Auto Insurance Industry Analysis

902 Words 4 Pages
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
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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

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