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Shinhan Financial Group 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 Shinhan Financial Group to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Shinhan Financial Group? Defining Valuable in VRIO
A resource or capability is considered valuable for Shinhan Financial Group , if it allows the
Shinhan Financial Group to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Shinhan Financial Group to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Shinhan Financial Group.
What are Rare Resources for Shinhan Financial Group? Defining Rare in VRIO
In an industry that Shinhan Financial Group operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Shinhan Financial Group require rare resources to compete in the industry. If Shinhan Financial Group don’t have rare resources that are required to succeed in the industry then Shinhan Financial Group won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Shinhan Financial Group competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Shinhan Financial Group? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Shinhan Financial Group 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. Shinhan Financial Group 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 Shinhan Financial Group
What is a Organization for Shinhan Financial Group? Defining Organization in VRIO
Even if the Shinhan Financial Group 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 Shinhan Financial Group 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 |
---|---|---|---|---|---|
Customer Community of Shinhan Financial Group | Yes, as customers are co-creating products | Yes, the Shinhan Financial Group has able to build a special relationship with its customers | It is very difficult for Shinhan Financial Group competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Shinhan Financial Group customers community ecosystem | Providing Strong Competitive Advantage |
Marketing Expertise within Shinhan Financial Group | 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 Shinhan Financial Group are often matched by competitors | Yes, Shinhan Financial Group is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Ability to Attract Talent in Various Local & Global Markets | Yes, Shinhan Financial Group 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 Shinhan Financial Group | To a large extent yes | Providing Strong Competitive Advantage |
Position among Retailers and Wholesalers – Shinhan Financial Group retail strategy | Yes, Shinhan Financial Group has strong relationship with retailers and wholesalers | Yes, Shinhan Financial Group has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Shinhan Financial Group 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 Shinhan Financial Group | Shinhan Financial Group is leveraging the customer loyalty to good effect | Provide Shinhan Financial Group medium term competitive advantage |
Successful Implementation of Digital Strategy at Shinhan Financial Group | 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 |
Financial Resources of Shinhan Financial Group | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Shinhan Financial Group has reasonably sound financial position | Shinhan Financial Group has relatively sustainable Competitive Advantage |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with Shinhan Financial Group dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Opportunities in the Adjacent Industries that Shinhan Financial Group 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 |
Supply Chain Network Flexibility of Shinhan Financial Group | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Shinhan Financial Group organizational structure and capabilities | Keeps the business running |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Shinhan Financial Group in delivering lower costs | No | Can be imitated by competitors of Shinhan Financial Group but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Global and Local Presence of Shinhan Financial Group | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Shinhan Financial Group but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Opportunities in the E-Commerce Space for Shinhan Financial Group - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Shinhan Financial Group 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 |
Shinhan Financial Group 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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