OGL 355 Leading Organizational

Innovation and Change:

Environmental Analysis
Objectives:
1. Perform an industry analysis on your Case Study Organization using Porter’s Five Forces
Industry Analysis.
2. Identify target market for Case Study Organization and strategies to maintain the audience.

Complete the following and turn in as a team assignment. There is no need to create any other
document, just complete this one, save as, and post for your team. Everyone earns the same
grade unless consequences of non-participation are enacted (see Worksheet 1b, #2). Make sure to
support your ideas, cite from the textbook, other course materials, and your research per APA
guidelines and as necessary. Minimums are set to ensure support for your discussion, while most
responses will need some type of support to add strength and validity. It is important to cite
definitions, and to earn Excellent the ideas need to be supported with source too. These
responses need to be based in some fact, not just the team’s opinion.

1a) What is a Porter's Five Forces Industry Analysis?

a. A Porter’s Five Forces Industry Analysis is a model that identifies the competition
in an industry. It analyzes the competition using five forces: existing competitors,
possible competitors’ consumers (buyer), resource providers (supplier), and
alternative industry providers. Understanding the forces that affect the industry
will help the business better strategize. It uses the industry's strengths and
weaknesses to its advantage to create a strategy. For example, if the competition
threat is high, a company may not be able to increase its prices due to the
possibility of being cut out. Thus, discerning an effective business strategy can
improve profitability for the future to remain ahead of competition (The
Investopedia Team, 2023).

1b) How would the team implement a Porter's Five Forces Industry Analysis?
● The team will implement Porters’ Five Forces Industry Analysis by researching
and identifying the potential threat of each force that could impact GEICO, a
subsidiary of Berkshire Hathaway. If there are any forces with a high threat, we
will strategize how to better market, price, invest, bargain or acquire better
suppliers. We will create a strategy that will place us in a competitive advantage
that would allow us to come out winning (MindTools, 2023).

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2) Pick the threat level of new entrants within the team’s organization’s industry.
● Threat Level of New Entrants is:
● High
● List 3 reasons why the team has chosen Low or High, using sourced material for
at least 1 of them to earn excellent, with other support as needed per APA
Guidelines.
i. The automotive insurance industry has relatively low barriers for entry. In
2020, there were 31 auto insurance startups that were deemed worth taking
a look at (startupill.com).
ii. Technological advances have made it easier for new players to enter the
market. Social media has become a hot place for agents and carriers to
connect with consumers (Forbes, 2020).
iii. The global auto insurance market size was valued at $739.3 billion in
2019, and is projected to reach $1.06 trillion by 2027; this growth
projection would appeal to companies wanting to expand into this
insurance segment.
3) Pick the bargaining power level of buyers within the team’s organization's industry.
● What one group does the team consider the buyers?
● The buyers of GEICO, a subsidiary of Berkshire Hathaway are drivers
aged 16 to 64 and businesses seeking automotive insurance at a fair price.

● Bargaining Power Level of Buyers is:

● Low

● List 3 reasons why the team has chosen Low or High, using sourced material for
at least 1 of them to earn excellent, with other support as needed per APA
Guidelines.
i. Customers in the automotive insurance industry have moderate buying
power. They have the ability to compare prices and switch between
companies with relative ease.
ii. GEICO operates in a price sensitive market and customers can choose
from a range of competitors offering similar products.
iii.

4) Indicate the bargaining power level of suppliers within the team’s organization's
industry.
● What one group does the team consider the suppliers?

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 ● The suppliers of GEICO, a subsidiary of Berkshire Hathaway are auto part
manufactures and repair facilities.

● Bargaining Power Level of Suppliers is:

● Low
● List 3 reasons why the team has chosen Low or High, using sourced material for
at least 1 of them to earn excellent, with other support as needed per APA
Guidelines.
i. GEICO’s size and market position enable it to negotiate favorable terms
with suppliers.
ii. GEICO relies on multiple suppliers and repair facilities across the nation
which reduces the dependence on any single entity.
iii.

5) Indicate the threat level of substitute products within the team’s organization's
industry based on the identified buyers in #3.
● Threat Level of Substitute Products is:
● Low

● List 3 reasons why the team has chosen Low or High, using sourced material for
at least 1 of them to earn excellent, with other support as needed per APA
Guidelines.
i. While there are alternative insurance providers, customers tend to prefer
established and reputable companies like GEICO.
ii. Potential substitutes could be ride-sharing or autonomous vehicles which
would impact the need for insurance altogether.
iii.

6) Indicate the threat level of industry rivalry within the team’s organization's
industry.
● Threat Level of Industry Rivalry is:
● High

● List 3 reasons why the team has chosen Low or High, using sourced material for
at least 1 of them to earn excellent, with other support as needed per APA
Guidelines.
i. The auto insurance industry is highly competitive and GEICO faces
rivalry from both established players and smaller regional insurers.
ii. Major competitors include Progressive, State Farm and Allstate which all
have strong reputations and brand recognition.

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 iii.

7) Who is the target market for the team’s selected Case Study Organization? Describe
the target market in 3-5 sentences providing at least one sourced material to earn
excellent.

The target market for the case study of GEICO, a subsidiary of Berkshire
Hathaway would have a target market of primarily individuals and businesses
seeking insurance coverage, Specifically, GEICO’s target market is males and
females ages 24-64 and appeals to customers with humor (Xaif, 2022). The
primary target market would be adults 25-49 with a household income of
$30,000+ according to Marketing Edge.

8) Identify at least 2 strategies to maintain the organization’s target market. Discuss in

at least 5 sentences and provide cited source material for both strategies to earn
excellent.

Due to the wide array of holdings that Berkshire Hathaway has the target markets vary
depending on the specific subsidiary. Below are strategies that pertain to GEICO, an
automotive insurance subsidiary.
● Strategy 1
One strategy to maintain target market in regards to GEICO would be to maintain
the humourous ad strategy with the gecko and camel. GEICO is known for the
commercials “Hump Day” with the camel and the gecko. The ads emphasize the
focus on “saving” versus “service” with the slogan, “Fifteen minutes could save
you 15% or more on car insurance (Tzanetos, 2023)\.” This will continue to
appeal to all drivers from ages 16 to 64 whether the consumer is seeking a new
policy or a replacement policy.

● Strategy 2

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 References

Adamkasi. (2019, March 25). Porter Five Force Analysis of Berkshire Hathaway - Porter
Analysis. Porter Analysis. https://www.porteranalysis.com/porter-five-force-analysis-of-
berkshire-hathaway/

Hivelr. (2023). Berkshire Hathaway, Inc. (BRK.A): Porter’s Five Forces Industry and
Competition Analysis. Hivelr. https://www.hivelr.com/2023/02/berkshire-hathaway-inc-
brk-a-porters-five-forces-industry-and-competition-analysis/

Mind Tools Content Team. Porter's Five Forces - The Framework Explained. MindTools.
Accessed July 9, 2023. https://www.mindtools.com/at7k8my/porter-s-five-forces

O’Neill, N. (n.d.). 5 reasons why millennials are buying manufactured homes. Triad
Financial Services. https://www.triadfs.com/news/5-reasons-why-millennials-are-buying-
manufactured-homes

Shareholder Letters. (n.d.). https://www.berkshirehathaway.com/letters/2022ltr.pdf

The Investopedia Team. (2023, June 19). Porter's 5 Forces Explained and How to Use the
Model. Investopedia. https://www.investopedia.com/terms/p/porter.asp

Tzanetos, G. (2023, January 27). GEICO’s marketing strategy through advertisements.

Investopedia. https://www.investopedia.com/articles/insurance/020117/look-geicos-
marketing-strategy.asp

Xaif. (2022, October 21). 360° marketing strategy of GEICO - 2023. IIDE.
https://iide.co/case-studies/marketing-strategy-of-geico

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