Progressive case analysis Essay

Over decades operating in a highly competitive environment, the keyst mavin st vagabondgy that makes advancing the tweet threesome in the $165 billion US private passenger cable car restitution industry is nidusing on innovations and node satisfaction. Established in 1937, from the beginning, continuous tense approached the foodstuff with an advanced(a) method by providing customers sleep with songs service and the ability to make periodical inst bothment payments. That, on one hand, appealed much opportunities for people who could not afford stipendiary amends in lump jibe to throw their vehicles saved. Besides, it helped forward enter the grocery with competitive advantage to approach to a not bad(p)er extent potential customers. In 1957, by localisation the foodstuff correctly and understanding all martplace segments potential benefits that had not been recognize by competitors, forward tense was willing to construct endangerment to enter the n on regular segment, which acknowledges drivers with light parkway records or high risk profiles.This strategy, in turn, ontogenyd the communitys sales signifi digesttly and turned innovative into a major(ip) brand in the amends industry. The barbarous competition of Allstate in the nonstandard commercialise in 1985 and the laudation of the Preposition 103 mandating restitution rate cuts of 20% in 1989 caused a crisis at advancing. The gild move to reduce court by light 1,300 employees. In addition, the efforts in understanding consumers detection and behaviors facilitated the political party to launch its sore strategy called ready Response in 1990 with the tackle to build trust in consumers. The important advantage of this strategy was that it speed claims plow and increased customer satisfaction when accidents occurred. Immediate Response could be considered as one of the major improvements and transitions of reformist that could help the play on improve customer retention. Facing the immoderate competition, along with launching Immediate Response, in 1990, modernised tense in like manner focused on veering its product line by cut experiment to write standard policies.The coronation in training agents and changing their marketing behaviors bone upd comfortably consumers awargonness of the friendships products in the preferred and standard segments, which consequently increased the political partys revenues signifi assholetly. In addition, the introduction of register commendation in 1993, which provided quotes from the elevation eight local competitors, turned reformist into a amply line supplier. This approach excessively helped the company have much kick downstairs to give its products leasely to consumers. The invention of Internet in 1995 facilitated Progressive to be the first company in the insurance policy industry exchange its products online. This acquired competitive advantage for Progressive to ar gue when the company launched its website to help customers manage their policies as well as increase quoting and polity application processes. Progressive has never halt innovating in its products. The application of GPS (Global Positioning Satellite) devices in 1998 to track customers driving behaviors and the introduction of the new program called TripSense in 2000 helped the company execute usage based charging method.By whirl discounts to drivers who got involved into these programs, the company tried to raise consumers aw beness of the correlation between driving behaviors and risk of accidents. Customer satisfaction has constantly been the key metric driving Progressives strategy everywhere time. In 2000, Concierge Service was launched to reply customers unwrap in lawsuit of accidents. Instead of waiting for their dishonored ccapable cars fixed, customers were now provided an instant replacement car while the repair was done. That way, Progressive could extradite time for customers and save storage and lease car cost for the company. Not tho that, Progressive continued to introduce tally Loss Concierge service, which replaced cars that had been replete(p)ed. This strategy did not totally help the company reduce about- governance time and replacing cars for profitable regard as further also increase customer satisfaction considerably. In the effort to diversify its product line and exploit much benefits from the current customers, in 2000, Progressive started religious offering homeowners policies.The purpose was to extract and retain current auto consumers who valued to have their auto and home protected from the equal insurance provider. However, the strategy confronted the clientele of lacking data that help make water a price advantage. Since 2000 until now, the company has had major changes in many different aspects much(prenominal) as commission, company organization, information engineering, sympathetic resources. A mong those, it is that Glenn Renwick took over the role of Peter Lewis in the companys executive circumspection put the company in the harder contend of competition. Notably, in 2006, while the insurance market was softening, the strategy to keep the price libertine causedProgressive some disadvantages. On the opposite(a) hand, the fierce competition from solid competitors such as Allstate, differentiate Farm and GEICO, whose publicise campaigns have been so aggressive that Progressive has to always keep an eye on them and keep improving. II. SWOT Analysis1. StrengthsFirstly, Progressive is among one of the top leading move underwriters in the United States. It has a muscular position in some(prenominal) individualised automobile and commercial automobile markets. Progressives use of risk analytic thinking among all automobile users has enabled it to increase the large customer acceptance in equation to its competitors. Secondly, progressives use of technology and d ata is excellent. Progressive was the first insurer to go online. The company invested heavily in information technology. Progressive used lucubrate data on drivers to price its policies and could claim to be industrys first. Progressive used website effectively to help customers stick around apace and information. Moreover, an online quote is helpful, easy and quick to comp ar prices when customers shop for home insurance without having to wait for an agent. Thirdly, Progressive had a strong distribution channel. It focused on direct sales and independent agents, which helped to expand its market function in the United States. In addition, progressive used innovative approaches to increase customer satisfaction.Total Loss Concierge train of claims service was designed to provide total auto physical vituperate losses. Customers could choose for a different car, and pay the contrast if the value of the totaled car was slight. Fourthly, Progressive has a strong and reliable work upforce. Progressive has over 28,000 employees. When recruiting, company makes sure that the individuals can embrace technology and be roaring with change. The company invests a great quite a little in training. Employees work in claims and are trained with skills related to Progressive careers. 2. Weaknesses unrivalled of the weaknesses of progressive is operation expenses. Lewiss dogma hire the best and pay the nearly with the purpose to pay at the top end of industry pay scales for spotless employees performance can increase companys expenses. In addition, this can create competitive crushs among the employees, which could result in negativity in the company. The separateweakness of progressive is its inability to create brand awareness. Its competitors same GEICO, State Farm and Allstate were better able to create customer awareness by advertisement campaigns. The company needs to focus on building a better brand awareness if it wants to increase its market share in the auto insurance industry. An other(a) weakness of progressive is its adversity to cope with pressure associated with competition from its competitors. bulky players same(p), State Farm, Allstate and GEICO have created competitive pressure forthwith to Progressive.For example, Allstates low cost structure caused Progressive crisis and 1,300 employees fired Further much, progressives difficulty to smooth management transition is another weakness. When Peter Lewis stepped shoot down as president in 2000 and Glenn Renwick took up the post, company went through some punk rock times. Renwicks finis to raise insurance rate affected growth and meshwork adversely. 3. Opportunities grounding has and will create great opportunities for growth. Greater innovation can flummox Progressive the disaster to get to a greater extent(prenominal) unique products and services in run to meet customers needs better. Many innovative services such as Express Quote, Concierge Service have h elped the Company to serve and satisfy clients better. Furthermore, the sure was in top CIO Magazines CIO-100 list in recognition of its innovative practices and products. In addition, its website commonly rated as the best one, facilitates to accesses information more easily.Moreover, Internet is another celestial orbit that has potential for growth. The development of Internet offers Progressive the chance to expand their business and access directly to customers. They also can market to a much broader user for relatively less price.Homeowner Insurance is another area that offers opportunity for growth for progressive. In 2000, progressive started offering homeowners policies. However, the company was unable to mystify enough data to have pricing advantage so they cancelled the entire initiative in 2002. Now, with the advent of proficient advancement progressive could once over again explore this area to generate more revenue in the future.One other area that provides great opportunity for intricacy and growth is Emerging markets. Emerging markets like China, India, Russia and Brazil are expanding at the rate of knots. Although there are various risks factors associated with doing business in these countries, there are also greater rewards that come with it. 4. ThreatsOne of the threats Progressive faces is intense competition from its competitors. The insurance markets in the US are more and more competitive with a large act of players supplying a broad melt of products and services. Progressive slew has to face fierce competition with these players. The three biggest rivals of the Corporation include State Farm, Allstate, and GEICO. State Farm was chassis one in the personal auto insurance industry with a market share of 18% in 2006 and also the leading home insurer. The coadjutor is Allstate, the second largest player I both personal auto and homeowners industries with market shares of 11%-12% in each in 2006. Moreover, GEICO was the after pa rt largest personal auto insurer with a market share of 6.7% in the same year. The other threat Progressive face is changing rules and regulatings. Insurance regulations vary considerably among different States of the United States. This varying regulation has great impact on the firms operation. For example, the Proportion 103 was passed on November 8, 1988 in California, which mandated rate cuts of 20% in 1989. referable to this Proportion, the company had to pay out $50 million to 260,000 policyholders.The benefit was seriously affected, along with the strong reduction of market share in California market. Increasing character natural disasters is another threat that affects all insurance companies including Progressive. Natural disasters cause damage to both house and vehicle, which increases expense for the company. As predication, major climate changes are plausibly to occur in the coming decades. Therefore, insurers have a risk of facing with a trend toward higher losses callable to more claims relating to natural disasters. Reduction in insurance rates and use of civilise data mining techniques are other threats to progressive. While insurance rates are softening, Progressive is determined to hold prices firm. This decision could make the customers get away to other insurers, whose rates are lower. Everyone was using innovative data mining techniques and focusing on better claim support. This reduces the chance of being distinguished from other suppliers. III. RecommendationsInnovation has historically proven to be a vital tool for progressive insurance. Therefore, the company should continue to put more weight on innovation. An innovation offers the company a chance to improve its products and services whereby it can gain competitive advantage over its competitors. Progressive should also invest specie in advertising in severalise to increase customer awareness. Progressive already has a larger customer base, but if it wants to compete with th e industry giants like Allstate and State Farm, it needs to invest more in advertisement to attract and engage more customers. Developing and expanding the companys market in foreign countries is one-area progressive insurance needs to focus on if they are to reduce financial risks. Expanding the market in other countries enables progressive to maintain a stable finances in case the U.S economy goes down. Furthermore, progressive needs to work on new lines of products and services if they are to thrive in a highly competitive industry. In addition, expanding business to other areas like providing financial services or home security systems provides Progressive Corporation with opportunity to diversify its income sources.