Case Study: Conseco

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Case Study: Conseco

Introduction

Imagine a multi-billion dollar company with a vision to be a full-service investments firm. The firm acquires a company in hopes of increasing the bottom line; however, the acquisition only places tremendous resource burdens on the company.

This scenario became a reality for Conseco, a leading source of insurance, investment and lending products. In 1998, Conseco purchased Green Tree Financial Corporation (Green Tree), a company providing various financial services. Conseco had intended for Green Tree would to propel it into a market leadership position; however, the exact opposite occurred.

This essay will provide an overview of Conseco, a situational analysis, a problem analysis including analysis of each business function, recommendations for the company, and a plan for implementing the proposed recommendations. The essay will focus on the acquisition of Green Tree and the subsequent implementation of a web-based cash management system.

Case Overview

Conseco services the extensive financial marketplace concentrating on the areas of insurance/risk management, investments and consumer finance/lending. These vast product offerings provided Conseco with a healthy revenue stream and a leadership position in the marketplace.

In 2001, the company had nearly $95 billion in managed assets, employed nearly 14,500 people and serviced 13 million customers. The company was financially sound throughout the 1980’s and 1990’s as annual returns continually increased. The company was hailed as a “great entrepreneurial success story.”

The soundness of Conseco would soon come to an end as the company continued to grow and amass assets, including Green Tree in 1998. Green Tree wa...

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...e essay focused on the acquisition of Green Tree and the subsequent implementation of a web-based cash management system.

Conseco’s goal to become a full-service financial institution took a step forward with the acquisition of Green Tree; however, the company failed to realize profits or a competitive advantage from the purchase. In the years following the acquisition, the company faced decreasing profits and decreasing stock prices. The acquisition that looked like a stepping-stone into market leadership suddenly appeared as a stepping-stone into bankruptcy.

Conseco must take a serious look at its future. If the company is going to survive in today’s cutthroat, ultra-competitive business world, it will need to take a serious look at its current financial status. The company will need to determine what’s more important – market leadership or survival.

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