Bank of America VRIO / VRIN Analysis | Assignment Help

What is VRIO / VRIN Analysis ?

VRIO stands for – Value of the resource, Rareness of the resource, Imitation Risk, and Organizational Competence.

VRIO is a resource focused strategic analysis tool. To build a sustainable competitive advantage the resources that –casename— needs to be valuable, rare, and difficult to imitate. Secondly the –casename— needs to possess capabilities, organizational structure, and culture to optimize the available resources usage. VRIO analysis can help organizations such as Bank of America to do better resource allocation and build a defensible value and supply chain.

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What is a Valuable Resource for Bank of America? Defining Valuable in VRIO

A resource or capability is considered valuable for Bank of America , if it allows the Bank of America to exploit opportunities or negate threats emerging out of both the micro business environment and the macro environment. If a resource does not allow Bank of America to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Bank of America.

What are Rare Resources for Bank of America? Defining Rare in VRIO

In an industry that Bank of America operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Bank of America require rare resources to compete in the industry. If Bank of America don’t have rare resources that are required to succeed in the industry then Bank of America won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Bank of America competitive advantage against players that don’t have those rare resources. HBR Case Study Solution

What is a Inimitable (Difficult to Immitate) Resource for Bank of America? Defining Inimitable in VRIO

A valuable and rare resource can provide a competitive advantage to Bank of America for certain period of time as all the competitors are going to try to imitate or replicate that resource. A sustained competitive advantage emerges, if the resource is difficult to imitate by the competitors. Bank of America can create inmitability by innovating on the product side, reducing pain points on service delivery, and having an effective post sales servicing strategy. Check out the SWOT analysis of Bank of America

What is a Organization for Bank of America? Defining Organization in VRIO

Even if the Bank of America has all the valuable resources that are both rare and difficult to imitate, it won’t automatically result into a sustainable competitive advantage. The key to build the sustainable competitive advantage is to have organizational capabilities, expertise, and structure to exploit the resources. If Bank of America is not organized based on its strengths then it won’t able to exploit all the resources that it possesses.

Resources	Value	Rare	Imitation	Organization	Competitive Advantage
Bank of America Customer Network and Loyalty	Yes, 23% of the customers contribute to more than 84% of the sales revenue	Yes, firm has invested to build a strong customer loyalty	Has been tried by competitors but none of them are as successful as Bank of America	Bank of America is leveraging the customer loyalty to good effect	Provide Bank of America medium term competitive advantage
Opportunities in the E-Commerce Space for Bank of America - using Present IT Capabilities	Yes, the e-commerce space is rapidly growing and Bank of America can exploit the emerging opportunities	No, most of the competitors are investing in IT to enter the space	The AI and inhouse analytics can be difficult to imitate	It is just the start for the organization	In the long run it can provide sustainable competitive advantage
Brand awareness of Bank of America products and services	Yes, the brand awareness of Bank of America products are high	Yes, Bank of America has one of the leading brand in the industry	No	Bank of America has utilized its leading brand position in various segments	Sustainable Competitive Advantage
Financial Resources of Bank of America	Yes	No	Financial instruments and market liquidity are available to all the nearest competitors	Bank of America has reasonably sound financial position	Bank of America has relatively sustainable Competitive Advantage
Supply Chain Network Flexibility of Bank of America	Yes	Yes	Near competitors also have flexible supply chain and share some of the suppliers	Fully utilized by Bank of America organizational structure and capabilities	Keeps the business running
Distribution and Logistics Costs Competitiveness	Yes, as it helps Bank of America in delivering lower costs	No	Can be imitated by competitors of Bank of America but it is difficult	Yes	Medium to Long Term Competitive Advantage
Opportunities for Brand Extensions for Bank of America products	Yes, new niches are emerging in the market	No, as most of the competitors are also targeting those niches	Yes can be imitated by the competitors	Brand extensions will require higher marketing budget	Temporary Competitive Advantage
Intellectual Property Rights, Copyrights, and Trademarks	Yes, they are extremely valuable for Bank of America to thwart competition	Yes, IPR and other rights are rare and competition of Bank of America will find it extremely difficult to copy	Risk of imitation is low but given the margins in the industry disruption chances are high	So far the firm has not utilized the full extent of its IPR & other properties	Providing Strong Competitive Advantage
Customer Community of Bank of America	Yes, as customers are co-creating products	Yes, the Bank of America has able to build a special relationship with its customers	It is very difficult for Bank of America competitors to imitate the culture and community dedication	Going by the data, there is still a lot of upside in building on Bank of America customers community ecosystem	Providing Strong Competitive Advantage
Ability to Attract Talent in Various Local & Global Markets	Yes, Bank of America strategy is built on successful innovation and localization of products	Yes, as talent is critical to firm's growth	Difficult to imitate for the current competitors of Bank of America	To a large extent yes	Providing Strong Competitive Advantage
Track Record of Leadership Team at Bank of America	Yes	Yes	Can't be imitated by competitors	Yes	Providing Strong Competitive Advantage
Talent to Manage Regulatory and Legal Obligations	Yes	No	Can be imitated by competitors	Yes	Not critical factor
Product Portfolio and Synergy among Various Product Lines of Bank of America	Yes, it is valuable in the industry given the various segmentations & consumer preferences.	Most of the competitors are trying to enter the lucrative segments	Can be imitated by the competitors	The firm has used it to good effect, details can be found in case exhibit	Provide short term competitive advantage but requires constant innovation to sustain
Marketing Expertise within Bank of America	Yes, firms are competing based on differentiation in the industry	No, as most of the competitors also have good marketing departments and expertise	Pricing strategies of Bank of America are often matched by competitors	Yes, Bank of America is leveraging both its inhouse marketing department and external expertise	Temporary Competitive Advantage

Bank of America SWOT Analysis, SWOT Matrix, Weighted SWOT Case Study Solution & Analysis

Books and References

Ahir Gopaldas and Anton Siebert (2022 July August) "What You’re Getting Wrong About Customer Journeys", Harvard Business Review , 92
Linda A. Hill, Emily Tedards, and Taran Swan (2021) "Drive Innovation with Better Decision-Making", Harvard Business Review 86
Dyer, J. H., & Hatch, N. (2004). Using Supplier Networks to Learn Faster. Sloan Management Review, 45(3), 57–63
Barney, J. B. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17, 99–120
Dyer, J. H., Kale, P., & Singh, H. (2004, July–August). When to ally and when to acquire. Harvard Business Review, 109–115