|Type of paper:||Term paper|
|Categories:||Human resources Economics Society|
The USAA has grown to build the most successful operations in the insurance and financial services acquiring the class by itself when it comes to banking circles. Being the nation's fifth largest insurer for automobiles and homes that are privately owned, USAA seems to dominate every study on satisfaction. The current successful state of the company can be attributed to the various strategic measures it has put in place to ensure it remains the best (Mocker, Ross, & Hopkins, 2015). One essential strategy is the differentiation that has set USAA apart as compared to other financial institutions in the market. The significant differentiation beneficiaries have been the members who are paid back huge profits thus continue to attract more investors (Newman, 2015). Due to the differentiation, the members backing with USAA access multiple financial products such as savings accounts, checking accounts, and credit cards.
USAA success has also been realized in the way the company is committed to fulfilling the needs of the members through social listening. The company intended to utilize the increasing technological advancement following the fact that many people are today using social media sites such as Facebook. The company has however achieved through this strategy where it has gained over 800,000 followers. Besides, the company uses videos which are posted on the internet, and this has helped increase the customer base. Thus, the company's chief strategy to win over customers has been facilitated by its move to adopt customer centricity. USAA does it uniquely by inspiring empathy on its employees and the most stressed customers who are its members (Rigby, Reichheld, & Dawson, 2003). Content marketing has been another strategy the company has banked on to support the various products it offers with the intent to attract and captivate customers. These content marketing strategies include building a community of knowledge, creating learning opportunities, and using story-telling to harmonize brand.
Current Use of Technology
USAA has gone all the way to be ahead of many companies in terms of the use of technology. In the year 2004, the company became the first insurance company to test how drones could be used to expedite claim processing, especially in disaster areas after seeking federal permission. The research in using these technological drones had started back in 2010 and continued researching the best way to implement the idea. By adopting the use of drones, in any case, a hurricane or any natural disaster occurred, the safety officer, mission coordinator, and pilot could be dispatched to use the drone to fly it to ravaged areas that might be dangerous (Fiegenbaum, & Thomas, 2015). By the time USAA was thinking of having the idea, the existing technology was for property losses. The use of this technology by the company intends to achieve faster community building.
USAA as well moved to improve the operational efficiency by studying and developing the technology behind bitcoin transactions. Since carrying out this research, the company has been using blockchain which defines an open ledger of digital transactions of currency. All members of USAA who use bitcoin transactions are allowed to access blockchain. The company's interest behind considering bitcoin currency as an alternative to paying for goods with credit cards is to embrace the technology behind blockchain (Manning, Stephenson, & Todd, 2012). The users of this technology can make payments anonymously, instantly and with little or no regulation by the government. USAA is also among those companies that have implemented augmented reality and Virtual reality to allow high interactions (Lasher, Ives, & Jarvenpaa, 2011). The technology has been essential to the company following the fact that its members are the active military that are on the move and the company has no branches. This challenged the company to roll out mobile check deposit.
SWOT matrix with strategic implications for the company
The corporate tax rate decrease
The growth of global property & casualty insurance market
Highway safety improvement
Department of the defense budget Threats
Continued regulatory attention
Technology-driven business disruption
Merged powerhouse competition
The frequency of cyber attacks
Strong financial position, revenue growth by 8% in the past 7 years
Offers over 20 diversified products and services
Strong competitive edge by catering to the military community
Technological advancements Strategic alternatives
Open new segments to accommodate all the products
Leveraging brand recognition in new segments
Opening new branches with specific lines of products
Consider going global Strategic alternatives
Investing in research and development to thwart Technology & Operations industry disruptors.
Value addition to diversified products with the help of technology
Consider merging with other company to increase competitive advantage
Install system security to curb frequent cyber attacks
Lack of access to capital resources do to the company being private
Loan Default from members Strategic alternatives
Investing in customer-oriented services and supply chain
Creating an action plan to make the company compliant
Going global to increase the customer base for diversified products
Budget adjustment to consider contingencies Strategic alternatives
Amend the company policy to reflect the current laws
Make the company public to attract more members
Install system security to limit security threats
Get out of the business and focus on growth areas
From the SWOT matrix, a combination of internal factor evaluation and external factor evaluation results into a strategic alternative to be adopted by the company. For instance, a combination of strengths and opportunities will result in four strategic alternatives. These include Opening of the new segments to accommodate all the products, Leveraging brand recognition in a new segment, opening new branches with specific lines of products, and considering going global. The strategic alternatives for the combination of the strengths and opportunities aimed at improving on the areas that the company is already doing well and where it intends to venture into due to the available opportunities (Jarvenpaa, & Ives, 2011). A combination of strengths and threats as well requires some strategic alternatives that consider improving on the areas the company is already doing well and help reduce the threats faced by the company. These strategies include: investing in research and development to thwart Technology & Operations industry disruptors and value addition to diversified products with the help of technology. Other strategies include considering merge with other company to increase competitive advantage and installing system security to curb frequent cyber attacks.
BCG matrix with strategic implications for the company
Retirements Insurance products (auto insurance homeowners insurance)
Investments Banking services (checking and savings accounts, loans)
Considering the BCG matrix of USAA, there are various strategic implications the company could adapt to ensure that it achieves its effects through the different products offered.
Insurance products including auto insurance, homeowners insurance, renters insurance, life insurance, health insurance, and valuable personal property insurance form the stars of USAA insurance products for the company have the highest market share and seem to expand each day. Though, it generates high profit considering it is the oldest product to be offered by the company, strategic alternatives such adding more insurance and fixing desirable rates of the premium could help convert the stars into cash cows.
Banking services such as checking and savings accounts and loans seem to have introduced later than insurance products but are considered cash cow for the company. Banking services have a huge market share, but the market does not seem to grow following competition from financial institutions. Strategically, the company should consider setting more favorable loans terms and attract many members who would save with the bank to borrow
Investments in other areas for profit are the dogs for the company as the area does not seem to grow completely. The company undertakes little investment decisions. A strategic alternative would be to evaluate the project, the cost involved and the profitability
The retirement service provision represents the question marks of the company. The market share is low, despite the potential to grow but little is known about it. The strategic alternative could be to sensitize the working group of how retirement services benefit them after retirement.
Possible Strategic Alternatives
USAA could adopt other possible multiple alternatives to improve the efficiency and the effectiveness of the services offered to the members. The possible way this could be done is focusing on the employees who are the service providers. Employee motivation is an alternative to customer centricity since employees interact with customers (Danner, 2019). This could be achieved through increasing bonus and the working conditions including the policies of work.
Evaluation of Current Organizational Structure
As a mutual insurance company, USAA serves a large number of about 6 million member customers. The current organizational structure is such that it allows enough personnel to serve the members to satisfaction. The company has three managerial levels made up of the chief executive officer, executive vice presidential staff, and the presidents of the corporate divisions. The chief executive officer is the president and oversees the entire company including the Federal Savings Bank, Investment Management Company, Property and Casualty Insurance Group, Life Insurance Company, Alliance Services Company and the Financial Planning Services. Thus, the CEO performs a wide range of duties making him the person behind the success of the company. The executive vice presidential staff is an assistant to the chief executive officer in charge of the entire staff of the company. The executive vice presidential staff takes charge of all the appointments for various senior positions in the company. Presidents of corporate divisions are in charge of different divisions in the company. The company has seven executive vice presidents and three divisional presidents who all report to the chief executive officer.
The company is divided into seven different administrative support divisions and three corporate divisions. The multiple divisions within this organization tell that tasks are specialized at a great extent to ensure the services are enhanced in the affected areas. High differentiation is one of the strategies that USAA has applied to ensure efficiency in service delivery (Mocker, & Ross, 2013). The organizational chart has two to three levels depending on the interpretation of the organizational structure. This two to three level is the low vertical integration regardless of the number of levels identified by the individuals (Clayton, Johnson, Song, & Al-Qawasmi, 2008). Examining the organizational structure complexity of USAA, it would be classified as flat. The number of top executives involves only a few managers as well as few workers on the frontline of the organization (Mocker, & Ross, 2013). The workers at the lower level can make decisions with respect to the focused policy, guidance, strategy through monitoring and oversight. Workers as well as utilize technology interfaces which guide...
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