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Santander 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 Santander to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Santander? Defining Valuable in VRIO
A resource or capability is considered valuable for Santander , if it allows the
Santander to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Santander to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Santander.
What are Rare Resources for Santander? Defining Rare in VRIO
In an industry that Santander operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Santander require rare resources to compete in the industry. If Santander don’t have rare resources that are required to succeed in the industry then Santander won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Santander competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Santander? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Santander 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. Santander 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 Santander
What is a Organization for Santander? Defining Organization in VRIO
Even if the Santander 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 Santander 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 |
---|---|---|---|---|---|
Track Record of Leadership Team at Santander | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Opportunities in the E-Commerce Space for Santander - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Santander 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 |
Position among Retailers and Wholesalers – Santander retail strategy | Yes, Santander has strong relationship with retailers and wholesalers | Yes, Santander has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Santander 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 Santander | Santander is leveraging the customer loyalty to good effect | Provide Santander medium term competitive advantage |
Supply Chain Network Flexibility of Santander | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Santander organizational structure and capabilities | Keeps the business running |
Ability to Attract Talent in Various Local & Global Markets | Yes, Santander 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 Santander | To a large extent yes | Providing Strong Competitive Advantage |
Global and Local Presence of Santander | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Santander but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Brand awareness of Santander products and services | Yes, the brand awareness of Santander products are high | Yes, Santander has one of the leading brand in the industry | No | Santander has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Opportunities in the Adjacent Industries that Santander can exploit & New Resources Required to Enter those Industries | Can be valuable as they will create new revenue streams | No | Can be imitated by competitors | All the capabilities of the organization are not fully utilized yet | Has potential |
Pricing Strategies of Santander | Yes, Santander has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Santander with a Temporary Competitive Advantage |
Track Record of Project Execution | Yes, especially in an industry where there are frequent cost overun | Yes, especially in the segment that Santander operates in | No, none of the competitors so far has able to imitate this expertise | Yes, Santander is successful at it | Providing Strong Competitive Advantage |
Financial Resources of Santander | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Santander has reasonably sound financial position | Santander has relatively sustainable Competitive Advantage |
Product Portfolio and Synergy among Various Product Lines of Santander | 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 |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Santander 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
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