Progressive is a service organization (an auto insurance provider) that is looking to diversify its service offerings. By examining Progressive's existing service offering, we see that compared to other insurance providers its economics are not typical. In exploring the reasons, we learn that the company does things very differently than its competitors and, as such, has significantly different capabilities. Understanding these capabilities is necessary before assessing the new service innovation under consideration: pay-as-you-go insurance. We can analyze the existing capabilities of Progressive Insurance and the market demands of its customers to determine the viability of a potential new service. We can evaluate the introduction of technological service innovations. Because the perception of technological capabilities plays an important role in customer acceptance of such innovations, their introduction must be considered from a behavioral as well as business perspective.
ÃÂ· differentiated services
ÃÂ· technological leadership
ÃÂ· good price segmenters
ÃÂ· Use Internet technology in gaining customers
ÃÂ· Immature level of development of marketing efforts
ÃÂ· No clear strategy or roadmap of dealing with competition from top tier insurance companies
ÃÂ· consistently outsegment and differentiate from competition
ÃÂ· Excessive customer segmentation
ÃÂ· Excessive technology investment in non-value added projects that are not reigned in before fruition.
ÃÂ· Increasing deregulation in the insurance services industry
Progressive prides itself on providing low cost premiums resulting in 25% savings to customers employing innovative technology and price segmentation and it is regarded as Progressive's core competency. However, Progressive is at crossroads: whether to continue to attract niche markets employing innovative technologies such as the Autograph or to go the conventional insurance route aka State Farm or All State in the future?
Progressive took advantage of the Internet technology for customer education and quote comparison shopping and other...