Improvingthe Performance and Competitiveness of the State Farm InsuranceCompany
Improvingthe Performance and Competitiveness of the State Farm InsuranceCompany
Ladiesand gentlemen, the management team, investors and suppliers of theState Farm Insurance Company, I am James Escobus, an associatebusiness consultant manager at Key Bank. I have been working as aconsultant manager at Key Bank for over 7 years. Besides, I have alsohad a keen interest in stock performance, and that has made me astore analyst — I have been a stock analyst for as long as I haveserved consultant manager. In my capacity as a stock analyst andconsultant, I have had a keen interest in the market performance ofState Farm insurance company, and I can confidently say it is hightime the firm should embrace certain strategic reforms to maintaincompetitiveness, growth, survival and productivity.
First,I wish to review the performance record of State Farm InsuranceCompany posted in 2015. As you know, the performance of the companywas not the best — the company’s profitability fell significantlyby as significant as 7 percent compared to 2014. The share pricesalso came down by 4 percent. The performance outcome does not stopthere — the company earned a negative media publicity for poorhuman resource management practices, which was cited to havetranslated to high employee turnover and low productivity. While itwould be premature to conclude that State Farm insurance Company’swoes to poor human resource management practices, the scenarionevertheless creates the allowance to attribute the challenges to theinability for the firm to make various strategic changes when theywere needed most. To a certain significant extent, the performanceoutcomes were reactions to external market forces and internal,organization issues, which would have been addressed using tacticalmanagement strategies (Hutt& Speh, 2014).
Ihave several suggestions to put forth about State Farm InsuranceCompany ahead of the close of the current financial year. Theseproposals can be broadly categorized into two: changing managementmodels, and striving to nurture innovativeness. The companyobjectives for the new year operations can, therefore, be stated as,“to improve the performance and competitiveness of the State FarmInsurance Company and enable it to regain its glory”. Before I turnto expounding on these two suggestions, I wish to first state that itis particularly possible for the company to renew its performance andreputation within just one year. Nothing is impossible!
Themanagement at State Farm Insurance Company has tended to focus onoperations, rather than the market efficiencies. In this regard,there is the need for the administration to embrace informed changemeasures to rise above this limitation. In particular, it will becritical for the management to adopt three measures: focus onincreasing the sales, seek internationalization, and practice vibrantmarketing. Successful marketing would be the kind that puts intoconsiderations the 4P elements of marketing mix, which touch onproduct, pricing, placement, and promotion. Increasing sales will goa long way in improving the profitability. Internationalization willenable the company to go beyond the borders and tap the opportunitiesthat accompany the globalization processes. The role ofinternationalization would increase the market share. Lastly, vibrantmarketing strategies will create the allowance to reach potentialcustomers and overcome the effects of competition that are being putup by the rivaling companies (Reid& Plank, 2014).
StateFarm Insurance Company has also been noted to be less innovative. Thecompany continues to lag behind its competitors in adoptingrevolutionary technologies, a process that has posed as a disserviceand paved the way for businesses that were less vibrant to edgecloser. Therefore, the company needs to embrace innovativeness.Indeed, innovation is critical to State Farm Insurance Company indifferent ways. In one way, for instance, innovations serve toincrease the efficiency of company’s service delivery processes,which are translated to competitive advantages. The derivativeefficiency could also be accompanied by reduced costs of production,making the company even more competitive. Different strategies canenable State Farm Insurance Company to increase the business’sinnovative capacity. First will be to train and develop employees.Training and development increase the knowledge, skills, andawareness about the areas of weaknesses, which makes them better towork and fulfill the organization goals. Secondly, organizationshould step up commitment towards business changes. In this case,commitment is seen in terms of leadership’s investment toinnovation, communication, and dedication to supporting theinnovative thinking through vision setting, recruitment, and rewardprocesses. Thirdly, State Farm insurance Company’s innovationcapacity could also be improved by nurturing creativity (Morris,Pitt & Honeycutt, 2013).
Ideally,the list of initiatives that State Farm Insurance Company couldundertake to bolster its innovativeness is endless. These effortscould include giving the employee the autonomy, defining the workroles, building trust, avoiding conflicts and nurturing openness,among others. Autonomy is particularly imperative because it enablesemployees to venture in developing different perspectives, withinwhich innovations arise. Other processes such as defining the workroles and building trust are also significant and are essentiallyaimed at creating an enabling environment to cultivate innovativeness(Anderson& Narus, 2014).It is worth noting that, to a certain degree, the course ofimplementing these changes can be demanding and may warrant specialattention to detail, collaboration, and embracing informed changemanagement strategies (Dwyer& Tanner, 2013).Nevertheless, it would still be important for the company to seekassistance for consulting companies to limit the chances of failure.
Inconclusion, ladies and gentlemen, the aim of this speech was topresent options for the State Farm Insurance Company to maintaincompetitiveness, growth, survival, and productivity. I have talkedabout the company in light of the acknowledgment that the companyperformance during the last financial year was poor. The company’sprofitability fell significantly by as significant as 7 percentcompared to 2014, while the share prices also came down by 4 percent.I have attributed this poor performance to the inability for thecompany to make various strategic changes when they were needed most.I have put forth several suggestions, which I broadly classified intotwo: changing management models, and striving to nurtureinnovativeness. Furthermore, I have suggested the need for themanagement to embrace informed change measure to rise above thislimitation. In particular, it will be critical for the management toadopt three measures: focus on increasing the sales, seekinternationalization, and practice vibrant marketing. I have alsosuggested that the company should embrace innovativeness because itcontinues to lag behind its competitors in adopting revolutionarytechnologies, a process that has posed as a disservice and paved theway for companies that were less vibrant to edge closer. Lastly, Ihave suggested that the course of implementing these changes can bedemanding and may warrant special attention, even justify the need toseek the services of business consultants. I believe these steps willenable the company to come back to track.
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Morris,M., Pitt, F. & Honeycutt, E. (2013) Business-to-BusinessMarketing: A Strategic Approach,Sage Publications Inc.
Reid,D. & Plank, E. (2014). Fundamentalsof Business Marketing Research.The Haworth Press, Inc.