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DuPont 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 DuPont to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for DuPont? Defining Valuable in VRIO
A resource or capability is considered valuable for DuPont , if it allows the
DuPont to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow DuPont to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for DuPont.
What are Rare Resources for DuPont? Defining Rare in VRIO
In an industry that DuPont operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. DuPont require rare resources to compete in the industry. If DuPont don’t have rare resources that are required to succeed in the industry then DuPont won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide DuPont competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for DuPont? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to DuPont 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. DuPont 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 DuPont
What is a Organization for DuPont? Defining Organization in VRIO
Even if the DuPont 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 DuPont 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 |
---|---|---|---|---|---|
Marketing Expertise within DuPont | 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 DuPont are often matched by competitors | Yes, DuPont is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Distribution and Logistics Costs Competitiveness | Yes, as it helps DuPont in delivering lower costs | No | Can be imitated by competitors of DuPont but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Opportunities in the E-Commerce Space for DuPont - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and DuPont 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 |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Global and Local Presence of DuPont | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of DuPont but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Financial Resources of DuPont | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | DuPont has reasonably sound financial position | DuPont has relatively sustainable Competitive Advantage |
Track Record of Leadership Team at DuPont | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of DuPont | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Opportunities for Brand Extensions for DuPont products | Yes, new niches are emerging in the market | No, as most of the competitors are also targeting those niches | Yes can be imitated by the competitors | Brand extensions will require higher marketing budget | Temporary Competitive Advantage |
Access to Cheap Capital for DuPont | Yes, as a leading player in the industry and current macro economic conditions, DuPont has access to cheap capital | No | Can be imitated by the competitors of DuPont | Not been totally exploited | Not significant in creating competitive advantage |
Ability to Attract Talent in Various Local & Global Markets | Yes, DuPont strategy is built on successful innovation and localization of products | Yes, as talent is critical to firm's growth | Difficult to imitate for the current competitors of DuPont | To a large extent yes | Providing Strong Competitive Advantage |
Sales Force and Channel Management of DuPont | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide DuPont sustainable competitive advantage. Potential is certainly there. |
Position among Retailers and Wholesalers – DuPont retail strategy | Yes, DuPont has strong relationship with retailers and wholesalers | Yes, DuPont has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Successful Implementation of Digital Strategy at DuPont | 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 |
DuPont 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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