Commonwealth 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 Commonwealth Bank to do better resource allocation and build a defensible value and supply chain.

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What is a Valuable Resource for Commonwealth Bank? Defining Valuable in VRIO

A resource or capability is considered valuable for Commonwealth Bank , if it allows the Commonwealth 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 Commonwealth Bank to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Commonwealth Bank.

What are Rare Resources for Commonwealth Bank? Defining Rare in VRIO

In an industry that Commonwealth Bank operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Commonwealth Bank require rare resources to compete in the industry. If Commonwealth Bank don’t have rare resources that are required to succeed in the industry then Commonwealth Bank won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Commonwealth 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 Commonwealth Bank? Defining Inimitable in VRIO

A valuable and rare resource can provide a competitive advantage to Commonwealth 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. Commonwealth 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 Commonwealth Bank

What is a Organization for Commonwealth Bank? Defining Organization in VRIO

Even if the Commonwealth 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 Commonwealth 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
Sales Force and Channel Management of Commonwealth Bank	Yes	No	Can be imitated by competitors	Still there is lot of potential to utilize the excellent sales force	Can provide Commonwealth Bank sustainable competitive advantage. Potential is certainly there.
Opportunities for Brand Extensions for Commonwealth 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
Alignment of Activities with Commonwealth Bank 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
Access to Critical Raw Material for Successful Execution	Yes	Yes, as other competitors have to come to terms with Commonwealth Bank dominant market position	Can be imitated by competitors	Yes	Providing Sustainable Competitive Advantage
Customer Community of Commonwealth Bank	Yes, as customers are co-creating products	Yes, the Commonwealth Bank has able to build a special relationship with its customers	It is very difficult for Commonwealth Bank competitors to imitate the culture and community dedication	Going by the data, there is still a lot of upside in building on Commonwealth Bank customers community ecosystem	Providing Strong Competitive Advantage
Marketing Expertise within Commonwealth Bank	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 Commonwealth Bank are often matched by competitors	Yes, Commonwealth Bank is leveraging both its inhouse marketing department and external expertise	Temporary Competitive Advantage
Intellectual Property Rights, Copyrights, and Trademarks	Yes, they are extremely valuable for Commonwealth Bank to thwart competition	Yes, IPR and other rights are rare and competition of Commonwealth Bank 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
Track Record of Project Execution	Yes, especially in an industry where there are frequent cost overun	Yes, especially in the segment that Commonwealth Bank operates in	No, none of the competitors so far has able to imitate this expertise	Yes, Commonwealth Bank is successful at it	Providing Strong Competitive Advantage
Global and Local Presence of Commonwealth Bank	Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles	Yes	Can be imitated by competitors of Commonwealth Bank 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 Commonwealth 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
Track Record of Leadership Team at Commonwealth Bank	Yes	Yes	Can't be imitated by competitors	Yes	Providing Strong Competitive Advantage
Position among Retailers and Wholesalers – Commonwealth Bank retail strategy	Yes, Commonwealth Bank has strong relationship with retailers and wholesalers	Yes, Commonwealth Bank has dedicated channel partners	Difficult to imitate though not impossible	Yes, over the years company has used it successfully	Sustainable Competitive Advantage
Supply Chain Network Flexibility of Commonwealth Bank	Yes	Yes	Near competitors also have flexible supply chain and share some of the suppliers	Fully utilized by Commonwealth Bank organizational structure and capabilities	Keeps the business running
Ability to Attract Talent in Various Local & Global Markets	Yes, Commonwealth 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 Commonwealth Bank	To a large extent yes	Providing Strong Competitive Advantage

Commonwealth 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