Prepaid Legal Case

Topics: Depreciation, Marketing, Free cash flow Pages: 3 (897 words) Published: June 10, 2012
Case Analysis of Prepaid Legal
1. Prepaid Legal is one of the earliest companies in the United States to market and to sell legal expense plans. The company adopts a cost leadership business strategy, providing 5 basic title benefits (Preventive Legal Services, Automobile Legal Protection, Trial Defense, IRS Audit Protection Services, and Preferred Member Discount) with a membership cost ranging from $10 to $25 per month. Moreover, Prepaid selects several market segments, in which it develops specific plans (Commercial Driver Legal Plan, Law Officers Legal Plan, and Business Owners’ Legal Solutions Plan) to compete. The key elements of PPD’s business strategy include:

* Marketing method
* Multi-level marketing strategy
Multi-level marketing encourages individuals to sell memberships and allows individual to recruit and develop their own sales organizations. Furthermore, this marketing strategy promotes face-to-face meetings with prospective purchasers and has the potential of attracting a large number of sales personnel within a short period of time. * Product and Satellite subscription sales

After the merger with TPN, PPD identified approximately 25 core products to be offered to the company’s sales associates. With a leaner structure, PPD focuses on continuing and increasing the number of digital satellite subscriptions sold, and thereby increases the value of the TPN communication platform. * The company currently markets Memberships on a closed panel basis, according to which the provider attorneys are paid a fixed fee on a per capita basis. Because such fixed fee payments do not vary based on the type and amount of benefits utilized by the members, closed panel memberships provide significant advantages to the Company in managing claims risk. * Operation

* Computerized management information system
The system automates and simplifies daily work by evaluating benefit claims, monitoring member use of attorneys, calculating amount of...
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