Competitive Advantage: RACV and Allianz Marketing Strategy Report

This report provides an analysis of the marketing strategies employed by RACV and Allianz in the Australian roadside assistance sector. The report begins with executive summaries and tables of contents, followed by an introduction that highlights the competitive nature of the industry. It then delves into the business operations of RACV and Allianz, detailing their service offerings and customer engagement approaches, including RACV's membership-based model and Allianz's focus on intelligent roadside assistance. The report examines the competitive advantages of each company, attributing RACV's success to its market focus strategy and customer engagement, and Allianz's to its extensive market coverage, market penetration, and product differentiation strategies. The analysis is supported by references to academic literature and news articles. The conclusion summarizes the distinct sources of competitive advantage for each company, emphasizing their effective yet contrasting business approaches.

Running head: MARKETING STRATEGY
Marketing strategy
Name of the student
Name of the university
Author note

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Executive summary
The aim of this report is to discuss about the sources of competitive advantages gained by RACV
and Allianz in the road assistance sector of Australia. In this report, two case studies are being
chosen in relation to the business approach of these organizations. In addition, the business
operation along with the brief introduction of these organizations is also being given. This report
concludes that the sources of gaining competitive advantages are different for both companies
yet they are gaining profit and revenue from the market.

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Table of Contents
Introduction......................................................................................................................................3
Business operation of RACV...........................................................................................................3
Business operation of Allianz..........................................................................................................4
Competitive advantages for RACV.................................................................................................5
Competitive advantages for Allianz................................................................................................6
Conclusion.......................................................................................................................................7
Reference.........................................................................................................................................9

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Introduction
In the current business scenario, there are number of sources and strategies being used by
the business organizations in order to gain competitive advantages. This is much important in the
current time due to the reason that the current business state of affairs is much more competitive
in nature with the presence of number of players in different business sectors. This is also
leading some of the business organizations in entering in innovative business sectors to attract
the customers (Pisano, Pironti and Rieple 2015). One of these distinctive business sectors is
roadside assistance provided to the customers. There are number of instances of breaking down
of vehicles in middle of roads and travelers face the issue of towing their vehicles. In this case,
roadside assistance companies can helps them in providing the instant towing service along with
other services.
However, this sector is also witnessing growth in terms of demand and competition and it
is leading the organizations operating in this sector to come up with new approaches and
strategies to gain competitive advantages. In the recent time, RACV and Allianz came up with
unique activities and strategies that helped them to gain competitive advantages (Wrigley and
Straker 2016). This report will discuss about the sources through which these two companies
gained competitive advantages. In addition, the information of them will be gathered from the
news articles selected.
Business operation of RACV
Royal Automobile Club of Victoria is the leading roadside assistance company in the
Victorian region of Australia. They offer diverse services to the customers but they operate on
community and membership basis. According to their business strategy, membership should be

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taken in order to avail their services. These services are much diverse and ranges from insurance
services, home security systems to financial services and tours and tourism (www.racv.com.au
2018). Thus, members of RACV are having the opportunity to have the access this wide range of
services.
According to the selected journal article, RACV is initiating newer strategies and
approaches in taking their business to next level. According to Jordan (2014), RACV initiated
global approach in creating awareness among the customers regarding the safety features in the
cars. The authors have also stated that in the recent time, there are numbers of new safety
technologies are being added in the cars but only a minority of the customers is having the real
understanding about the utility of these safety features. On the other hand, customers are also
largely unaware about the car models that will have less impact on the users in case of the
accidents (Kadas and Chatzimisios 2013). According to the author, RACV initiated the scheme
of educating their members about these factors and aim to make the roads more safe and
accessible. Though, these activities are not related to their core business offerings but it will
enhance the engagement level of their members. In addition, this will also generate positive word
of mouth from their existing customers.
Business operation of Allianz
Allianz is another major player in roadside assistance industry. They are also operating in
Australia. However, the business strategy is different from that of the RACV in terms of
customers. Allianz provides services to their customers for charges rather than following the
membership strategy of RACV (Allianz.com.au 2018). Thus, their services can be availed by
anyone at any point of time. In addition, while the services of RACV are more diverse covering

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different areas, services of Allianz are more focused on the core roadside assistance by means of
towing facility and car maintenance and service.
According to Datta and Bonnet (2017), in the recent time there are number of roadside
assistances are available in the market. However, the major differentiating factor among all these
is the intelligent roadside assistances. This refers to the process of integrating all the elements of
the roadside assistances that will further enhance the utility of the customers. The authors have
also stated the examples that can be included in the intelligent road assistance system such as
mobile app (Gong et al. 2013). This will help the users to have the access to the facilities at any
point of time. In regards to this concept, Allianz is also developing their business operation in
this sector. They are already having offers such as providing towing facility to the remote areas.
Competitive advantages for RACV
The major source of competitive advantages for RACV is the word of mouth from their
existing customers. It is reported that the intensive marketing strategy of RACV is much more
effective and efficient compared to the extensive marketing activities of some other
organizations such as 7 eleven (www.afr.com 2018). In terms of the Porter’s generic strategy,
RACV follows the market focus strategy over the cost leadership and product differentiation.
This is due to the reason that RACV operates and offer products on to their members and thus
they offer services according to the taste and preference pattern of their limited number of
members. On the other hand, there is no point of them to initiate differentiation strategy due to
the reason that RACV do not attracts new customers rather they offer standardized services and
customers subscribing their services will be provided the same services. Thus, it can be
concluded that with the help of the market focus strategy, RACV is focusing only on their

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existing customers and this is helping them to have enhanced level of customer loyalty and
retention. This can also be considered as their competitive advantage due to the reason that they
are having lower probability of losing their existing customer base to their competitors.
It is also being reported that the generation of positive word of mouth from their existing
customers is another source of competitive advantage for RACV. This is due to the reason
positive word of mouth cannot be imitated or cloned by their competitors and it is to be earned.
The effectiveness of positive word of mouth of the existing customers is more in attracting new
customers compared to other mediums (Alexandrov and Babakus 2013). In accordance to this
objective, RACV initiates the strategy of customer engagement in order to extensively engage
with their customers. One of the major examples of their customer engagement strategy is
offering diverse services. The services offered by RACV ranges from the insurances to towing
facility to lifestyle advocacy. They are having town resorts that can be availed by the members.
This is increasing the level of engagement and satisfaction of their members, which is leading to
generation of positive word of mouth in the market. Hence, effective implementation of market
focus strategy and customer engagement programs is acting as the major source of gaining
competitive advantages for RACV.
Competitive advantages for Allianz
The source of gaining competitive advantages for Allianz is different to that of the
RACV. Allianz initiates extensive market coverage strategy in order to gain competitive
advantages. According to the reports, they are not having any membership terms like RACV and
thus they target the entire market. This helps them to cover the larger market and generate more
revenue. In addition, the also initiated the strategy of market penetration to enhance their

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presence in the existing market. According to the Ansoff’s matrix, market penetration refers to
the introduction of more product or service variants in order to cater to the customers across
different levels. In accordance to this strategy, Allianz offers different facilities in relation to the
roadside assistance (Medarac, Vignali and Vignali 2016). These facilities include emergency fuel
supply, towing facility to the remote area, taxi service and most importantly entire Australia wide
services (www.whichcar.com.au 2018). All these services related but are offered differently in
order to cater to different needs of the customers. This is helping them to have favorable
penetration in the market with having larger revenue and sales volume.
Another major source of gaining competitive advantages for Allianz is product
differentiation strategy. Allianz initiates this strategy due to the reason that majority of the
roadside assistance providers are offering same services and it is important to differentiate in
order to create the distinctive image in the image. In this case, Allianz offers entire Australia
wide services including towing facility to the farthest area. This service is not provided by any
other players in this sector including RACV (Zehir, Can and Karaoga 2015). Hence, it can be
concluded that offering the same services with having different approaches is helping Allianz to
have distinctive brand identity in the market and helping them in gaining competitive advantages
in the market.
Conclusion
Thus, it can be concluded that both RACV and Allianz are having different sources of
competitive advantages. In this report, the major sources of gaining competitive advantages of
these two companies are being discussed and evaluated. In addition, the evaluation of these
sources is being done using journal articles reported about these companies. This report

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concludes that RACV gain competitive advantages from their market focus strategy while
Allianz gain their competitive advantages from their extensive market coverage strategy and
market penetration strategy. However, it can also be concluded that both the companies are doing
good job in terms of their business regardless of having different business approach.

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Reference
Jordan, C., 2014. RACV takes a global approach to road safety. Journal of the Australasian
College of Road Safety, 25(3), p.56.
www.whichcar.com.au (2018). Advice: Roadside Assistance In The Bush. [online] WhichCar.
Available at: https://www.whichcar.com.au/gear/advice-roadside-assistance-in-the-bush
[Accessed 5 Aug. 2018].
www.afr.com (2018). How RACV showed doing the right thing can be the best business model of
all. [online] Financial Review. Available at: https://www.afr.com/business/how-racv-showed-
doing-the-right-thing-can-be-the-best-business-model-of-all-20150901-k9zc7 [Accessed 5 Aug.
2018].
www.racv.com.au (2018). RACV | Roadside Assist, Car Loans, Insurance & Travel. [online]
@RACV. Available at: https://www.racv.com.au/ [Accessed 5 Aug. 2018].
Pisano, P., Pironti, M. and Rieple, A., 2015. Identify innovative business models: can innovative
business models enable players to react to ongoing or unpredictable trends?. Entrepreneurship
Research Journal, 5(3), pp.181-199.
Wrigley, C. and Straker, K., 2016. Designing innovative business models with a framework that
promotes experimentation. Strategy & Leadership, 44(1), pp.11-19.
Kadas, G. and Chatzimisios, P., 2013. The Role of Roadside Assistance in Vehicular
Communication Networks: Security, Quality of Service, and Routing Issues. In Roadside
Networks for Vehicular Communications: Architectures, Applications, and Test Fields (pp. 1-
37). IGI Global.

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Gong, H., Liu, N., Yu, L. and Song, C., 2013. An efficient data dissemination protocol with
roadside parked vehicles' assistance in vehicular networks. International Journal of Distributed
Sensor Networks, 9(11), p.317560.
Zehir, C., Can, E. and Karaboga, T., 2015. Linking entrepreneurial orientation to firm
performance: the role of differentiation strategy and innovation performance. Procedia-Social
and Behavioral Sciences, 210, pp.358-367.
Alexandrov, A., Lilly, B. and Babakus, E., 2013. The effects of social-and self-motives on the
intentions to share positive and negative word of mouth. Journal of the Academy of Marketing
Science, 41(5), pp.531-546.
Medarac, H., Vignali, G. and Vignali, C., 2016. Improving relations between business strategy
and marketing tactics. International Journal of Business and Globalisation, 16(1), pp.50-65.
Datta, S.K. and Bonnet, C., 2017, June. An IoT framework for intelligent roadside assistance
system. In Consumer Electronics-Taiwan (ICCE-TW), 2017 IEEE International Conference
on (pp. 353-354). IEEE.
Allianz.com.au (2018). Allianz Roadside Assistance - 24/7 Help Australia Wide From $99/Year.
[online] Allianz.com.au. Available at: https://www.allianz.com.au/roadside-assistance/
[Accessed 5 Aug. 2018].