benefits (Teece, 2010).

It converts the payments from the members in the form of claims to profits for the insurance companies. The healthy lifestyle fostered by Vitality lowers claims from the insured population, hence increasing the profit margins, providing positive selection, and lower lapses (Teece, 2010).


Difficulties in implementing the model in other markets where employees believe that their wellness programs should be run separately from their health insurance coverages to mitigate any employee concerns on their privacy.

Limited education in newer markets that would result in longer than required time to close a sale and maximize profits.

High initial costs to provide a robust and scalable infrastructure in a new market resulting in risky numbers and sales cycle times.

A Proposal for Improvement

Vitality’s venture challenge and opportunity for improvement would lie in its revenue streams. It can capitalize on the use of technology to enhance customer engagement while alternatively increasing its revenue stream. They should incorporate technology with its historical exponential view to realize its benefits, as opposed to the intuitive linear view that underestimates its potential in growing the business (Kurzweil, 2001). While incorporating the appropriate technology, Vitality can blend with a razor and blades model in its business model as a way to increase its revenue streams and enhance its customer relationships in both existing and new markets (Kelley and Brown, 2015). It can do this by decreasing the costs of its services of products designed to enhance a healthy lifestyle among its patients, i.e., the apple watches while considerably increasing the sales of its contemporary products or services, i.e. those that would enhance the healthy lifestyles of the patients. In this case, the low-cost health insurance would serve as a ‘loss leader’ for the profit-driving variable elements (calorie exercises and manuals, personal trainers or training gadgets etc.)


Kelley, D. & Brown, T., 2015. The Explainer: Design thinking. Harvard Business Review. Available at

Kurzweil, R., 2001. The law of accelerating results. available at

Teece, D., 201). Business models, business strategy, and innovation. Available at

Vitality International, 2017. The global study recognizes the impact of the vitality insurance model. Available at

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