Progressive Insurance: Making Pay As You Drive a Snap for Consumers SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Progressive Insurance: Making Pay As You Drive a Snap for Consumers
Heather Day, a marketing director and brand manager, must evaluate her options for Progressive Insurance's next Snapshot product advertising campaign. Working on a limited budget, Day must select between employing television ads featuring the popular character known as Flo and continuing with the launch of advertising campaigns already in use, such as "Rate Sucker." The case places Progressive's proposed advertising campaign into a broader historical context and asks how the Snapshot product both fits into the company's current business model and affects its channel strategy. Students are presented with a myriad of exhibits that help make this authentic marketing scenario come to life.
Authors :: Paul W. Farris, Sylvie Thompson, Thomas Steenburgh
Swot Analysis of "Progressive Insurance: Making Pay As You Drive a Snap for Consumers" written by Paul W. Farris, Sylvie Thompson, Thomas Steenburgh includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Snapshot Progressive facing as an external strategic factors. Some of the topics covered in Progressive Insurance: Making Pay As You Drive a Snap for Consumers case study are - Strategic Management Strategies, Pricing and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Progressive Insurance: Making Pay As You Drive a Snap for Consumers casestudy better are - – increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, increasing commodity prices, there is backlash against globalization, central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy,
cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Progressive Insurance: Making Pay As You Drive a Snap for Consumers
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Progressive Insurance: Making Pay As You Drive a Snap for Consumers case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Snapshot Progressive, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Snapshot Progressive operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Progressive Insurance: Making Pay As You Drive a Snap for Consumers can be done for the following purposes –
1. Strategic planning using facts provided in Progressive Insurance: Making Pay As You Drive a Snap for Consumers case study
2. Improving business portfolio management of Snapshot Progressive
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Snapshot Progressive
Strengths Progressive Insurance: Making Pay As You Drive a Snap for Consumers | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Snapshot Progressive in Progressive Insurance: Making Pay As You Drive a Snap for Consumers Harvard Business Review case study are -
Sustainable margins compare to other players in Sales & Marketing industry
– Progressive Insurance: Making Pay As You Drive a Snap for Consumers firm has clearly differentiated products in the market place. This has enabled Snapshot Progressive to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Snapshot Progressive to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Snapshot Progressive has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Progressive Insurance: Making Pay As You Drive a Snap for Consumers - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Sales & Marketing field
– Snapshot Progressive is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Snapshot Progressive in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Snapshot Progressive in the sector have low bargaining power. Progressive Insurance: Making Pay As You Drive a Snap for Consumers has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Snapshot Progressive to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Snapshot Progressive is one of the leading recruiters in the industry. Managers in the Progressive Insurance: Making Pay As You Drive a Snap for Consumers are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Snapshot Progressive is one of the most innovative firm in sector. Manager in Progressive Insurance: Making Pay As You Drive a Snap for Consumers Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Successful track record of launching new products
– Snapshot Progressive has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Snapshot Progressive has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Highly skilled collaborators
– Snapshot Progressive has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Progressive Insurance: Making Pay As You Drive a Snap for Consumers HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Snapshot Progressive digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Snapshot Progressive has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
High switching costs
– The high switching costs that Snapshot Progressive has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Strong track record of project management
– Snapshot Progressive is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Snapshot Progressive is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Snapshot Progressive is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Progressive Insurance: Making Pay As You Drive a Snap for Consumers Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Progressive Insurance: Making Pay As You Drive a Snap for Consumers | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Progressive Insurance: Making Pay As You Drive a Snap for Consumers are -
Slow decision making process
– As mentioned earlier in the report, Snapshot Progressive has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Snapshot Progressive even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Lack of clear differentiation of Snapshot Progressive products
– To increase the profitability and margins on the products, Snapshot Progressive needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Progressive Insurance: Making Pay As You Drive a Snap for Consumers, is just above the industry average. Snapshot Progressive needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Increasing silos among functional specialists
– The organizational structure of Snapshot Progressive is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Snapshot Progressive needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Snapshot Progressive to focus more on services rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of Snapshot Progressive, firm in the HBR case study Progressive Insurance: Making Pay As You Drive a Snap for Consumers needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, Snapshot Progressive has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Progressive Insurance: Making Pay As You Drive a Snap for Consumers, in the dynamic environment Snapshot Progressive has struggled to respond to the nimble upstart competition. Snapshot Progressive has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Products dominated business model
– Even though Snapshot Progressive has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Progressive Insurance: Making Pay As You Drive a Snap for Consumers should strive to include more intangible value offerings along with its core products and services.
Skills based hiring
– The stress on hiring functional specialists at Snapshot Progressive has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
No frontier risks strategy
– After analyzing the HBR case study Progressive Insurance: Making Pay As You Drive a Snap for Consumers, it seems that company is thinking about the frontier risks that can impact Sales & Marketing strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High cash cycle compare to competitors
Snapshot Progressive has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Opportunities Progressive Insurance: Making Pay As You Drive a Snap for Consumers | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Progressive Insurance: Making Pay As You Drive a Snap for Consumers are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Snapshot Progressive in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Learning at scale
– Online learning technologies has now opened space for Snapshot Progressive to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Developing new processes and practices
– Snapshot Progressive can develop new processes and procedures in Sales & Marketing industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Snapshot Progressive in the consumer business. Now Snapshot Progressive can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Snapshot Progressive can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Sales & Marketing segment.
Low interest rates
– Even though inflation is raising its head in most developed economies, Snapshot Progressive can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Creating value in data economy
– The success of analytics program of Snapshot Progressive has opened avenues for new revenue streams for the organization in the industry. This can help Snapshot Progressive to build a more holistic ecosystem as suggested in the Progressive Insurance: Making Pay As You Drive a Snap for Consumers case study. Snapshot Progressive can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Snapshot Progressive has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Snapshot Progressive can use these opportunities to build new business models that can help the communities that Snapshot Progressive operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Snapshot Progressive can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Snapshot Progressive has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Progressive Insurance: Making Pay As You Drive a Snap for Consumers - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Snapshot Progressive to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Snapshot Progressive is facing challenges because of the dominance of functional experts in the organization. Progressive Insurance: Making Pay As You Drive a Snap for Consumers case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Snapshot Progressive can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Progressive Insurance: Making Pay As You Drive a Snap for Consumers External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Progressive Insurance: Making Pay As You Drive a Snap for Consumers are -
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Snapshot Progressive needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Snapshot Progressive in the Sales & Marketing sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Snapshot Progressive is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Snapshot Progressive can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Snapshot Progressive will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Technology acceleration in Forth Industrial Revolution
– Snapshot Progressive has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Snapshot Progressive needs to keep up with the evolution of technology in the Sales & Marketing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Progressive Insurance: Making Pay As You Drive a Snap for Consumers, Snapshot Progressive may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Snapshot Progressive.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Regulatory challenges
– Snapshot Progressive needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Sales & Marketing industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Snapshot Progressive can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Progressive Insurance: Making Pay As You Drive a Snap for Consumers .
High dependence on third party suppliers
– Snapshot Progressive high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Weighted SWOT Analysis of Progressive Insurance: Making Pay As You Drive a Snap for Consumers Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Progressive Insurance: Making Pay As You Drive a Snap for Consumers needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Progressive Insurance: Making Pay As You Drive a Snap for Consumers is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Progressive Insurance: Making Pay As You Drive a Snap for Consumers is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Progressive Insurance: Making Pay As You Drive a Snap for Consumers is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Snapshot Progressive needs to make to build a sustainable competitive advantage.