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Scotiabank 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 Scotiabank to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Scotiabank? Defining Valuable in VRIO
A resource or capability is considered valuable for Scotiabank , if it allows the
Scotiabank to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Scotiabank to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Scotiabank.
What are Rare Resources for Scotiabank? Defining Rare in VRIO
In an industry that Scotiabank operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Scotiabank require rare resources to compete in the industry. If Scotiabank don’t have rare resources that are required to succeed in the industry then Scotiabank won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Scotiabank competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Scotiabank? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Scotiabank 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. Scotiabank 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 Scotiabank
What is a Organization for Scotiabank? Defining Organization in VRIO
Even if the Scotiabank 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 Scotiabank 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 |
---|---|---|---|---|---|
Ability to Attract Talent in Various Local & Global Markets | Yes, Scotiabank 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 Scotiabank | To a large extent yes | Providing Strong Competitive Advantage |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of Scotiabank | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Scotiabank in delivering lower costs | No | Can be imitated by competitors of Scotiabank but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Supply Chain Network Flexibility of Scotiabank | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Scotiabank organizational structure and capabilities | Keeps the business running |
Access to Cheap Capital for Scotiabank | Yes, as a leading player in the industry and current macro economic conditions, Scotiabank has access to cheap capital | No | Can be imitated by the competitors of Scotiabank | Not been totally exploited | Not significant in creating competitive advantage |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for Scotiabank to thwart competition | Yes, IPR and other rights are rare and competition of Scotiabank 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 Scotiabank | Yes, as customers are co-creating products | Yes, the Scotiabank has able to build a special relationship with its customers | It is very difficult for Scotiabank competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Scotiabank customers community ecosystem | Providing Strong Competitive Advantage |
Financial Resources of Scotiabank | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Scotiabank has reasonably sound financial position | Scotiabank has relatively sustainable Competitive Advantage |
Product Portfolio and Synergy among Various Product Lines of Scotiabank | 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 |
Alignment of Activities with Scotiabank Corporate Strategy | Yes | No | Each of the firm has its own strategy | Yes, company has organizational skills to extract the maximum out of it. | Still lots of potential to build on it |
Global and Local Presence of Scotiabank | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Scotiabank but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Opportunities in the Adjacent Industries that Scotiabank 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 |
Scotiabank 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 Scotiabank | Scotiabank is leveraging the customer loyalty to good effect | Provide Scotiabank medium term competitive advantage |
Opportunities for Brand Extensions for Scotiabank 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 |
Scotiabank 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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