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PNC 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 PNC to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for PNC? Defining Valuable in VRIO
A resource or capability is considered valuable for PNC , if it allows the
PNC to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow PNC to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for PNC.
What are Rare Resources for PNC? Defining Rare in VRIO
In an industry that PNC operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. PNC require rare resources to compete in the industry. If PNC don’t have rare resources that are required to succeed in the industry then PNC won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide PNC competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for PNC? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to PNC 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. PNC 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 PNC
What is a Organization for PNC? Defining Organization in VRIO
Even if the PNC 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 PNC 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 PNC | Yes, as customers are co-creating products | Yes, the PNC has able to build a special relationship with its customers | It is very difficult for PNC competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on PNC customers community ecosystem | Providing Strong Competitive Advantage |
Brand awareness of PNC products and services | Yes, the brand awareness of PNC products are high | Yes, PNC has one of the leading brand in the industry | No | PNC has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Alignment of Activities with PNC 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 Cheap Capital for PNC | Yes, as a leading player in the industry and current macro economic conditions, PNC has access to cheap capital | No | Can be imitated by the competitors of PNC | Not been totally exploited | Not significant in creating competitive advantage |
Supply Chain Network Flexibility of PNC | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by PNC organizational structure and capabilities | Keeps the business running |
Successful Implementation of Digital Strategy at PNC | 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 |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for PNC to thwart competition | Yes, IPR and other rights are rare and competition of PNC 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 |
Sales Force and Channel Management of PNC | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide PNC sustainable competitive advantage. Potential is certainly there. |
Opportunities for Brand Extensions for PNC 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 |
Global and Local Presence of PNC | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of PNC but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Position among Retailers and Wholesalers – PNC retail strategy | Yes, PNC has strong relationship with retailers and wholesalers | Yes, PNC has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
PNC 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 PNC | PNC is leveraging the customer loyalty to good effect | Provide PNC medium term competitive advantage |
Distribution and Logistics Costs Competitiveness | Yes, as it helps PNC in delivering lower costs | No | Can be imitated by competitors of PNC but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Financial Resources of PNC | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | PNC has reasonably sound financial position | PNC has relatively sustainable Competitive Advantage |
PNC 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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