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Itau 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 Itau Bank to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Itau Bank? Defining Valuable in VRIO
A resource or capability is considered valuable for Itau Bank , if it allows the
Itau 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 Itau Bank to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Itau Bank.
What are Rare Resources for Itau Bank? Defining Rare in VRIO
In an industry that Itau Bank operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Itau Bank require rare resources to compete in the industry. If Itau Bank don’t have rare resources that are required to succeed in the industry then Itau Bank won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Itau 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 Itau Bank? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Itau 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. Itau 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 Itau Bank
What is a Organization for Itau Bank? Defining Organization in VRIO
Even if the Itau 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 Itau 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 |
---|---|---|---|---|---|
Position among Retailers and Wholesalers – Itau Bank retail strategy | Yes, Itau Bank has strong relationship with retailers and wholesalers | Yes, Itau Bank 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 Itau Bank | 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 |
Access to Cheap Capital for Itau Bank | Yes, as a leading player in the industry and current macro economic conditions, Itau Bank has access to cheap capital | No | Can be imitated by the competitors of Itau Bank | Not been totally exploited | Not significant in creating competitive advantage |
Product Portfolio and Synergy among Various Product Lines of Itau Bank | 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 |
Ability to Attract Talent in Various Local & Global Markets | Yes, Itau 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 Itau Bank | To a large extent yes | Providing Strong Competitive Advantage |
Itau Bank 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 Itau Bank | Itau Bank is leveraging the customer loyalty to good effect | Provide Itau Bank medium term competitive advantage |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with Itau Bank dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Opportunities in the Adjacent Industries that Itau 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 |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of Itau Bank | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Brand awareness of Itau Bank products and services | Yes, the brand awareness of Itau Bank products are high | Yes, Itau Bank has one of the leading brand in the industry | No | Itau Bank has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Alignment of Activities with Itau 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 |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Itau Bank in delivering lower costs | No | Can be imitated by competitors of Itau Bank but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Customer Community of Itau Bank | Yes, as customers are co-creating products | Yes, the Itau Bank has able to build a special relationship with its customers | It is very difficult for Itau Bank competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Itau Bank customers community ecosystem | Providing Strong Competitive Advantage |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for Itau Bank to thwart competition | Yes, IPR and other rights are rare and competition of Itau 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 |
Itau 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
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