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Cisco 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 Cisco to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Cisco? Defining Valuable in VRIO
A resource or capability is considered valuable for Cisco , if it allows the
Cisco to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Cisco to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Cisco.
What are Rare Resources for Cisco? Defining Rare in VRIO
In an industry that Cisco operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Cisco require rare resources to compete in the industry. If Cisco don’t have rare resources that are required to succeed in the industry then Cisco won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Cisco competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Cisco? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Cisco 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. Cisco 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 Cisco
What is a Organization for Cisco? Defining Organization in VRIO
Even if the Cisco 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 Cisco 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 |
---|---|---|---|---|---|
Cisco 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 Cisco | Cisco is leveraging the customer loyalty to good effect | Provide Cisco medium term competitive advantage |
Opportunities for Brand Extensions for Cisco 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 |
Alignment of Activities with Cisco 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 |
Pricing Strategies of Cisco | Yes, Cisco has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Cisco with a Temporary Competitive Advantage |
Track Record of Leadership Team at Cisco | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for Cisco to thwart competition | Yes, IPR and other rights are rare and competition of Cisco will find it extremely difficult to copy | Risk of imitation is low but given the margins in the industry disruption chances are high | So far the firm has not utilized the full extent of its IPR & other properties | Providing Strong Competitive Advantage |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of Cisco | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Product Portfolio and Synergy among Various Product Lines of Cisco | 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 |
Access to Cheap Capital for Cisco | Yes, as a leading player in the industry and current macro economic conditions, Cisco has access to cheap capital | No | Can be imitated by the competitors of Cisco | Not been totally exploited | Not significant in creating competitive advantage |
Brand awareness of Cisco products and services | Yes, the brand awareness of Cisco products are high | Yes, Cisco has one of the leading brand in the industry | No | Cisco has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Customer Community of Cisco | Yes, as customers are co-creating products | Yes, the Cisco has able to build a special relationship with its customers | It is very difficult for Cisco competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Cisco customers community ecosystem | Providing Strong Competitive Advantage |
Supply Chain Network Flexibility of Cisco | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Cisco organizational structure and capabilities | Keeps the business running |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with Cisco dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Brand Positioning of Cisco 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 |
Cisco 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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