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Nationstar Mortgage Holdings 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 Nationstar Mortgage Holdings to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Nationstar Mortgage Holdings? Defining Valuable in VRIO
A resource or capability is considered valuable for Nationstar Mortgage Holdings , if it allows the
Nationstar Mortgage Holdings to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Nationstar Mortgage Holdings to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Nationstar Mortgage Holdings.
What are Rare Resources for Nationstar Mortgage Holdings? Defining Rare in VRIO
In an industry that Nationstar Mortgage Holdings operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Nationstar Mortgage Holdings require rare resources to compete in the industry. If Nationstar Mortgage Holdings don’t have rare resources that are required to succeed in the industry then Nationstar Mortgage Holdings won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Nationstar Mortgage Holdings competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Nationstar Mortgage Holdings? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Nationstar Mortgage Holdings 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. Nationstar Mortgage Holdings 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 Nationstar Mortgage Holdings
What is a Organization for Nationstar Mortgage Holdings? Defining Organization in VRIO
Even if the Nationstar Mortgage Holdings 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 Nationstar Mortgage Holdings 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 |
---|---|---|---|---|---|
Sales Force and Channel Management of Nationstar Mortgage Holdings | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide Nationstar Mortgage Holdings sustainable competitive advantage. Potential is certainly there. |
Product Portfolio and Synergy among Various Product Lines of Nationstar Mortgage Holdings | 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 |
Pricing Strategies of Nationstar Mortgage Holdings | Yes, Nationstar Mortgage Holdings has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Nationstar Mortgage Holdings with a Temporary Competitive Advantage |
Opportunities in the E-Commerce Space for Nationstar Mortgage Holdings - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Nationstar Mortgage Holdings 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 |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of Nationstar Mortgage Holdings | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Opportunities in the Adjacent Industries that Nationstar Mortgage Holdings 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 |
Supply Chain Network Flexibility of Nationstar Mortgage Holdings | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Nationstar Mortgage Holdings organizational structure and capabilities | Keeps the business running |
Position among Retailers and Wholesalers – Nationstar Mortgage Holdings retail strategy | Yes, Nationstar Mortgage Holdings has strong relationship with retailers and wholesalers | Yes, Nationstar Mortgage Holdings has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with Nationstar Mortgage Holdings dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Nationstar Mortgage Holdings 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 Nationstar Mortgage Holdings | Nationstar Mortgage Holdings is leveraging the customer loyalty to good effect | Provide Nationstar Mortgage Holdings medium term competitive advantage |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Nationstar Mortgage Holdings in delivering lower costs | No | Can be imitated by competitors of Nationstar Mortgage Holdings but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Access to Cheap Capital for Nationstar Mortgage Holdings | Yes, as a leading player in the industry and current macro economic conditions, Nationstar Mortgage Holdings has access to cheap capital | No | Can be imitated by the competitors of Nationstar Mortgage Holdings | Not been totally exploited | Not significant in creating competitive advantage |
Brand Positioning of Nationstar Mortgage Holdings 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 |
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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