Essay Example: Sustainable Competitive Edge for Wells Fargo

Published: 2022-03-31
Essay Example: Sustainable Competitive Edge for Wells Fargo
Type of paper:  Essay
Categories:  Company Business strategy
Pages: 3
Wordcount: 619 words
6 min read

Wells Fargo is a well-developed financial institution. The company has maintained a strategic market position by offering competitive services. However, due to global market dynamics and increased competition, the firm must find the most efficient options for becoming competitive (Krishnaswamy, 2017). Securing a competitive edge is a crucial determinant of the achievement of a firm's long-term and short-term goals. A company should not only become competitive but also ensure it remains competitive throughout its business years. One of the most fruitful strategies for providing a competitive edge is using a model of litmus test, which determines whether an IT asset can give the desired competitive advantage. A competitive it asset should be valuable, rare, inimitable and non-substitutable. An IT asset that meets all the four criteria is capable of sustainable competitive advantage.

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A valuable IT asset always the firm to successful exploit opportunities and defend its position against threats. An IT asset is considered useful if it can add value to the organization (Mahdi, Nassar & Almsafir, 2018). IT assets are also valuable if they assist firms to improve the perceived customer's value, which can be achieved by raising the level of differentiation and lowering the price of goods and services offered. Wells Fargo must use resources that meet this condition; otherwise, the asset will result in a competitive loss. Regularly changing the internal and external conditions of the firm can render some IT assets less valuable. Thus, it essential to continually review the value of IT assets.

Rare means that the IT asset is scarce and hard to find in the market compared to the demand for its use and what it creates. On the other hand, IT assets that are easily available to archrivals will not provide a competitive advantage to Wells Fargo (Machado 2017). A rare and valuable IT asset will give Well Fargo a temporary competitive edge.

The key to Wells Fargo success in securing a competitive edge is to develop IT assets that are hard to imitate. For example, it would be difficult for arch-rivals to mimic proprietary software that has been tailored and costumed by Wells Fargo by an in-house firm. Any attempt to reverse engineer and recreate the app will be achieved at a very high cost. Reverse engineering software is hard, since competitors can only see its behavior and functionalities, but cannot copy the underlying source codes. However, while a custom-made IT asset ensures rivals cannot imitate, it is also costly and riskiest to develop and implement. The firm should ponder whether the IT asset is difficult to imitate and whether there will be a significant loss regarding the cost to Wells Fargo when a rival firm attempts to obtain or duplicate the asset?

An ideal and competitive IT asset cannot be substituted by other resources form rivals. Although there may exist substitutes ion the market, they will remain non-functional as long as the IT asset maintains its non-substitutability quality. According to Kilika and Kyengo (2017), non-substitutable assets contribute positively to success than substitutable assets. Non-substitutability is one of the core marks of strategic assets. Wells Fargo asset that is valuable, rare, inimitable and non-substitutable can improve the firm's efficiency and effectiveness, as well as contribute to a strategic market positioning. Non-substitutability means that archrivals will not find a substitute for the asset provided by Wells Fargo.


Krishnaswamy, S. (2017). Sources of Sustainable Competitive Advantage.

Kyengo M. Justus and Kilika James (2017) Strategic Assets, Competitive Capabilities and Firm Performance: Review of the Literature.

Machado, M. M., Henkels, D. O., Dalfovo, M. S., & Goncalves, A. (2017). Co-Op resources that lead to a sustainable competitive advantage.

Mahdi, O. R., Nassar, I. A., & Almsafir, M. K. (2018). Knowledge management processes and sustainable competitive advantage: Journal of Business Research.

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