USAA SWOT Analysis
Management 303 SWOT Analysis of USAA
Section I – Organizational History
Fortune 500 company, United Services Automobile Association (USAA) began as a small group of 25 U.S. Army officers in 1922. Nearly 90 years later, it is now an organization with more than 7.4 million members, offering banking, investing, retirement and insurance services worldwide. Since its inception, USAA has expanded membership eligibility to include all members of the Armed Forces and their family. What makes USAA stand out is that it is not a corporation, but an inter-insurance exchange. This allows each member to be insured by every other member concurrently, yet only liable for the premiums which they have paid in. Since there are no shareholders, profits are either retained by USAA or distributed to the members via the Subscriber’s Savings Account (SSA). The mission of USAA is to provide stable and trustworthy financial products and services to military service members and their families in order to ensure financial security (Robles, 2011, p.3). Section II – Strengths and Weaknesses
USAAs ability to offer a variety of member benefits and financial strength are advantages for the company, while few brick and mortar locations and lack of personalized service are weaknesses.
Strength #1 – Plethora of Member Perks Keep Members Happy
The first organizational strength is the wide variety of member benefits available. No other financial institute in the field can offer the plethora of member perks that USAA offers. Benefits include free access to financial advisors (not paid on commission), reimbursement of ATM fees, youth banking, free checking and bill pay. Also very much worth noting is the Movers Advantage Program which matches you with a USAA approved Realtor and pays you to use them. Auto Circle program offers the lowest price guarantee at 3,000 USAA certified dealerships on new and used vehicles. USAA also has been known to offer the lowest interest rates on mortgages, personal and auto loans. Since this company has no shareholders, it is able to distribute some of its profits right back to the customer via the Subscriber’s Savings Account (SSA). USAA is known for these great perks that no other organization is able to offer. This combination of benefits is a distinctive competence for the company.
Strength #2 – Financial Strength
The second organizational strength is excellent financial health. Standard and Poor’s has bestowed a rating of “Extremely High” financial strength, the highest rating attainable, to USAA. (S&P Affirms USAA Ratings; Outlook Stable, 2004). According to The San Antonio Business Journal, A.M. Best Co. has rated USAA with a “superior A++” in financial strength (San Antonio Business Journal, 2008). Perhaps, most noteworthy, CNNmoney.com rates USAA as #132 on the Fortune 500 listing for 2010, noting a profit of more than $3,020,000 (CNN Money, 2010). Though these awards and rating are impressive, I would not say that it’s financial strength is a distinctive competence as other financial institutes brought in large profits and were also named Fortune 500 companies.
Weakness #1 – Few Brick & Mortar Facilities
The first organizational weakness is the lack of brick and mortar buildings. At present time, there are only eight physical locations worldwide. This can be a weakness for many members for several reasons. If you do not live near a USAA bank, you lose the ability to make deposits and withdrawals in person, nor are you able to sit down with loan officers, insurance personnel, or retirement planners. Many people prefer this kind of direction and service, especially when it comes to an individual being uncertain about options relating to their finances and planning. This is an inability to provide a certain level of service to the customer, which in many cases allows the member piece of mind and added comfort. This inconvenience can be neutralized with the...
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