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China Minsheng Bank 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 China Minsheng Bank to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for China Minsheng Bank? Defining Valuable in VRIO
A resource or capability is considered valuable for China Minsheng Bank , if it allows the
China Minsheng Bank to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow China Minsheng Bank to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for China Minsheng Bank.
What are Rare Resources for China Minsheng Bank? Defining Rare in VRIO
In an industry that China Minsheng Bank operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. China Minsheng Bank require rare resources to compete in the industry. If China Minsheng Bank don’t have rare resources that are required to succeed in the industry then China Minsheng Bank won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide China Minsheng Bank competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for China Minsheng Bank? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to China Minsheng Bank 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. China Minsheng Bank 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 China Minsheng Bank
What is a Organization for China Minsheng Bank? Defining Organization in VRIO
Even if the China Minsheng Bank 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 China Minsheng Bank 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 |
---|---|---|---|---|---|
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of China Minsheng Bank | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Financial Resources of China Minsheng Bank | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | China Minsheng Bank has reasonably sound financial position | China Minsheng Bank has relatively sustainable Competitive Advantage |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Opportunities in the Adjacent Industries that China Minsheng Bank 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 |
Global and Local Presence of China Minsheng Bank | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of China Minsheng Bank but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Distribution and Logistics Costs Competitiveness | Yes, as it helps China Minsheng Bank in delivering lower costs | No | Can be imitated by competitors of China Minsheng Bank but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Ability to Attract Talent in Various Local & Global Markets | Yes, China Minsheng Bank 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 China Minsheng Bank | To a large extent yes | Providing Strong Competitive Advantage |
Successful Implementation of Digital Strategy at China Minsheng Bank | Yes, without a comprehensive digital strategy it is extremely difficult to compete | No, as most of the firms are investing into digitalizing operations | Can be imitated by competitors | One of the leading player in the industry | Digital strategy has become critical in the industry but it can't provide sustainable competitive advantage to |
Opportunities for Brand Extensions for China Minsheng Bank 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 |
Track Record of Leadership Team at China Minsheng Bank | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Customer Community of China Minsheng Bank | Yes, as customers are co-creating products | Yes, the China Minsheng Bank has able to build a special relationship with its customers | It is very difficult for China Minsheng Bank competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on China Minsheng Bank customers community ecosystem | Providing Strong Competitive Advantage |
Sales Force and Channel Management of China Minsheng Bank | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide China Minsheng Bank sustainable competitive advantage. Potential is certainly there. |
Opportunities in the E-Commerce Space for China Minsheng Bank - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and China Minsheng Bank 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 |
Access to Cheap Capital for China Minsheng Bank | Yes, as a leading player in the industry and current macro economic conditions, China Minsheng Bank has access to cheap capital | No | Can be imitated by the competitors of China Minsheng Bank | Not been totally exploited | Not significant in creating competitive advantage |
China Minsheng Bank 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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