USAA SWOT Analysis

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Strengths:

  • USAA is currently ranked #1 in customer service in the bank, credit card, and insurance category by Forrester Research Inc. Without customers, the business would be extinct.  Providing excellent services improves their chances of maintaining current customers as well as gaining new ones.  Research has indicated that retaining customers has a higher value than marketing for new ones.
  • com has rated USAA as 4.5 stars out of 5 for their value for price. This indicates that the majority of clients are happy with the amount they pay in premiums for the service they are receiving.  This metric relates again to retaining current market share.
  • USAA recruits actively from pools of university graduates and prior military. These employees have advanced knowledge and training.  In addition, they provide mentoring programs, internships, and educational benefits to help employees further their careers.  A highly-skilled workforce will provide increased flexibility, cultural knowledge, and ability to adapt.  The wealth of benefits and support to their employees encourages a strong culture and loyalty.
  • USAA has grown each year since their creation. They continue to earn profit each year, which is reinvested into the company or used to reduce premiums for members.  USAA Continues to diversify their services based on the needs of the customers.  The diversification allows them to grow even with their limited target market.
  • USAA focuses on current and prior military and their dependents. The advertising and services are marketed towards their unique needs.
  • USAA continues to lead the insurance world in technological innovations. They were one of the first financial services companies to offer an app and biometric identify verification.

Weaknesses:

  • USAA’s limited target market provides no current opportunities for international growth. Once they reach all prior military and their dependents, there will be no other opportunities for expansion.
  • All financial services companies deal with default issues as well as competitive pricing in order to stay profitable.
  • USAA’s large electronic footprint presents a cybersecurity threat to the company and its customers. They will need to continue to stay abreast of technological changes in order to protect the integrity of their systems.
  • USAA is privately owned and are not required to report their financials with as much scrutiny as publicly traded firms. It might be difficult for them to compare their financial health with other companies based on these discrepancies.

Opportunities:

  • USAA is a fully established financial services company. They have built their reputation on catering only to the needs of prior and current military and their dependents.  They can consider expanding membership opportunities or providing additional services in order to increase revenue.
  • USAA provides most of their services in-house with little contractual relationships with vendors. Partnerships and alliances with other financial services companies may allow them to buy umbrella policies which may further reduce costs for their members.
  • USAA can pursue an initial public offering (IPO) in order to raise additional revenue if necessary for future expansion or function.

Threats:   

  • Financial services companies are typically stand-alone, but recent news demonstrates that mergers are occurring and will continue to do so. These mergers allow the companies to appeal to a broader target market and decreases liability of either company due to shared resources.
  • Natural disasters in areas where USAA maintains home insurance and auto insurance policies can lead to increased losses.
  • The financial services sector is closely monitored by Federal regulations. Compliance often requires extra expenditures and constant oversight.
  • Fluctuations in the economy and tax rates will impact the amount of money individuals have to invest and spend. Less spending means less loans issued and lower interest profits.
  • Competitors duplicate USAA emerging and existing technology in order to stay competitive. When duplicated, USAA no longer holds an advantage.

 References:

Learning at USAA | USAA Career Center. (n.d.). Retrieved February 12, 2016, from https://www.usaajobs.com/life-at-usaa/learning.html

USAA Car Insurance Ratings. (n.d.). Retrieved February 12, 2016, from http://www.insure.com/companies/usaa-car-insurance.html

Welcome to USAA! To get started, please enable cookies. (n.d.). Retrieved February 12, 2016, from https://www.usaa.com/inet/wc/about_usaa_corporate_overview_awards_and_rankings?akredirect=true

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2 thoughts on “USAA SWOT Analysis

  1. This is a neat SWOT, but what I really wanted to see was how you determined the assumptions in each of the areas with support from your resources.

    Like

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