Auto Insurance Industry Analysis

Improved Essays
Level 1- Refining: Define competition and outline it scope

Competition is a component of the environmental scan. It refers to the alternative firms that could provide a product to satisfy a specific market’s needs. There are various forms of competition that play apart in a company’s marketing strategy. One form of competition is pure competition in which there are many sellers and they each have a similar product. The next form is monopolistic competition in which many sellers compete with substitutable products within a price range. Lastly, oligopoly occurs when a few companies control the majority of industry sales. Competition is considered to be a good aspect between companies. It drives the company to push towards creating the best product
…show more content…
Both types of insurance companies both offer the same thing to their customers but the sit up of each company limits them to what they can offer. There are two types of auto insurances companies serving buyers. One group consists of publicly traded companies that must satisfy both shareholders and policyholders. The other type known as a mutual company must only satisfy the policyholders. The conflict and competition between the two groups aren’t as obvious as many other industries because of the complexity of the business. It’s easy to promote the best offers and deals to your customers. However, one has to make sure that your company is set us to allow one to be able to completely provide. In a study it found that the best values for customers were given to companies that were mutual insurance companies. This is possibly because of the difficulty of having to please both policyholders and shareholders. This is why it is important to understand your competition in the industry that you are trying to get in. One company researched the mistakes that another company did (becoming publicly traded) and then modeled there company differently (becoming …show more content…
Ethics are moral principles and values that govern actions and decision of an individual or group. There are many factors that influence marketing behavior such as societal culture and norms, business culture and industry practices, and finally corporate culture and expectations. With these two insurance companies one of the biggest factors that could pose ethical issues are corporate culture and expectations. The corporation whether mutually and publicly traded have to have live up to the expectations of their corporate office. This could potentially cause the companies to fall down the road of making unethical choices. Many insurance companies were under attacked for pricing policies that hurt consumers and enrich the executive. These lead to many legal actions that could further hurt the

Related Documents

  • Improved Essays

    Business Ethics and Social Responsibility Ethics is a concept of what is right and what is wrong. Ethical principles guide individuals’ behaviors toward moral and immoral activities. In the business world, an emerging concern for most firms is Corporate Social Responsibility. The effect of corporate responsibilities on the company’s public image and reputation is very effective. The company’s actions should safeguard the environment for new generations, as well as working toward sustainable development.…

    • 769 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    Companies employing this theory of governance shareholders hire Chief Executive Officers (CEOs) and “incentivize [them] to adequately monitor their output and motivate superior performance” (Martin and Butler 2017). One major role for agents and principals operating under this theory is to align their goals to avoid conflict; however, when they do encounter conflict the goal is to resolve differences to avoid risking the company. Benefits of the agent theory are the incentives that CEOs are offered. These incentives aid in avoiding CEOs from “engaging in shirking behaviors” (Martin and Butler 2017) since they are receiving financial kickbacks. There is a whole host of instances where CEOs have embezzled large sums of money from their companies for their own financial benefit.…

    • 863 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    During a format war, describe how competition occurs and how a price war can take shape. Competition between two companies with products of the same format within the same market place is called a Format war. Quality matters the most for these companies since they are competing for the same market space and customers. That will be their differentiating factor for the customers. Companies can increase the price of the product based on the quality factor and create a competitive advantage resulting in a price war.…

    • 865 Words
    • 4 Pages
    Improved Essays
  • Superior Essays

    Marketing is a key part of this process as well as this is when the product is exposed to the market. One of the tools that businesses may use to influence the success of their product is the Marketing Mix, made up of four P’s which “[describe] the marketing elements that could affect the way a product [performs] in the marketplace” (Capon, 2009:251). The first aspect of the Marketing Mix is the product itself. A lot of this process has already been covered through the discussion of product development, however, it must be noted that businesses need to gain as much possible profit through the sales of their product, so it must be made cheaply and focus must be placed on the advancement of the product, making small changes that keep up with demand. The second of the four P’s is price.…

    • 1170 Words
    • 5 Pages
    Superior Essays
  • Improved Essays

    When individuals pull responsibility from themselves, they often do things that are questionable for the better of the company. For instance, the individuals that made decisions on behalf of the fallen company Enron, likely made decisions behind the veil of the corporation; furthermore, those decisions negatively affected those that invest in the company and those that worked there. There are many insights gained by looking at Enron such as the vital role that top management leadership plays in the organizational culture. Ethics and ethical behavior in accounting, financial planning, and the decision-making process are used to ensure adherence to standards and practices. It shows that the best ethical behavior is to follow the International Accounting Standards.…

    • 777 Words
    • 4 Pages
    Improved Essays
  • Great Essays

    Pressures that may be encountered include peer pressure, desire to fit in and fear of confrontation. The price for compromising personal ethics is the guilt and possible negative outcomes far outweigh the pressures. Companies are made of people that make the decisions and people are a reflection or representation of their employer. An unethical person making the decision drives companies that behave unethically. Conversely, ethical people drive ethical companies.…

    • 1486 Words
    • 6 Pages
    Great Essays
  • Improved Essays

    In a business environment, there are many moral and ethical principles that surround business practice (Robbins et al, 2013). Firms are motivated by growth, expansion and profit, and as these rules bind business practices, many can be disregarded or avoided by individuals or entire firms, to cut corners in the pursuit of wealth. Competition drives efficiency, innovation, growth and raises incomes, however it also makes firms look to cut costs, their prices and indirectly destroy entrepreneurial opportunity. Businesses have to have the willingness to be ethical, as there will always be cheaper, easier, unethical ways to save money and time, but competition, as opposed to greed, promotes ethical behaviour in the long run (Shleifer, 2004). As competitive pressures lead firms to unethical behaviour, it also raises incomes and consumer’s…

    • 1407 Words
    • 6 Pages
    Improved Essays
  • Great Essays

    This is due to the auditors knowledge build during their term with company. The proposed solution to reduce the independence of the auditors is to have mandatory audit rotation. However rotation can be costly and it could also undermine the audit quality. Therefore is it is beneficial to keep the same auditors as the auditors are familiar with business and will not be too disruptive. Auditing rotation hides the relationship between the auditor and the company.…

    • 1066 Words
    • 4 Pages
    Great Essays
  • Improved Essays

    However, small organizations can work easily to create a suitable working, ethical environment, but implementing ethical behaviors for multinational corporations can become more diffuse. Many individuals in the organizations may find themselves in the positions wherein they discover pursuing ethics challenging and may choose to avoid it because they find unethical approach more easy and tempting. I’d like to refer business executive William R. Holland’s quote in industry week as “There must be the will, the inner discipline, the strength, and the character to do the right thing, regardless of the cost. Doing the wrong thing is so disregarded the rights of the others and inflict harm or grief on…

    • 1107 Words
    • 5 Pages
    Improved Essays
  • Improved Essays

    Metrics is an important aspect of market planning, because initially a business might need to invest certain amount of money out of which a partial amount might get wasted, but a company cannot afford to take that risk every time; thus, it is essential to calculate the metrics of business. One of the beneficial methods for consumer awareness is consumer surveys (Miranda Brookins, 2014). This can be an effective way for enhancing the brand awareness and the surveys are a way of measuring where the sales figures are not directly related to the different marketing spends. The objectives of the company need to be both short and long term for allowing in adjusting the marketing methods while the metrics offer a poor…

    • 1317 Words
    • 5 Pages
    Improved Essays

Related Topics