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BlackRock 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 BlackRock to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for BlackRock? Defining Valuable in VRIO
A resource or capability is considered valuable for BlackRock , if it allows the
BlackRock to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow BlackRock to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for BlackRock.
What are Rare Resources for BlackRock? Defining Rare in VRIO
In an industry that BlackRock operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. BlackRock require rare resources to compete in the industry. If BlackRock don’t have rare resources that are required to succeed in the industry then BlackRock won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide BlackRock competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for BlackRock? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to BlackRock 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. BlackRock 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 BlackRock
What is a Organization for BlackRock? Defining Organization in VRIO
Even if the BlackRock 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 BlackRock 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 |
---|---|---|---|---|---|
Marketing Expertise within BlackRock | 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 BlackRock are often matched by competitors | Yes, BlackRock is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Track Record of Project Execution | Yes, especially in an industry where there are frequent cost overun | Yes, especially in the segment that BlackRock operates in | No, none of the competitors so far has able to imitate this expertise | Yes, BlackRock is successful at it | Providing Strong Competitive Advantage |
BlackRock 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 BlackRock | BlackRock is leveraging the customer loyalty to good effect | Provide BlackRock medium term competitive advantage |
Brand Positioning of BlackRock in Comparison to the Competitors | Yes | No | Can be imitated by competitors but it will require big marketing budget | Yes, the firm has positioned its brands based on consumer behavior | Temporary Competitive Advantage |
Access to Cheap Capital for BlackRock | Yes, as a leading player in the industry and current macro economic conditions, BlackRock has access to cheap capital | No | Can be imitated by the competitors of BlackRock | Not been totally exploited | Not significant in creating competitive advantage |
Track Record of Leadership Team at BlackRock | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Product Portfolio and Synergy among Various Product Lines of BlackRock | 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 BlackRock 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 |
Financial Resources of BlackRock | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | BlackRock has reasonably sound financial position | BlackRock has relatively sustainable Competitive Advantage |
Opportunities in the E-Commerce Space for BlackRock - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and BlackRock 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 |
Successful Implementation of Digital Strategy at BlackRock | 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 |
Pricing Strategies of BlackRock | Yes, BlackRock has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide BlackRock with a Temporary Competitive Advantage |
Distribution and Logistics Costs Competitiveness | Yes, as it helps BlackRock in delivering lower costs | No | Can be imitated by competitors of BlackRock but it is difficult | Yes | Medium to Long Term Competitive Advantage |
BlackRock 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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