progressive case analysis
Progressive case analysis
I. Introduction and strategy analysis
Over decades operating in a highly competitive environment, the key strategy that makes Progressive the top three in the $165 billion US private passenger auto insurance industry is focusing on innovations and customer satisfaction. Established in 1937, from the beginning, Progressive approached the market with an innovative method by providing customers drive-in claims service and the ability to make monthly installment payments. That, on one hand, appealed more opportunities for people who could not afford paying insurance in lump sum to have their vehicles protected. Besides, it helped Progressive enter the market with competitive advantage to approach more potential customers.
In 1957, by positioning the market correctly and understanding all market segments’ potential benefits that had not been realized by competitors, Progressive was willing to take risk to enter the nonstandard segment, which includes drivers with poor driving records or high risk profiles. This strategy, in turn, increased the company’s sales significantly and turned Progressive into a major brand in the insurance industry.
The fierce competition of Allstate in the nonstandard market in 1985 and the approval of the Preposition 103 mandating insurance rate cuts of 20% in 1989 caused a crisis at Progressive. The company attempted to reduce cost by firing 1,300 employees. In addition, the efforts in understanding consumers’ perception and behaviors facilitated the company to launch its new strategy called Immediate Response in 1990 with the attempt to build trust in consumers. The main advantage of this strategy was that it speed claims process and increased customer satisfaction when accidents occurred. Immediate Response could be considered as one of the major improvements and transitions of Progressive that could help the company improve customer retention.
Facing the intense competition, along with launching
I. Introduction and strategy analysis
Over decades operating in a highly competitive environment, the key strategy that makes Progressive the top three in the $165 billion US private passenger auto insurance industry is focusing on innovations and customer satisfaction. Established in 1937, from the beginning, Progressive approached the market with an innovative method by providing customers drive-in claims service and the ability to make monthly installment payments. That, on one hand, appealed more opportunities for people who could not afford paying insurance in lump sum to have their vehicles protected. Besides, it helped Progressive enter the market with competitive advantage to approach more potential customers.
In 1957, by positioning the market correctly and understanding all market segments’ potential benefits that had not been realized by competitors, Progressive was willing to take risk to enter the nonstandard segment, which includes drivers with poor driving records or high risk profiles. This strategy, in turn, increased the company’s sales significantly and turned Progressive into a major brand in the insurance industry.
The fierce competition of Allstate in the nonstandard market in 1985 and the approval of the Preposition 103 mandating insurance rate cuts of 20% in 1989 caused a crisis at Progressive. The company attempted to reduce cost by firing 1,300 employees. In addition, the efforts in understanding consumers’ perception and behaviors facilitated the company to launch its new strategy called Immediate Response in 1990 with the attempt to build trust in consumers. The main advantage of this strategy was that it speed claims process and increased customer satisfaction when accidents occurred. Immediate Response could be considered as one of the major improvements and transitions of Progressive that could help the company improve customer retention.
Facing the intense competition, along with launching