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Nordea 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 Nordea to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Nordea? Defining Valuable in VRIO
A resource or capability is considered valuable for Nordea , if it allows the
Nordea to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Nordea to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Nordea.
What are Rare Resources for Nordea? Defining Rare in VRIO
In an industry that Nordea operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Nordea require rare resources to compete in the industry. If Nordea don’t have rare resources that are required to succeed in the industry then Nordea won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Nordea competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Nordea? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Nordea 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. Nordea 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 Nordea
What is a Organization for Nordea? Defining Organization in VRIO
Even if the Nordea 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 Nordea 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 |
---|---|---|---|---|---|
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for Nordea to thwart competition | Yes, IPR and other rights are rare and competition of Nordea 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 |
Product Portfolio and Synergy among Various Product Lines of Nordea | 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 |
Opportunities in the Adjacent Industries that Nordea 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 Nordea | Yes, Nordea has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Nordea with a Temporary Competitive Advantage |
Alignment of Activities with Nordea 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 |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Nordea in delivering lower costs | No | Can be imitated by competitors of Nordea but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Ability to Attract Talent in Various Local & Global Markets | Yes, Nordea 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 Nordea | To a large extent yes | Providing Strong Competitive Advantage |
Customer Community of Nordea | Yes, as customers are co-creating products | Yes, the Nordea has able to build a special relationship with its customers | It is very difficult for Nordea competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Nordea customers community ecosystem | Providing Strong Competitive Advantage |
Opportunities in the E-Commerce Space for Nordea - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Nordea 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 |
Brand awareness of Nordea products and services | Yes, the brand awareness of Nordea products are high | Yes, Nordea has one of the leading brand in the industry | No | Nordea has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Track Record of Project Execution | Yes, especially in an industry where there are frequent cost overun | Yes, especially in the segment that Nordea operates in | No, none of the competitors so far has able to imitate this expertise | Yes, Nordea is successful at it | Providing Strong Competitive Advantage |
Position among Retailers and Wholesalers – Nordea retail strategy | Yes, Nordea has strong relationship with retailers and wholesalers | Yes, Nordea has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Successful Implementation of Digital Strategy at Nordea | 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 |
Track Record of Leadership Team at Nordea | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Nordea 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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