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Allianz 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 Allianz to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Allianz? Defining Valuable in VRIO
A resource or capability is considered valuable for Allianz , if it allows the
Allianz to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Allianz to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Allianz.
What are Rare Resources for Allianz? Defining Rare in VRIO
In an industry that Allianz operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Allianz require rare resources to compete in the industry. If Allianz don’t have rare resources that are required to succeed in the industry then Allianz won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Allianz competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Allianz? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Allianz 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. Allianz 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 Allianz
What is a Organization for Allianz? Defining Organization in VRIO
Even if the Allianz 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 Allianz 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 |
---|---|---|---|---|---|
Successful Implementation of Digital Strategy at Allianz | 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 |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Allianz in delivering lower costs | No | Can be imitated by competitors of Allianz but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Brand Positioning of Allianz 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 |
Opportunities for Brand Extensions for Allianz 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 |
Brand awareness of Allianz products and services | Yes, the brand awareness of Allianz products are high | Yes, Allianz has one of the leading brand in the industry | No | Allianz has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Allianz 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 Allianz | Allianz is leveraging the customer loyalty to good effect | Provide Allianz medium term competitive advantage |
Global and Local Presence of Allianz | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Allianz but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Alignment of Activities with Allianz 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 |
Access to Cheap Capital for Allianz | Yes, as a leading player in the industry and current macro economic conditions, Allianz has access to cheap capital | No | Can be imitated by the competitors of Allianz | Not been totally exploited | Not significant in creating competitive advantage |
Position among Retailers and Wholesalers – Allianz retail strategy | Yes, Allianz has strong relationship with retailers and wholesalers | Yes, Allianz has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Supply Chain Network Flexibility of Allianz | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Allianz organizational structure and capabilities | Keeps the business running |
Customer Community of Allianz | Yes, as customers are co-creating products | Yes, the Allianz has able to build a special relationship with its customers | It is very difficult for Allianz competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Allianz customers community ecosystem | Providing Strong Competitive Advantage |
Ability to Attract Talent in Various Local & Global Markets | Yes, Allianz 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 Allianz | To a large extent yes | Providing Strong Competitive Advantage |
Allianz 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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