Environmental Analysis: Geico Week 3

RUNNING HEAD: GEICO ENVIRONMENTAL ANALYSIS

GEICO Environmental Analysis

MBA580

University of Phoenix

Introduction

Insurance is a group of people paying premiums in large amounts to cover large expenses if they occur. One area where the majority of insurance premiums are used towards is collision repair. The majority of insurance companies have an auto damage department responsible for estimate and paying for damages as a result of an automobile accident. The auto damage department for GEICO in Phoenix, AZ has experienced many different circumstances of understaffing and no organization in the past. The department is now developing a strategy to give an advantage to face obstacles foreseen the in future.

Strategic Imperatives

In developing a strategic strategy for the Auto Damage Department for GEICO located in Phoenix, AZ many areas of the department need to be reviewed. An analysis will be conducted to identify factors that affect the company’s ability to conduct business and be successful. Opportunities are present and GEICO will need to identify these opportunities and develop plans to take advantage of these. The department will be analyzed from both an internal view and external view. By identify strength, weaknesses, threats, and opportunism a more sound strategy can be developed to pursue to development and solidify the future of the department. The foundation of success will ultimately lie on a solid plan and setting and obtaining goals. Many factors can be identifying both from internally and externally. However, too many problems may become confusing and create distractions from the most important issues the department is currently facing.

The current department has experienced a vigorous road from the past few years. The Phoenix market experienced a large growth for GEICO over the past five years. In the past the area grew tremendously while the area was understaffed. The department was challenged with settling a claims volume way above the average of the company. This created goals of nearly inspecting the claims. Due to the extreme volume the area has experienced an increase in severity and decrease in customer service results. Overtime the department began hiring and training employees. The department is now fully staffed to be able to handle the volume of the area. However, due to the extreme circumstances of the past no strategic plan has been formally address to develop the department to be able to reach the goals desired. By focusing on the current state of the external factors the department will be able to take measures of the situations.

Currently the company has strengths of being fully staffed, having the equipment necessary to supply personal, the recognition of a national company, and developing new repair programs. Currently the staff is approximately 30 adjusters, 4 supervisors, and one manager; compared to the past days of being understaffed with approximately 10 adjusters 2 supervisors and one manager. Obviously, the increase in personal identifies how understaffed the area was before. Equipment is crucial for the adjusters to complete the job. The majority of adjusters use a company car as an office. The adjuster receives assignment and goes to the area to inspect the vehicle. Some adjusters are positioned in body shops with appointments which go to the respective shop. The main decision for this is drivable or non drivable cars involved in the accident. An adjuster can be more productive and see more vehicles if the cars can go to adjuster rather than the adjuster chasing vehicles around. Obviously, if the vehicle is not drivable the adjuster must arrange to inspect the vehicle at the customer’s body shop or location of the vehicle. Each adjuster is equipped with a company car, laptop, cell phone, printer, camera, and the additional miscellaneous supplies which are needed to complete the job.

As mentioned the company has experienced growth in the local market. According to Pearce and Robinson, “The stars are businesses in rapidly growing markets with large market shares.” (Pearce & Robinson, 2004, p 8) However, the goal of growth is still a priority. Company wide the GEICO was the largest growing insurance company in 2007. The company still plans to develop more growth. A good portion of the Phoenix market is controlled by GEICO. The area has experienced some decrease in people moving to Phoenix. However, the city has plans to grow tremendously over the next ten years. According to Lang and Nelson, “The highest flyer of all