Progressive+Case

Progressive Case

Robert McMillan, Progressive Corporation executive.
Peter Lewis, CEO, The Progressive Corporation

====**Immediate Issue/Problem Being Faced:** Progressive Insurance offers Autograph insurance program, pay-as-you-go basis, on vehicle which they are currently doing market in state level in U.S. Now, Progressive are looking for expanding company to National level. However, the main problem is rural and suburban driving's insurances are less expensive rate in regular basis. How could Progressive expand their business to National level in U.S. Focus your immediate issue: Should Progressive expand the use of the Autograph technology nationally? ====

Implementing the Autograph systems is feasible, however, the total cost will be significant if it has been implementing nationally.

**Urgency/Importance:**
The most urgency and important thing is Progressive should do the research and development (R&D) in each state mainly focus on city and prime area in order to plan to how should they expand in each state aim to reach nation level insurance company in U.S. The less urgency, but important is Progressive have to have trainning program for their employees both in the field and in the office in order to create standard in every areas they expanded. Remember that you are assessing the importance and urgency of addressing/solving the immediate issue.

**Decision Criteria:**
Securing the __technology__ is the first factor. Regarding to Progessive rely their business on technology consist of global positoning system (GPS) and wireless technology. If anythings occurs relate to technology's problem, Progressive will not be able to track and response their customer immediately follow their commitment. Whether our team and management can monitor each link, discover and solve the problem timely in the process of carrying out our business strategies. In order to reduce losses, try almost anything that makes sense and __stop__ bad ones early when it stop making sense is necessary.

Time and costs of implementation
Potential loss of significant revenues from premiums Different regulations in different states as well as potentially very different usage patterns

**Alternatives:**
1. Progressive expands to another state in city and prime area. Progressive mainly growth in city area, thus they should do their business in city area to create secue and healthy company before extent to rural and suburban area. 2. Progressive should launch many insurance program following each area due to each area such as city area, rural area and province area should not have the same rate. I'm not sure what you mean by this. 3. Develop new strategies focused around customer service models that allows for positive feedback from customers that could also attract new customers without using too much of their capital on new strategies. Update current systems Does this directly deal with the immediate issue?

**Missing Information:**
====<span style="font-family: Arial,Helvetica,sans-serif; font-size: 16px;">Progressive shows their strengths which is human resouces (including special investigators and outside representatives) that response customer immediately, also launch Immediate Response (IR) suddenly. However, they did not mention about their weakness that might posible block their possibility to success easily. Weaknesses could include the system they currently use, it could possibly scramble signals or send them at a delayed rate because of old technology that many other companies could use because of all of the personal GPS systems currently on the market. ====

Not provide the relevant data and information of Progressive in recent years, and it primarily focuses on 1994 to 2000 years.

1. Progressive expands to another state in city and prime area. Progressive mainly growth in city area, thus they should do their business in city area to create secure and healthy company before extent to rural and suburban area. Pros: - Enhance market share and obtain market priorities in the new potential market. Work in proven markets - Expanding Progessive's business in order to growth and healther company. - Create brand awareness toward other area in U.S. - Have positive opportunity to growth because their is only traditional insurance which calculate rate through gender, car and historical record of driver. There is no pay-as-you-go basis in other country yet.

Cons:
- Rapid expansion and add pilot maybe lead to financial strain and liquidity problems. Could be small cap because of limited cleint base within some citys - High risk in expanding due to each state hav their own local insurance company. - Require study and money to investment

2. Progressive should launch many insurance __programs__ following each area due to each area such as city area, rural area and province area should not have the same rate. Pros: - Meet different levels and area of consumer demand. - Create alternatives to customer either using Progressive's Insurance or local insurance company. - Build brand awareness to covey every areas in state in order to easy to expand other places.

Cons:
- Genarate profit migth be lower than city area due to their are high cost in install GPS and wireless technology in the vehicle. - Could create comparition between city area and rural area. - Require high cost including offices and human resources which might not worth to invest.

<span style="font-family: Arial,Helvetica,sans-serif; font-size: 16px;">1. Progressive expands to another state in city and prime area. Progressive mainly growth in city area, thus they should do their business in city area to create secue and healthy company before extent to rural and suburban area. By maintaining their position in the market they will be able to stay within their strengths and where they have had success. By staying in the city areas at first expansion before going to country areas, they will have the extra capital and it will also help them guage the new potential market before taking on the extra risk of the new markets. They would have to upgrade their technology if they wanted to achieve this.

Market rates of insurance do not drop and people continue to drive and also insure their cars.
Installation cost in each area is about the same

**<span style="font-family: Arial,Helvetica,sans-serif; font-size: 16px;">Action/Implementation Plan: **
<span style="font-family: Arial,Helvetica,sans-serif; font-size: 16px;">The most urgent Progressive should do in order to expand their company to Nation level is they should expand their company to another state mainly in city areas. They could start it by city around them or popular city to trial their insurance program to study that their Autograph is matching with customer's perference in each area or not. In this stage, Prograssive should be very flixible in changing or adapting themselve becuase each area might require difference preferences. This action could go by one to three years. In the same time, Progressive should have implementation plan by setting standard in insurance programs and their services because their program is innovation, fair and reasonable price for every drivers. Their is a good chance to go up to country or multi-country levels.