USAA Environmental Complexity


How turbulent is your company’s environment, and how well do they adapt?  List out as many elements affecting your company as you can for each of the sectors below.

 Industry (Competitors, Industry Size, Competitiveness, and Related Industries)


USAA’s most significant competitors include Geico, METLIFE, Inc., State Farm, Navy Federal Credit Union, Armed Services Mutual Benefit Association, Bank of America – Military Bank, The Allstate Corporation, and USI Insurance Services, LLC.  A number of these competitors began as a military focused-organization, but most have diversified their membership.  None of these competitors offer the full-range of services that USAA provides to their members.

Industry Size

 The financial services industry is extremely large.  According to the United States Bureau of Labor Statistics, the number of private industry members ranged from 473,246 to 478,715 between the 3rd quarter of 2014 and the 2nd quarter of 2015 (Labor, 2016).  According to Bloomberg and Schumer, this sector of the economy represents 8% of the US Gross Domestic Product and more than 5% of overall jobs.  This is a large, high-growth industry (Senate).


The level of competitiveness in the industry is defined by the large number of players and how well they perform in a number of areas.  Financial Services is a fast-growing industry that requires flexibility, innovation, adaptation, and change.  The companies must be able to develop new services based on the needs of their customers, be efficient, and easily accessible.  One of the most important aspects of financial services is stability.  Customers will not trust a company if they do not consistently provide value, exemplary service, and consistently reduced costs (Claessens, 2009).

Related Industries

USAA’s broad offerings allow it to relate to multiple industries.  USAA is involved in personal and business banking, health insurance, investments, life insurance and annuities, as well as property and casual insurance.  They offer financial advice and retirement planning services.  Recent diversification has added alliances with military organizations, rental car agencies, travel, vehicle dealerships, and realtors expanding their related industry list regardless of the lack of direct linkages (USAA, 2016).

Raw Materials (Suppliers, Real Estate, and Services)


USAA has a long list of suppliers and partners.  In 2013, they recognized 11 distinct vendors based on their innovation, veteran support, and performance (USAA, 2014).  These suppliers include:

  • CVM Solutions – Supplier Diversity and Vendor Management
  • Caliber Collision – Auto Body Repair and Paint Shop
  • Cartus – Global Relocation Services
  • Humana – Health Insurance and Benefits
  • Nuance – Computer Software
  • RR Donnelley – Print, Digital and Supply Chain Solutions
  • AT&T – Telecommunications
  • Safelite – Windshield Repair and Replacement
  • Xactware – Insurance Estimating Software
  • Adecco – Human Resource Consulting
  • Enterprise Rent-a-car – Car Rental
  • TCS – IT Services, Consulting and Business Solutions

A more comprehensive list of suppliers can be found at the Spiderbook website.

Real Estate

USAA maintains 250 ATM machines throughout the United States at no transaction cost for members.  USAA members can also use any nationwide ATM and receive a reimbursement up to $15 per month for usage fees (USAA, 2016).

USAA maintains financial centers in 11 states to include California, Colorado, Washington DC, Georgia, Kansas, New York, North Carolina, Maryland, Tennessee, Texas, and Virginia.  The headquarters is located in San Antonio, TX.  This headquarters, and the majority of the financial centers, are independently owned and designed for efficiency to demonstrate USAA’s commitment to the environment (USAA, USAA, 2016).


USAA provides insurance, banking, investment, retirement, real estate, and services to former and current military members as well as their dependents.

Human Resources (Labor Market, Universities, and Unions)

Labor Market

USAA had more than 27,000 employees throughout the United States and an 8% annual turnover rate.  USAA recruits former military, military dependents, and recent college graduates in order to build a workforce that supports the culture and value of the organization.  The benefits that USAA offers, to include school tuition, medical care, fitness resources, and flexible schedules, attracts an average of 56 employees per opening.  The company values experience and commitment, and often promotes jobs internally before recruiting externally (Fortune, 2015).

USAA works with Adecco for their human resources consulting.  Currently, the organization is split into four distinct career areas with specialized positions within those areas.  The main areas include customer service and sales, financial planning and investments, information technology, as well as risk management/compliance/audit (USAA, Career Areas at USAA, 2016).


USAA actively recruits emerging talent from nationwide universities.  In 2016, USAA expects to hire 300 summer interns and 300 new graduates.  This is an unprecedented number which demonstrates USAA’s interest in tapping new talent and emerging innovators.  Students are vetted based on their educational history, GPA, work experience, and extra-curricular activities.

The internships consist of 10 weeks of on-the-job training, professional development activities, and presentations to organizational leaders.  Mentors are assigned to the interns who receive a housing stipend and the opportunity to participate in organized picnics, sports activities, and volunteering opportunities.  There are main internship areas, but the flexibility of the company allows for more opportunities based on intern interests and the needs of USAA (USAA, University Recruiting, 2016).


USAA is a privately owned company.  While it does follow the rules and regulations for employees set by the Federal government, it does not have any unionized employees.

Financial Resources (Stock Markets, Banks, and Private Investors)

Stock Markets

USAA is a privately-owned company.  It is not listed on the stock market or traded publicly.


USAA’s banking division offers checking, savings, credit cards, and certificates of deposits.  Their certificate of deposit accounts have a low investment threshold and an increasing interest rate based on level of investment.  The bank offers auto, personal, and home loans.  Their rates are comparably as low, or lower, than competitors and they offer up to 100% financing on homes as well as new and used vehicles.  Their USAA Real Estate Rewards Network and USAA Car Buying Service provide discounts, and rewards that lower the contract price of offset initial investments (USAA, Join a bank that saves you money., 2016).

Private Investors

USAA is a privately owned company.  The company was formed by 25 army officers in 1922.  The company has remained private and the list of current owners are not available on the main website or in searches.   The company retains very limited profits and continues to reinvest in services, growth, and cost reduction for their members.

Market (Customers)


The current customer base of USAA consists of more than 10.6 million members.  Membership is open to former military, current military, military widows, and military dependents.  USAA is based solely in the United States and honors military service through the Army, Navy, Marines, Air Force, National Guard, Reserves, and Coast Guard.  Membership is also available to ROTC members and officer candidates within 24 months of their commission (USAA, Who Can Join, 2016).

Technology (Information Technology, and e-Commerce)

Information Technology

USAA maintains a membership of United States military affiliated individuals, but those individuals are very transient.  With the necessity to serve overseas for extended periods, be out of contact at unplanned times, and be frequent nomads, it is important that the services they provides reaches their customers where they need it and when they need it.

USAA is a pioneer of mobile check deposit, web banking, and phone banking.  They readily invest in technological improvements and implement technologies that are beneficial to their customer base before being copied by their competitors. Voice recognition and biometric account protection are the most recent innovations to be instituted by USAA (Adams, 2012).


USAA’s limited physical locations and widespread client base necessitates a company that relies heavily on e-commerce.  It has a solid web presence fully integrated for use on desktops, laptops, and mobile devices.  Individuals can sign up for an account, receive quotes, transfer money, apply for loans, or take part in any number of reward and discount programs available on the website.

Economic Conditions (Recession, Unemployment Rate, Inflation Rate, and Growth)


A recession would have a negative impact on the viability of USAA.  Services which fluctuate based on interest trends include investments in CDs, retirement planning, and home/auto loans.  These trends would translate to less investment and a lower demand for loans.  These individuals may keep their money with USAA, but will do so in low risk sectors such as savings which will lead to overall decreased interest profits.

Unemployment Rate

 Unemployment rates frequently rise in a recession as there is a lesser demand for consumer goods.  General unemployment rates would mean lower discretionary income to invest, spend, or save.

Inflation Rate

As the rate of inflation rises, USAA may be forced to raise interest rates on loans and investment opportunities.  As the rates are raised, USAA will be faced with more competition from the open market and a smaller client base seeking those financial services.


Economic growth will translate to increased revenues for USAA.  Individuals will make more money, spend more money, and invest more money in the services USAA provides.  The growth will translate into a higher net profit and more dividends to clients to offset costs even more.  This cyclical effect will continue to grow to benefit both the company and their client base.

Government (Laws, Regulations, and Taxes)

Laws and Regulations

 USAA is governed by city and state laws in the locations of their 19 facilities.  In addition, all USAA business is regulated by the Federal laws related to financial services industry.


USAA is privately owned which exempts them from the reporting requirements of publicly traded companies.  The organization prepares a yearly report which it disseminates to its members.  This report includes information about all revenue, expenditures, and taxes.  In 2014, USAA reported a tax rate of approximately 21%.  This rate fluctuates based on pretax income but has varied between 15% and 24% over the last three fiscal years (USAA, Report to Members, 2015).

Sociocultural (Age, Mission, Values, Beliefs, Education, Religion, Work Ethic, Consumer, and Green Movements)


USAA services are marketed towards customers of all ages.  While service eligibility is limited to a specific target audience, their wide range of services attracts individuals of all ages and backgrounds.

Mission and Values

“USAA’s mission is to facilitate the financial security of its members, associates, and their families by providing a full range of highly competitive financial products and services.  In so doing, we seek to be the provider of choice for the military community.

We do this by upholding the highest standards and ensuring that our corporate business activities and individual employee conduct reflect good judgment and common sense, and are consistent with our core values of Service, Loyalty, Honesty and Integrity.  Our values mirror those of the military community and our membership, and form the foundation on which we perform our work and conduct ourselves. (USAA, Career Areas at USAA, 2016)”


USAA is a strong supporter of education.  Their internship and university recruiting efforts provide opportunities for students to build their career, skills, and experience.


USAA is not affiliated with any specific religion of ethnic group.  They do not support specific religious causes.  Their targeted membership and pro-military stance places this company in a more republican political position, however, it does not publicize any such preference.

Work Ethics

USAA’s Code of Business Ethics and Conduct includes components of service, loyalty, honesty, and integrity (USAA, Career Areas at USAA, 2016).


  • We serve those who protect our freedoms every day, in everything we do.
  • We are responsive to our members’ needs.
  • We listen closely, show empathy and act swiftly.
  • We consistently ask more of ourselves and do more than is required.
  • We exhibit an entrepreneurial spirit – improving, adapting and innovating – to make our members’ lives easier.


  • We are a community that respects and supports one another in the belief that more is possible when we work together.
  • We have an undivided commitment to members because, as an association, our first responsibility is answering to them.
  • We support our members no matter what their stage of life.
  • We wholeheartedly contribute to the communities in which we live and work.


  • We are truthful and candid in everything we do.
  • We are clear in our communications and transparent about our intentions.
  • We have a workplace that is open and respectful.
  • We believe that individuals must have the courage to express their point of view, even in the face of opposition.


  • We hold ourselves to the highest standards and do the right thing.
  • We stand by our word, deliver on our promises and honor our commitments.
  • We put members’ interests first and make decisions that serve them well.


USAA has a number of initiatives to support their consumers.  They are strong military advocates who support military communities and provides financial transition assistance.  Volunteering by USAA employees is encouraged and the financial advisors provide free services to help people relocate and successfully move from the military to civilian life.

Green Movements

 USAA makes sustainability a priority.  Their work includes energy conservation, recycling, air quality, and water efforts.  This commitment is demonstrated by their ENERGY STAR, and LEED certifications as well as their success metrics.  They are ranked in the top 40 largest users of renewable power, have cut their waste and fuel usage by 29%, and their consumption of water has declined by 2 million gallons since 2008 (USAA, Environmental Commitment, 2016).

International (Competition from and Acquisition by Foreign Firms, Entry into Overseas Markets, Foreign Customs and Regulations, and Exchange Rate)

Competition From and Acquisition by Foreign Firms

USAA is a privately owned company.  It has demonstrated no commitment to becoming publicly traded.  Based on their profit and loss statements, USAA is in no immediate financial exigency where they would need to hold a public offering.  Their focus on the specific United States military target market, limits interest to foreign firms.  Investment in the company by a foreign entity may also decrease the commitment of the military membership base.

Entry into Overseas Markets

USAA has a specific United States military target market.  Offices or representatives in foreign countries would be helpful for those military personnel stationed overseas, but at this point, the company has shown no interest in expanding membership to foreign military forces or any additional membership pools.

Foreign Customs and Regulations

USAA does not have any foreign presence.  It is important that USAA is aware of international banking rules and regulations for those individuals who are doing business on foreign soil.  If they expand their offices to foreign locations, their knowledge of customs will need to expand further.

Exchange Rate

Customers stationed overseas may need to withdraw funds deposited in USAA accounts.  These withdraws may necessitate exchanges based on the local currency.  The exchange rate between the local currency and the United States dollar may provide less purchasing ability for consumers.

Is the organization internationally diversified?  In no, why not? Should the company plan for expansion? Where should they go? Why?

 The company has an extremely limited target market.  They have not captured the entire market, and their percentage share of the market increases every year.  At this point, I would not consider an expansion unless membership growth stagnates.  If this occurs, I would advise USAA to expand membership opportunities to a larger audience that includes individuals in current or former government and civil service positions.  This widening of membership maintains the service to the country limitation, while sharing the benefits of membership.

 If the firm is local, do they export out of the state? To whom? Should they consider exporting or expansion? Why/why not?

 USAA does not export any of their services.  They do not need to consider exportation unless they begin to sell physical products.  An expansion should be considered if profits and growth decline or normalize.

How complex and unpredictable is the organizations environment?  Which environment does your organization exist in?

USAA exists in a stable, complex environment.  There are a large number of external elements present, but changes to these elements are typically gradual and predictable.

Does your organization’s strategies and goals fit their environment?  Circle one of the types in the following categories that you have found your company to portray.Environmental ComplexityAnalyzer with innovation: Strong focus on both exploitation and exploration. Exploits its current position of resource utilization and market position, adopts an active innovation strategy of developing new products. Goes beyond what others do and surveys technology and market changes to look for additional opportunities. Ex/ Xerox

Did your organization align across environment, strategy type, and organizational goals? If no, should the organization align on these factors? If so, how should they do it?

 USAA did not align across environment, strategy type, and organizational goals.  I do not think that USAA needs to align their goals.  The financial services industry typically remains similar.  If changes occur, they do so slowly.  USAA’s on efficiency, effectiveness, and innovation allows it to stay ahead of these goals.   They pride themselves on what they can provide to their customers so this strategy may mean more organizational work, but it will lead to long-term increased chances of success, customer retention, and customer satisfaction.

Works Cited

 Adams, J. (2012, September 1). How USAA Innovates Online Banking. Retrieved from American Banker:

Claessens, S. (2009). Competition in the Financial Sector. International Monetary Fund.

Fortune. (2015). 100 Best Companies to Work For. Retrieved from USAA:

Labor, U. S. (2016, February 3). Bureau of Labor Statistics. Retrieved from Finance and Insurance: NAICS 52:

Senate, T. C. (n.d.). Bloomberg/Schumer Financial Services Competitiveness Report.

USAA. (2014, July 8). USAA Awards Suppliers for Innovation, Veteran Support and More. Retrieved from Cartus:

USAA. (2015). Report to Members. Retrieved from

USAA. (2016). Career Areas at USAA. Retrieved from USAA:

USAA. (2016). Environmental Commitment. Retrieved from USAA:

USAA. (2016). Join a bank that saves you money. Retrieved from USAA:

USAA. (2016). University Recruiting. Retrieved from USAA:

USAA. (2016). USAA. Retrieved from USAA:

USAA. (2016). USAA. Retrieved from FAQs: Banking Branch / ATM Locations:

USAA. (2016). USAA. Retrieved from Let Us Serve You Closer to Home:

USAA. (2016). Who Can Join. Retrieved from USAA:


One thought on “USAA Environmental Complexity

  1. This is very well done, good job! You did a great job in supporting your assertions about the company. Your research is looking solid. Cheers!


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