USAA is a Fortune 500 insurance and financial services company with 2016 annual revenues exceeding $27 billion. The company was founded in 1922 by 25 Army officers who decided to insure each other’s vehicles and continues to limit its membership to active duty and retired military members, officer candidates, and adult children and spouses of military-affiliated USAA members. The company has received countless awards, including being listed among Fortune’s World’s Most Admired Companies in 2014 through 2016 and 100 Best Companies to Work For in 2010 through 2016. USAA was also ranked as the number-one Bank, Credit Card and Insurance Company by Forrester Research from 2013 to 2016. You can read more about the company’s history and strategy at www.usaa.com.

How would you characterize USAA’s competitive strategy? Should it be classified as a lowcost provider strategy? A differentiation strategy? A best-cost strategy? Also, has the company chosen to focus on a narrow piece of the market, or does it appear to pursue a broad market approach? Explain your answer.