• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Conseco Inc. Case Analysis

Extracts from this document...

Introduction

Conseco Inc. Case Analysis By: Aaron Rogers & Suzanne Davis Submitted on: 5/1/2004 Submitted to: Professor Herrity California Baptist University BUS 547a - Strategic Management (Spring 2004) Table of Contents Identification Overview of the Case Identification of Problems Analysis Strategic Management Tasks Generic Strategy Drivers of Change Key Success Factors Recommendations Additional Findings Sources Identification Conseco Inc. is a diverse financial organization providing services in insurance, risk management, investments, consumer finance and lending services markets. The company's customers are primarily middle income individuals and families and senior citizens. Conseco was incorporated in 1979 as a life insurance holding company and quickly devoted its efforts to rapid acquisition of other financial companies throughout the industry. The company was often characterized as entrepreneurial due to a history of growth through acquisition. The company grew to $95 billion in assets, 13 million customers and 14,500 employees by the year 2001. One of the riskiest acquisitions Conseco made was that of Green Tree Financial Corporation, which ultimately tripled the cash management departments wire transfer volume. The Cash Management department will be the focus of the analysis and recommendation set forth by the authors of this paper. During the rapid growth period of Conseco, the board of directors hired former CEO of General Electric Capital Corporation, Gary Wendt. The leadership provided by Mr. Wendt to the organizational structure was to strategically push decision making and accountability down to the business units. His philosophy, to first re-define the business units and then for the business units each to become committed to process excellence meanwhile he tied the officer's compensation to those specifically designed goals. ...read more.

Middle

These changes resulted in a more flattened organization. A organization in which employees at all levels were educated in the goals of their specific business unit and where year-end bonus compensation was tied to the meeting of business unit goals (Thompson & Strickland C-665). The managers of the SBU's were given the freedom to make strategic business decisions. This very freedom is what allowed Robert McNutt to pursue the creation and implementation of an unbudgeted web-based cash management system, though it could be argued that the decision to go forward with the new system was not truly an option. The textbook makes clear that McNutt's team was short of staff and was overworked (Thompson & Strickland C-661 & C-662). That fact being stated, the Cash Management team had to come up with a way to automate the wire-transfer system or they were "sunk" (a key success factor). Also, McNutt was under "top-heavy" pressure to make sure that whatever systems he put in place complied with the corporate objectives of cost-cutting and process streamlining. The strategy that was implemented by Cash Management group was to streamline their processes. The objectives for the project were simply to eliminate the cumbersome and tedious manual processes, and evolve into the new system. Implementation of the strategy to achieve this objective appeared to be well thought out and widely accepted within the centralized corporate structure. As stated above the other key factor was the monetary compensation tied into the success of controlling overhead costs. This focused low-cost strategy was starkly different than Conseco's previous two decades of pursuing broad differentiation through continuous acquisition. ...read more.

Conclusion

Additional Findings Insurer Ratings from www.conseco.com (4/30/2004) Subsidiary Claims-Paying/ Financial Strength A.M. Best Standard & Poor's Fitch Moody's Bankers Life and Casualty B 9/11/03 BB- 11/19/03 B 9/12/03 Ba3 12/4/03 Bankers National Life NR-2 Bpi N/R N/R Conseco Annuity Assurance (formerly American Life and Casualty) B 9/11/03 BB- 11/19/03 B 9/12/03 Ba3 12/4/03 Colonial Penn Life Insurance Company B 9/11/03 BB- 11/19/03 B 9/12/03 Ba3 12/4/2003 Conseco Health Insurance Co. (formerly Capitol American Life) B 9/11/03 BB- 11/19/03 B 9/12/03 Ba3 12/4/03 Conseco Life B 9/11/03 BB- 11/19/03 B 9/12/03 Ba3 12/4/03 Conseco Life of New York B 9/11/03 BB- 11/19/03 B 9/12/03 N/R Conseco Life of Texas NR-2 N/R N/R N/R Conseco Senior Health (formerly American Travellers Life) B 9/11/03 CCC 11/19/03 CCC- 4/12/04 Caa1 12/4/03 Washington National Ins. Co. B 9/11/03 Bpi N/R Ba3 12/4/03 2004 Earnings expectation to be on the low end of the initial $175-$200 million projection due to lower interest rates and higher mortality rates in the first quarter than expected. (CBS Marketwatch 4/30/2004) Facing more the $6.5 billion in debt, on 12/17/2002, Conseco Inc. filed for what would become the 3rd largest bankruptcy in US history. The company emerged from the BK on 9/10/2003 a smaller, leaner, restructured, and arguably more focused organization than before. (www.hoovers.com 4/27/2004) Conseco Inc. sold off Conseco Finance (formerly Green Tree Financial) in June of 2003. The company has been re-branded as Green Tree Servicing Inc. (www.cfo.com and others 4/30/2004) Sources Strategic Management: Concepts and Cases by Thompson and Strickland, Thirteenth Edition, ISBN: 0-07-244371-5 Insurer Ratings pulled from: http://www.conseco.com/conseco/selfservice/about/cprofile/ratings.jhtml?cat=cprofile&subcat=ratings 2004 Earnings Estimation pulled from: http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid=%7B3649A76E%2DD698%2D4F75%2DAABA%2DE9BC000DECB7%7D BK and Green Tree Servicing information pulled from several sources including: www.hoovers.com, www.reuters.com, www.forbes.com, www.cfo.com ?? ?? ?? ?? 1 Conseco Case Analysis, Aaron & Suzanne ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level ICT in Business section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level ICT in Business essays

  1. Business Aims and Objectives.

    To purchase these resources businesses night need to raise large sums of money, known as capital. This buys all the essential requirements, such as paying for a lease or buying premises, purchasing a company vehicle, buying stock and other equipment.

  2. SWOT Analysis.

    business may have problems with customers and helping customers getting what they want, but after the staff have dealt with these problems, they will know what to do and these problems will not occur again. When there is snooker on the television, radio or in the newspaper, people will feel

  1. Arrow Electronics Inc. - questions and answers.

    Thus if suppliers use jump balls to keep distributors in check, distributors are able to use design wins and competitive standardized products to counter balance their power. 6) How does the Arrow salesperson build a relationship with customers that buy B&S and VA products from Arrow?

  2. The purpose of this document is to define the Context of Cain Motors Information ...

    Cain Motors Change Request Date: 22/02/03 Project Manager: Mr Shirley Change Urgency: Low Change Manager: Mrs K Fuller Change Description: Version 1 of the original analysis was produced using the traditional waterfall method (SSADM). By using the Unified Modelling Language (UML)

  1. Ebay Case Study

    This feedback system is a key aspect of eBay's self-governing system. It is important to note that PayPal is not just an online payment system for eBay.com although with around 75% of eBay.com's transactions settled through PayPal which allows

  2. Amazon Case Analysis

    Continue to cut costs by entering into partnerships with other ecommerce retailers. Amazon.com is one of the most well-known online retailers. The company has accomplished as much, if not more, than any other online retailer in its short existence.

  1. Apple Incorporation - Case Analysis

    Software designers are not as enthused about writing programs to support Apple's operating system because of limited potential sales. The advantages that seem to come into Apple's laps are quickly removed because competitors are able to copy, steal, and share them.

  2. Critical Success of PVR cinemas in India

    Better cost management and Operating efficiencies - Economies of scale and shared resources across screens. 4. Increased preference by distributors - Due to a more transparent box-office reporting practice and location advantages enjoyed. Elements of Cost The main cost components of a multiplex are: 1.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work