ECON6367-Global Economics

CASE: USAA is a Fortune 500 insurance and financial services company with 2014 annual sales exceeding $24 billion. The company was founded in 1922 by 25 Army officers who decided to ensure each other’s vehicles and continues to limit its membership to active-duty and retired military members, officer candidates, and adult children and spouses of military-affiliated USAA members. The company has received countless awards, including being listed among Fortune’s World’s Most Admired Companies in 2014 and 2015 and 100 Best Companies to Work For in 2010 through 2015. USAA was also ranked as the number-one Bank, Credit Card, and Insurance Company by Forrester Research from 2013 to 2015. You can read more about the company’s history and strategy at www.usaa.com.

Questions (In-depth discussions are expected. Please copy each question before providing your inputs.)

Question 1: 1. How would you characterize USAA’s competitive strategy? Should it be classified as a low-cost provider strategy ? A differentiation strategy ? A best-cost strategy?

Question 2: Has the company chosen to focus on a narrow piece of the market, or does it appear to pursue a broad market approach? Explain your answer.