Assignment:
Goode Financial is a diversified company concentrating in three areas: insurance and financial services (life, property and title insurance; insurance brokerage and management services; and consumer finance), travel (air travel and car rental) and manufacturing.
Each of these three areas is in competitions with a well-defined set of market rivals. Goode Financials strategy is to focus on key market segments related to its three primary businesses. Two major corporate objectives are to achieve a significant market share in each business segment and to achieve industry leadership in terms of service, reputation, innovation and efficiency.
Subsidiaries of Goode Financial benefit from being part of a larger corporation. Funds may be borrowed at a low cost, capital may be allocated among subsidiaries and corporate staff provides centralised strategic planning, investment and real estate management and data processing. Among Goode Financials major subsidiaries are Rational Life, Goode Transport, Goode Airlines and Easy Rent-A- Car.
Rational's life insurance is sold most actively in the eastern states of Australia. Rational's speciality is low-cost insurance with term-like rates. This type of insurance represents 85% of its direct ordinary volume, but the overall market growth is slow. Rational response to changing customer need with new products, such as its new product offering for two annuities that funds IRA (Individual Retirement Accounts) and a policy combining the features of term and whole of life insurance.
Goode Transport operates a transport-equipment leasing business. The equipment - including cargo containers, piggyback trailers and over-the-road trailers are maintained and repaired by company-owned repair shops and mobile service units. But this equipment is old and they have been losing customers, despite enjoying operating-cost advantages.
Goode Airlines flew to more locations around the world than any other airline. To compete, Goode Financial has refurbished many aircraft. Improved fuel conservation and noise reduction now complement superior passenger accommodation. Goode Airline's low-cost approach makes it a major national airline, in a fast growing industry.
Easy Rent - A - Car provides the same service as many of its competitors but a lower rate. Easy has expanded to provide service are airports and supports its dealers with a nationwide, toll-free, computerised reservation network. It has an exclusive agreement with a leading department store chain to operate concessions for Easy's car rentals. All the strategies for this subsidiary are geared towards maintaining market share.
Goode Financial is aware of the marketing environment is an important consideration in adapting a product to meet market needs. Consistent with its strategies to achieve significant market share and become an industry leader, Goode Financial is diversifying to achieve low-cost marketing in all areas, Goode Financial is diversifying to achieve low-cost marketing in all areas. Goode Financial is currently evaluating how best to proceed with its marketing strategy
1 Prepare a SWOT on Goode Financial 2 Strengths, 2 Weaknesses, 2 Opportunities and 2 Threats
2 Using the BCG matrix approach, how would you classify each of Goode Financials SBU's?. Explain your answer.
There are four types of SBUs:
Stars. High growth, high share businesses or products. They will turn into cash cows.
Cash cows. Low growth, high share businesses or products. They produce a lot of cash for the company.
Question marks. Lowshare business units in high growth markets. They require a lot of cash to hold their position.
Dogs. Low growth, low share businesses and products.
One of four strategies can be pursued for each SBU.
3 The company needs to decide a whether to build its share, invest enough to hold its share, it can milk its short-term cash flow or harvest or it can divest by selling it or phasing out.
4 Based on your answer to Question 3, which SBU would you consider selling? Which one would you keep? Explain why?
5 Recommend an appropriate strategy for the future of Goodes