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MasterCard 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 MasterCard to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for MasterCard? Defining Valuable in VRIO
A resource or capability is considered valuable for MasterCard , if it allows the
MasterCard to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow MasterCard to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for MasterCard.
What are Rare Resources for MasterCard? Defining Rare in VRIO
In an industry that MasterCard operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. MasterCard require rare resources to compete in the industry. If MasterCard don’t have rare resources that are required to succeed in the industry then MasterCard won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide MasterCard competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for MasterCard? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to MasterCard 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. MasterCard 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 MasterCard
What is a Organization for MasterCard? Defining Organization in VRIO
Even if the MasterCard 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 MasterCard 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 |
---|---|---|---|---|---|
Successful Implementation of Digital Strategy at MasterCard | 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 Project Execution | Yes, especially in an industry where there are frequent cost overun | Yes, especially in the segment that MasterCard operates in | No, none of the competitors so far has able to imitate this expertise | Yes, MasterCard is successful at it | Providing Strong Competitive Advantage |
Access to Cheap Capital for MasterCard | Yes, as a leading player in the industry and current macro economic conditions, MasterCard has access to cheap capital | No | Can be imitated by the competitors of MasterCard | Not been totally exploited | Not significant in creating competitive advantage |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of MasterCard | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Pricing Strategies of MasterCard | Yes, MasterCard has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide MasterCard with a Temporary Competitive Advantage |
MasterCard 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 MasterCard | MasterCard is leveraging the customer loyalty to good effect | Provide MasterCard medium term competitive advantage |
Supply Chain Network Flexibility of MasterCard | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by MasterCard organizational structure and capabilities | Keeps the business running |
Brand Positioning of MasterCard 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 |
Position among Retailers and Wholesalers – MasterCard retail strategy | Yes, MasterCard has strong relationship with retailers and wholesalers | Yes, MasterCard has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Distribution and Logistics Costs Competitiveness | Yes, as it helps MasterCard in delivering lower costs | No | Can be imitated by competitors of MasterCard but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Financial Resources of MasterCard | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | MasterCard has reasonably sound financial position | MasterCard has relatively sustainable Competitive Advantage |
Track Record of Leadership Team at MasterCard | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for MasterCard to thwart competition | Yes, IPR and other rights are rare and competition of MasterCard 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 |
Ability to Attract Talent in Various Local & Global Markets | Yes, MasterCard 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 MasterCard | To a large extent yes | Providing Strong Competitive Advantage |
MasterCard 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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