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Avnet 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 Avnet to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Avnet? Defining Valuable in VRIO
A resource or capability is considered valuable for Avnet , if it allows the
Avnet to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Avnet to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Avnet.
What are Rare Resources for Avnet? Defining Rare in VRIO
In an industry that Avnet operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Avnet require rare resources to compete in the industry. If Avnet don’t have rare resources that are required to succeed in the industry then Avnet won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Avnet competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Avnet? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Avnet 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. Avnet 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 Avnet
What is a Organization for Avnet? Defining Organization in VRIO
Even if the Avnet 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 Avnet 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 |
---|---|---|---|---|---|
Track Record of Leadership Team at Avnet | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Alignment of Activities with Avnet Corporate Strategy | Yes | No | Each of the firm has its own strategy | Yes, company has organizational skills to extract the maximum out of it. | Still lots of potential to build on it |
Financial Resources of Avnet | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Avnet has reasonably sound financial position | Avnet has relatively sustainable Competitive Advantage |
Brand awareness of Avnet products and services | Yes, the brand awareness of Avnet products are high | Yes, Avnet has one of the leading brand in the industry | No | Avnet has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Avnet in delivering lower costs | No | Can be imitated by competitors of Avnet but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Successful Implementation of Digital Strategy at Avnet | 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 |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with Avnet dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Pricing Strategies of Avnet | Yes, Avnet has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Avnet with a Temporary Competitive Advantage |
Opportunities in the E-Commerce Space for Avnet - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Avnet 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 |
Opportunities in the Adjacent Industries that Avnet 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 |
Global and Local Presence of Avnet | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Avnet but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Avnet 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 Avnet | Avnet is leveraging the customer loyalty to good effect | Provide Avnet medium term competitive advantage |
Marketing Expertise within Avnet | 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 Avnet are often matched by competitors | Yes, Avnet is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Ability to Attract Talent in Various Local & Global Markets | Yes, Avnet 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 Avnet | To a large extent yes | Providing Strong Competitive Advantage |
Avnet 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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