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Ford 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 Ford to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Ford? Defining Valuable in VRIO
A resource or capability is considered valuable for Ford , if it allows the
Ford to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Ford to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Ford.
What are Rare Resources for Ford? Defining Rare in VRIO
In an industry that Ford operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Ford require rare resources to compete in the industry. If Ford don’t have rare resources that are required to succeed in the industry then Ford won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Ford competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Ford? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Ford 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. Ford 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 Ford
What is a Organization for Ford? Defining Organization in VRIO
Even if the Ford 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 Ford 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 |
---|---|---|---|---|---|
Distribution and Logistics Costs Competitiveness | Yes, as it helps Ford in delivering lower costs | No | Can be imitated by competitors of Ford but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Opportunities in the E-Commerce Space for Ford - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Ford 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 |
Alignment of Activities with Ford 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 |
Product Portfolio and Synergy among Various Product Lines of Ford | Yes, it is valuable in the industry given the various segmentations & consumer preferences. | Most of the competitors are trying to enter the lucrative segments | Can be imitated by the competitors | The firm has used it to good effect, details can be found in case exhibit | Provide short term competitive advantage but requires constant innovation to sustain |
Successful Implementation of Digital Strategy at Ford | 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 |
Pricing Strategies of Ford | Yes, Ford has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Ford with a Temporary Competitive Advantage |
Financial Resources of Ford | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Ford has reasonably sound financial position | Ford has relatively sustainable Competitive Advantage |
Customer Community of Ford | Yes, as customers are co-creating products | Yes, the Ford has able to build a special relationship with its customers | It is very difficult for Ford competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Ford customers community ecosystem | Providing Strong Competitive Advantage |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with Ford dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Brand Positioning of Ford 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 |
Ford 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 Ford | Ford is leveraging the customer loyalty to good effect | Provide Ford medium term competitive advantage |
Marketing Expertise within Ford | 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 Ford are often matched by competitors | Yes, Ford is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Position among Retailers and Wholesalers – Ford retail strategy | Yes, Ford has strong relationship with retailers and wholesalers | Yes, Ford has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of Ford | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Ford 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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