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Western Union 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 Western Union to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Western Union? Defining Valuable in VRIO
A resource or capability is considered valuable for Western Union , if it allows the
Western Union to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Western Union to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Western Union.
What are Rare Resources for Western Union? Defining Rare in VRIO
In an industry that Western Union operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Western Union require rare resources to compete in the industry. If Western Union don’t have rare resources that are required to succeed in the industry then Western Union won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Western Union competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Western Union? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Western Union 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. Western Union 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 Western Union
What is a Organization for Western Union? Defining Organization in VRIO
Even if the Western Union 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 Western Union 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 Western Union | Yes | Yes | Can't be imitated by competitors | Yes | Providing 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 Western Union operates in | No, none of the competitors so far has able to imitate this expertise | Yes, Western Union is successful at it | Providing Strong Competitive Advantage |
Product Portfolio and Synergy among Various Product Lines of Western Union | 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 for Brand Extensions for Western Union 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 |
Opportunities in the E-Commerce Space for Western Union - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Western Union 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 |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for Western Union to thwart competition | Yes, IPR and other rights are rare and competition of Western Union 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 |
Brand Positioning of Western Union 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 |
Global and Local Presence of Western Union | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Western Union but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Western Union 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 Western Union | Western Union is leveraging the customer loyalty to good effect | Provide Western Union medium term competitive advantage |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of Western Union | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with Western Union dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Marketing Expertise within Western Union | 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 Western Union are often matched by competitors | Yes, Western Union is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Customer Community of Western Union | Yes, as customers are co-creating products | Yes, the Western Union has able to build a special relationship with its customers | It is very difficult for Western Union competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Western Union customers community ecosystem | Providing Strong Competitive Advantage |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Western Union 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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