First Data 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 First Data to do better resource allocation and build a defensible value and supply chain.

Order a First Data VRIO / VRIN Analysis now

What is a Valuable Resource for First Data? Defining Valuable in VRIO

A resource or capability is considered valuable for First Data , if it allows the First Data to exploit opportunities or negate threats emerging out of both the micro business environment and the macro environment. If a resource does not allow First Data to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for First Data.

What are Rare Resources for First Data? Defining Rare in VRIO

In an industry that First Data operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. First Data require rare resources to compete in the industry. If First Data don’t have rare resources that are required to succeed in the industry then First Data won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide First Data competitive advantage against players that don’t have those rare resources. HBR Case Study Solution

What is a Inimitable (Difficult to Immitate) Resource for First Data? Defining Inimitable in VRIO

A valuable and rare resource can provide a competitive advantage to First Data 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. First Data 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 First Data

What is a Organization for First Data? Defining Organization in VRIO

Even if the First Data 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 First Data 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
Track Record of Leadership Team at First Data	Yes	Yes	Can't be imitated by competitors	Yes	Providing Strong Competitive Advantage
Opportunities for Brand Extensions for First Data 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
First Data 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 First Data	First Data is leveraging the customer loyalty to good effect	Provide First Data medium term competitive advantage
Vision of the Leadership for Next Set of Challenges	Yes	No	Can't be imitated by competitors of First Data	Not based on information provided in the case	Can Lead to 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 First Data operates in	No, none of the competitors so far has able to imitate this expertise	Yes, First Data is successful at it	Providing Strong Competitive Advantage
Supply Chain Network Flexibility of First Data	Yes	Yes	Near competitors also have flexible supply chain and share some of the suppliers	Fully utilized by First Data organizational structure and capabilities	Keeps the business running
Global and Local Presence of First Data	Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles	Yes	Can be imitated by competitors of First Data but at a relatively high cost	Yes, it is one of the most diversified companies in its industry	Providing Strong Competitive Advantage
Access to Critical Raw Material for Successful Execution	Yes	Yes, as other competitors have to come to terms with First Data dominant market position	Can be imitated by competitors	Yes	Providing Sustainable Competitive Advantage
Distribution and Logistics Costs Competitiveness	Yes, as it helps First Data in delivering lower costs	No	Can be imitated by competitors of First Data but it is difficult	Yes	Medium to Long Term Competitive Advantage
Brand awareness of First Data products and services	Yes, the brand awareness of First Data products are high	Yes, First Data has one of the leading brand in the industry	No	First Data has utilized its leading brand position in various segments	Sustainable Competitive Advantage
Product Portfolio and Synergy among Various Product Lines of First Data	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 E-Commerce Space for First Data - using Present IT Capabilities	Yes, the e-commerce space is rapidly growing and First Data 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
Customer Community of First Data	Yes, as customers are co-creating products	Yes, the First Data has able to build a special relationship with its customers	It is very difficult for First Data competitors to imitate the culture and community dedication	Going by the data, there is still a lot of upside in building on First Data customers community ecosystem	Providing Strong Competitive Advantage
Pricing Strategies of First Data	Yes, First Data has sound pricing strategies	No	Pricing strategies are regularly imitated in the industry	Yes, firm has a pricing analytics engine	It can only provide First Data with a Temporary Competitive Advantage

First Data 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