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Orange 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 Orange to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Orange? Defining Valuable in VRIO
A resource or capability is considered valuable for Orange , if it allows the
Orange to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Orange to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Orange.
What are Rare Resources for Orange? Defining Rare in VRIO
In an industry that Orange operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Orange require rare resources to compete in the industry. If Orange don’t have rare resources that are required to succeed in the industry then Orange won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Orange competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Orange? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Orange 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. Orange 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 Orange
What is a Organization for Orange? Defining Organization in VRIO
Even if the Orange 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 Orange 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 |
---|---|---|---|---|---|
Pricing Strategies of Orange | Yes, Orange has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Orange with a Temporary Competitive Advantage |
Ability to Attract Talent in Various Local & Global Markets | Yes, Orange 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 Orange | To a large extent yes | Providing Strong Competitive Advantage |
Marketing Expertise within Orange | 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 Orange are often matched by competitors | Yes, Orange is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Product Portfolio and Synergy among Various Product Lines of Orange | 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 |
Alignment of Activities with Orange 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 |
Position among Retailers and Wholesalers – Orange retail strategy | Yes, Orange has strong relationship with retailers and wholesalers | Yes, Orange has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Global and Local Presence of Orange | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Orange but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for Orange to thwart competition | Yes, IPR and other rights are rare and competition of Orange 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 |
Access to Cheap Capital for Orange | Yes, as a leading player in the industry and current macro economic conditions, Orange has access to cheap capital | No | Can be imitated by the competitors of Orange | Not been totally exploited | Not significant in creating competitive advantage |
Orange 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 Orange | Orange is leveraging the customer loyalty to good effect | Provide Orange medium term competitive advantage |
Track Record of Leadership Team at Orange | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Successful Implementation of Digital Strategy at Orange | 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 Orange dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Supply Chain Network Flexibility of Orange | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Orange organizational structure and capabilities | Keeps the business running |
Orange 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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