Innovation and competition Essay Example | Topics and Well Written Essays - 1000 words

Innovation and competition - Essay Example For instance, the insurance industry is highly competitive thereby necessitating the need to have great marketing techniques among other skills in order to gain competitive advantage over the competitors. Focusing on two of the main insurance companies in the United States, Geico and State Farm Insurance, using VRIO analysis gives a clearer picture of how to gain competitive advantage in highly competitive sectors such as insurance. Several approaches can be used to attain an efficient marketing strategy. Some of the commonly used approaches include blue ocean strategy, porter’s five forces model, and advertising. The blue ocean strategy is deeply dependent on innovation and discovery of new consumer demands that are not yet explored. The blue ocean strategy focusses on improving the current market, for instance, by combining two or more closely related demands. In addition, it is highly dependent on the quality while still maintaining low costs of the products and services offered. The less valued products and services are replaced by the highly valued and demanded ones thereby raising the standards of the market and making it stronger. For example, the State Farm has many subsidiaries that offer great insurance services that range from fire, casualty, and mutual insurance among others. However, despite the increasingly many subsidiaries, State Farm has been able to fully satisfy it clients thereby creating unlimited loyalty. Additionally, Geico offers full time response service hence satisfying the customers fully. Moreover, Geico offers low rates to military personnel and government worker s which is arguably different from what some of the other insurance companies do. As a result, Geico has greatly grown over the recent surpassing some of the great insurance companies such as Allstate. According to a report by SNL, GEICO made $4.89 billion through direct premiums based on the third quarter of 2013 whereas Allstate