Case Study Description of Changing Channels: Progressive Insurance Drive Insurance
Sequel to Progressive Insurance: Not Your Standard Insurance Story. The company launches a new sub-brand, Drive Insurance, that will be only sold through independent agents, not through the Web or 1-800 numbers.
Authors :: Paul W. Farris, Alan Zimmerman, Phillip E. Pfeifer
Swot Analysis of "Changing Channels: Progressive Insurance Drive Insurance" written by Paul W. Farris, Alan Zimmerman, Phillip E. Pfeifer includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Insurance Progressive facing as an external strategic factors. Some of the topics covered in Changing Channels: Progressive Insurance Drive Insurance case study are - Strategic Management Strategies, Sales and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Changing Channels: Progressive Insurance Drive Insurance casestudy better are - – talent flight as more people leaving formal jobs, increasing transportation and logistics costs, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, challanges to central banks by blockchain based private currencies, cloud computing is disrupting traditional business models, increasing household debt because of falling income levels,
central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Changing Channels: Progressive Insurance Drive Insurance
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Changing Channels: Progressive Insurance Drive Insurance case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Insurance Progressive, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Insurance 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 Changing Channels: Progressive Insurance Drive Insurance can be done for the following purposes –
1. Strategic planning using facts provided in Changing Channels: Progressive Insurance Drive Insurance case study
2. Improving business portfolio management of Insurance Progressive
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Insurance Progressive
Strengths Changing Channels: Progressive Insurance Drive Insurance | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Insurance Progressive in Changing Channels: Progressive Insurance Drive Insurance Harvard Business Review case study are -
Analytics focus
– Insurance Progressive is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Paul W. Farris, Alan Zimmerman, Phillip E. Pfeifer can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Sustainable margins compare to other players in Leadership & Managing People industry
– Changing Channels: Progressive Insurance Drive Insurance firm has clearly differentiated products in the market place. This has enabled Insurance Progressive to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Insurance Progressive to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Insurance Progressive has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Insurance 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.
High switching costs
– The high switching costs that Insurance 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.
Cross disciplinary teams
– Horizontal connected teams at the Insurance Progressive are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Highly skilled collaborators
– Insurance 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 Changing Channels: Progressive Insurance Drive Insurance HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Insurance 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 Insurance Progressive is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Changing Channels: Progressive Insurance Drive Insurance Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Leadership & Managing People field
– Insurance 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 Insurance Progressive in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Insurance Progressive is one of the most innovative firm in sector. Manager in Changing Channels: Progressive Insurance Drive Insurance Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Organizational Resilience of Insurance Progressive
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Insurance Progressive does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Insurance Progressive in the sector have low bargaining power. Changing Channels: Progressive Insurance Drive Insurance has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Insurance Progressive to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Insurance Progressive has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Insurance Progressive to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Changing Channels: Progressive Insurance Drive Insurance | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Changing Channels: Progressive Insurance Drive Insurance are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Changing Channels: Progressive Insurance Drive Insurance, in the dynamic environment Insurance Progressive has struggled to respond to the nimble upstart competition. Insurance Progressive has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Changing Channels: Progressive Insurance Drive Insurance, is just above the industry average. Insurance 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Changing Channels: Progressive Insurance Drive Insurance has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Insurance Progressive 's lucrative customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Insurance Progressive needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
No frontier risks strategy
– After analyzing the HBR case study Changing Channels: Progressive Insurance Drive Insurance, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People 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.
Lack of clear differentiation of Insurance Progressive products
– To increase the profitability and margins on the products, Insurance Progressive needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Changing Channels: Progressive Insurance Drive Insurance HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Insurance Progressive has relatively successful track record of launching new products.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Insurance Progressive supply chain. Even after few cautionary changes mentioned in the HBR case study - Changing Channels: Progressive Insurance Drive Insurance, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Insurance Progressive vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Insurance 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.
Slow decision making process
– As mentioned earlier in the report, Insurance 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. Insurance 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Paul W. Farris, Alan Zimmerman, Phillip E. Pfeifer suggests that, Insurance Progressive is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Opportunities Changing Channels: Progressive Insurance Drive Insurance | 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 Changing Channels: Progressive Insurance Drive Insurance are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Insurance Progressive can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Changing Channels: Progressive Insurance Drive Insurance, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help Insurance Progressive to increase its market reach. Insurance Progressive will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Insurance Progressive can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Insurance Progressive can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Using analytics as competitive advantage
– Insurance 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 Changing Channels: Progressive Insurance Drive Insurance - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Insurance Progressive to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Insurance Progressive can use these opportunities to build new business models that can help the communities that Insurance Progressive operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Loyalty marketing
– Insurance 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Insurance Progressive can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for Insurance 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Insurance 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.
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. Insurance Progressive can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Insurance Progressive can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Developing new processes and practices
– Insurance Progressive can develop new processes and procedures in Leadership & Managing People 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.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Insurance Progressive to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Threats Changing Channels: Progressive Insurance Drive Insurance External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Changing Channels: Progressive Insurance Drive Insurance are -
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. Insurance 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.
Environmental challenges
– Insurance Progressive needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Insurance Progressive can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Insurance Progressive business can come under increasing regulations regarding data privacy, data security, etc.
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.
High dependence on third party suppliers
– Insurance 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Insurance 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 Changing Channels: Progressive Insurance Drive Insurance .
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Insurance Progressive can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Insurance Progressive is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Insurance Progressive
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Insurance Progressive.
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. Insurance Progressive needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Consumer confidence and its impact on Insurance Progressive demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Insurance Progressive with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Changing Channels: Progressive Insurance Drive Insurance 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 Changing Channels: Progressive Insurance Drive Insurance 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 Changing Channels: Progressive Insurance Drive Insurance 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 Changing Channels: Progressive Insurance Drive Insurance 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 Changing Channels: Progressive Insurance Drive Insurance 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 Insurance Progressive needs to make to build a sustainable competitive advantage.
