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Navient 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 Navient to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Navient? Defining Valuable in VRIO
A resource or capability is considered valuable for Navient , if it allows the
Navient to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Navient to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Navient.
What are Rare Resources for Navient? Defining Rare in VRIO
In an industry that Navient operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Navient require rare resources to compete in the industry. If Navient don’t have rare resources that are required to succeed in the industry then Navient won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Navient competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Navient? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Navient 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. Navient 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 Navient
What is a Organization for Navient? Defining Organization in VRIO
Even if the Navient 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 Navient 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 |
---|---|---|---|---|---|
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for Navient to thwart competition | Yes, IPR and other rights are rare and competition of Navient 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 |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of Navient | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Track Record of Leadership Team at Navient | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Supply Chain Network Flexibility of Navient | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Navient organizational structure and capabilities | Keeps the business running |
Alignment of Activities with Navient 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 |
Successful Implementation of Digital Strategy at Navient | 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 Navient | Yes, as a leading player in the industry and current macro economic conditions, Navient has access to cheap capital | No | Can be imitated by the competitors of Navient | Not been totally exploited | Not significant in creating competitive advantage |
Financial Resources of Navient | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Navient has reasonably sound financial position | Navient has relatively sustainable Competitive Advantage |
Marketing Expertise within Navient | 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 Navient are often matched by competitors | Yes, Navient is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Product Portfolio and Synergy among Various Product Lines of Navient | 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 |
Navient 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 Navient | Navient is leveraging the customer loyalty to good effect | Provide Navient medium term competitive advantage |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Navient in delivering lower costs | No | Can be imitated by competitors of Navient but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Customer Community of Navient | Yes, as customers are co-creating products | Yes, the Navient has able to build a special relationship with its customers | It is very difficult for Navient competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Navient 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 |
Navient 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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