1. USAA is financial services company that provides insurance, banking, investment, and financial planning products to its U.S. military-affiliated customers around the world and is known for its innovative technology and high-quality customer servicelowcost. 2. The threat of new entrants to the financial services industry is low-moderate. Barriers to entry for the primary segments of insurance and banking would be capital-intensive investments in infrastructure and the time required to create a reputable brand. However, with respect to investment and financial advice products, mobile technology has lowered this barrier and created an increased level of competitive force in this areaSmith. Buyer negotiating force is weak because they have minimal leverage as individuals. However, aggregately, they do have some limited influence with undifferentiated products that have low customer switching costs. With suppliers of labor and deposits, bargaining power is low because most employees and mainline customers do not have tremendous individual influence over the company. USAA’s offerings have many viable substitutes and therefore this competitive force is strong. Online savings accounts, integrated budget managing software, digital payments processors, peer-to-peer lending companies, …show more content…
This has the secondary effect of improving the member experience since they are on the receiving end of an annual payout – receiving $1.6 billion in 2015Shanker-Fortune. In order to create true differentiation and increase willingness to pay, USAA combines all of these complementary activities to create a lasting infrastructure that is nearly impossible for anyone to emulate. All of this excess value appropriated to the buyer manifests itself in the consistent high marks among customer surveys and the dedicated loyalty of its customer