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TD Ameritrade Holding 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 TD Ameritrade Holding to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for TD Ameritrade Holding? Defining Valuable in VRIO
A resource or capability is considered valuable for TD Ameritrade Holding , if it allows the
TD Ameritrade Holding to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow TD Ameritrade Holding to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for TD Ameritrade Holding.
What are Rare Resources for TD Ameritrade Holding? Defining Rare in VRIO
In an industry that TD Ameritrade Holding operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. TD Ameritrade Holding require rare resources to compete in the industry. If TD Ameritrade Holding don’t have rare resources that are required to succeed in the industry then TD Ameritrade Holding won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide TD Ameritrade Holding competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for TD Ameritrade Holding? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to TD Ameritrade Holding 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. TD Ameritrade Holding 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 TD Ameritrade Holding
What is a Organization for TD Ameritrade Holding? Defining Organization in VRIO
Even if the TD Ameritrade Holding 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 TD Ameritrade Holding 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 |
---|---|---|---|---|---|
Product Portfolio and Synergy among Various Product Lines of TD Ameritrade Holding | 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 |
Marketing Expertise within TD Ameritrade Holding | 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 TD Ameritrade Holding are often matched by competitors | Yes, TD Ameritrade Holding is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Access to Cheap Capital for TD Ameritrade Holding | Yes, as a leading player in the industry and current macro economic conditions, TD Ameritrade Holding has access to cheap capital | No | Can be imitated by the competitors of TD Ameritrade Holding | Not been totally exploited | Not significant in creating competitive advantage |
Supply Chain Network Flexibility of TD Ameritrade Holding | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by TD Ameritrade Holding organizational structure and capabilities | Keeps the business running |
Track Record of Leadership Team at TD Ameritrade Holding | 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 TD Ameritrade Holding to thwart competition | Yes, IPR and other rights are rare and competition of TD Ameritrade Holding 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 |
Sales Force and Channel Management of TD Ameritrade Holding | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide TD Ameritrade Holding sustainable competitive advantage. Potential is certainly there. |
Brand awareness of TD Ameritrade Holding products and services | Yes, the brand awareness of TD Ameritrade Holding products are high | Yes, TD Ameritrade Holding has one of the leading brand in the industry | No | TD Ameritrade Holding has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Position among Retailers and Wholesalers – TD Ameritrade Holding retail strategy | Yes, TD Ameritrade Holding has strong relationship with retailers and wholesalers | Yes, TD Ameritrade Holding has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Global and Local Presence of TD Ameritrade Holding | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of TD Ameritrade Holding but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | 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 TD Ameritrade Holding operates in | No, none of the competitors so far has able to imitate this expertise | Yes, TD Ameritrade Holding is successful at it | Providing Strong Competitive Advantage |
Customer Community of TD Ameritrade Holding | Yes, as customers are co-creating products | Yes, the TD Ameritrade Holding has able to build a special relationship with its customers | It is very difficult for TD Ameritrade Holding competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on TD Ameritrade Holding customers community ecosystem | Providing Strong Competitive Advantage |
Opportunities in the Adjacent Industries that TD Ameritrade Holding 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 |
Brand Positioning of TD Ameritrade Holding 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 |
TD Ameritrade Holding 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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