Case Study: Conseco Essay

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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
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Conseco hoped Green Tree would fill several gaps in the company’s product lines, en route to realizing their vision of being a full service financial institution. Situation Analysis
Green Tree was a natural fit for Conseco due to both companies targeting the same market of American consumers with incomes between $25,000 and $75,000. Conseco was also interested in Green Tree’s substantial customer database, which would allow for cross-promotions and cross selling. Executives believed this was an excellent avenue to increase customer bases for both companies and ultimately, increase profits.

Conseco purchased Green Tree for approximately $6 billion. Many investors speculated that the acquisition would place substantial burdens on the company, including financial and human resources. In addition to the initial doubt of the success of the acquisition, several external factors, such as a downturn in the economy and Russia’s economic crisis, caused investors to doubt Conseco’s ability to turn a profit with Green Tree.

This assumption would prove true, as Green Tree would drain more revenues than it produced. In light of the difficult times, Conseco hired former General Electric Capital Corporation CEO, Gary Wendt. Wendt hoped to turn Conseco around amidst doubt and frustration.

Problem Analysis

Operational
Conseco faced several operational problems; however, Wendt solved most of them during his time at the company. One of the company’s main

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