STATE FARM INSURANCE COMPANIES: A STRATEGIC ANALYSIS
State Farm is the leading personal (automobiles, property, and casualty) insurer in the United States. The mutual company is in a strong industry position and has positive profit potential for the coming five years. Poor relations with customers and state insurance regulators, however, threaten the company's future prospects.
This research develops a strategic analysis of State Farm Insurance Companies (official name) headquartered in Bloomington, Illinois. The firm includes wholly owned subsidiaries through which the firm operates in a variety of business lines in the financial services sector. Additionally, State Farm Insurance Companies is a mutual company, as opposed to a stock company. Thus, stock market data are not available for the financial analysis component of this strategic analysis. The elements of the strategic analysis of State Farm Insurance Companies are as follows: (1) company mission; (2) industry analysis; (3) strengths ù weaknesses ù opportunities ù threats analysis (4) competitive analysis; (5) organizational structure of competitors; (6) business portfolio structure and analysis; (7) functional area strategy analysis; and (8) strategic recommendations.
State Farm states that the company's mission is to "help people manage the risks of everyday life, recover from the unexpected and realize their dreams." The company's mission statement incorporates its advertising theme that State Farm Companies "make it our business to be like a good neighbor à by selling and keeping promises à."
State Farm states that its success depends upon "quality service and relationships, mutual trust, integrity and financial strength." Its vision for the future is to "be the customer's first and best choice in the products and services we provide. We will continue to be the leader in the insurance industry and we will become a leader in the financial ser...