AFI Paper 3: Chase Bank - Internal Analysis, ARC, and VRIO Framework

This assignment, AFI Paper 3, focuses on an internal analysis of Chase Bank, examining its Assets, Resources, and Capabilities (ARC) to determine its sustainable competitive advantage. The student identifies three key resources: financial resources (substantial assets and revenue), organizational culture and employees (emphasizing employee training, diversity, and empowerment), and an extensive network (global presence with numerous branches and ATMs). These resources are then analyzed using the VRIO framework (Valuable, Rare, Inimitable, Organized) to assess their potential for creating a sustainable competitive advantage. The analysis concludes that financial resources and network are the most crucial for maintaining a competitive edge, while the organizational culture also contributes significantly. The paper uses the VRIO framework to assess each resource's potential to create a sustainable competitive advantage. The assignment provides insights into the banking industry, Chase Bank's strategies, and how it leverages its internal strengths to achieve a competitive edge.

Answer to AFI Paper 3
AFI Paper 3: Internal Analysis, ARC (Assets, Resources, Capabilities) and Sustainable
Competitive Advantage
Looking at your firm try to identify the most important, the most salient, ARC items possessed
by your firm. These ARC items should be the source of a firm’s competitive advantage (if the
firm has one).
Resource/ Capability #1
Financial resource of Chase Bank is one of the most important of resources of the bank.
Chase Bank has assets worth $ 2.6 trillion. It is thus evident that the financial capacity of the
company is very high and thus it is easy for the bank to compete with its competitors (Johnson et
al., 2019). In 2019, Chase Bank has earned over and $ 142 billion. Huge amount of financial
resource enables the company to provide its customers high quality service. With good amount
of financial resources, the bank could expand its business anywhere it wishes and invest in risky
ventures (Kursun & Lee, 2018). This provides the bank advantage of investing in diversified
products and such as commercial banking, investment banking and retail banking. The banks
also invests in credit card service. The revenue of the bank has increased over the years depicting
an upward trend. In addition to that, the profit of the bank has increased gradually over the years.
From the part of market capitalization, the Chase bank is among the top four banks in the United
States (Hearit, 2018). The parent organization of the bank is JP Morgan which is an age old
organization with expertise in the field of finance and thus with such huge financial resources the
company has competitive advantages.

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Resources/ Capability #2
Chase bank believes that the culture of the organization and its employees are the most
important. The bank values its employees very highly and per the data of 2016 the number of
employees working in the bank worldwide is 189, 135. In order to promote no racism in the
organization the company retains and provides training to the black employees in the
organization to increase the representation of the black employees at the officer level (Muriuki,
2016). Additionally, company encourages women empowerment by the encouraging
participation in of women in the organization. The main objective of the organization is to
expand the businesses run by women. The growing importance of women employees in the
organization is evident from the proportion of women among the news hires. 49% of new hires
in the organization are women. Data show that 58% of the new hires in the organization are
ethnically and racially diverse. The bank spends $300 million for employees training each year
(Lakatos, Davidson & Sanney, 2017). It can be thus said that the employees of the organization
are highly motivated and skilled as well. The bank provides growth opportunity to the employees
and support them fully. Therefore, highly motivated employees means high productivity of the
organization and thus employee resource is a key behind the success of the bank and the bank
recognizes it.
Resources/ Capability #3
Network of Chase Bank is significantly large and it is among one of the major resources
of the bank. The bank operates in over 100 countries. The bank has over 16000 ATMS and 5100
branches in the US alone (Bähren & Schöpp, 2016). Considering, the above data it can be said
that the number of customers that the bank serve is in millions. Data suggest that the number of
mobile users of Chase Bank is over 25 million. The presence of the bank in so many countries

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increases diversification of the bank and thereby increases the risk of failure of the decreases. On
the other hand, the chances of getting more business is more as the customers do business with
the bank that has high presence because it assures smooth service (Dalcher, 2017). Increase in
number of potential customers every day increases the sustainability of the bank. It is the main
reason due to which the bank can take risk. In addition to that, the bank gets huge number of
international business due to large number of branches and international operations.
Analyze your three most salient resources / core competencies using the VRIO framework
(below).
VRIO Framework
Valuable Rare Inimitable Organized Advantage
Financial
resource
Yes, it is highly
valuable because
for a bank it is
the major
resource since it
deals in money
matters
Yes, it is rare
because the
amount of
financial
resource that
Chase bank
has is
significantly
large in
comparison
to its
competitors
Yes. Financial
resource
cannot be
imitated as it is
created by
good amount
of business
and prolonged
existence in
the market
Yes. The
financial
resources are
the major
resource for
banks. Banks
always keep
financial
resources in
organized
way.
Sustainable
competitive
advantage
Culture Yes. Culture and No. Culture No. Policies Yes. The No

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and
employee
employees are
the valuable part
of an
organization.
The culture
keeps the
environment of
an organization
healthy.
and
employee
friendly
organization
is not rare
but employee
polices used
by Chase
bank could
be rare.
used by an
organization in
order to
provide benefit
to the
employees and
improve
culture of the
organization
can be imitated
by other
organizations.
culture and
employees are
well managed
by Chase
Bank. All te
employees get
equal
opportunity for
growth.
Sustainable
competitive
advantage
Network Yes. Network is
an important
factor because
without string
network Chase
bank cannot
reach out to
more number of
customers
Yes.
Network is
rare as it
takes time to
build.
Network is
based on the
attributes like
trust, quality
service and
accessibility
Yes. Not all
organizations
have and
network
quality like the
Chase Bank. It
has achieved
its network by
operation in
the industry
for so long
Yes. The bank
has numerous
branches all
around the
world and the
company
manages it
well.
Sustainable
competitive
advantage

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time.

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Reference
Bähren, F., & Schöpp, H. (2016). U.S. Patent No. 9,319,239. Washington, DC: U.S. Patent and
Trademark Office.
Dalcher, G. W. (2017). U.S. Patent No. 9,613,212. Washington, DC: U.S. Patent and Trademark
Office.
Hearit, L. B. (2018). JPMorgan Chase, Bank of America, Wells Fargo, and the financial crisis of
2008. International Journal of Business Communication, 55(2), 237-260.
Johnson, S. B., Doran, A., Gladwin, D., Ongaro, G., Haynes, S., Blacklock, C., & BREEN, E.
(2019). U.S. Patent Application No. 16/249,340.
Kursun, E., & Lee, S. (2018). U.S. Patent No. 10,055,726. Washington, DC: U.S. Patent and
Trademark Office.
Lakatos, J., Davidson, B., & Sanney, K. J. (2017). Calling Wells Fargo’s CEO: Drive
Widespread Cultural Change via Implementation of the Dynamic Organizational Model
and Permeation of Servant Leadership throughout the Financial Institution. The Journal
of International Management Studies, 12(1).
Muriuki, G. W. (2016). The Effect of Organizational Rewards on Motivation of Generation Y
Employees: A Case of Chase Bank Ltd (Doctoral dissertation, United States International
University-Africa).