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PwC 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 PwC to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for PwC? Defining Valuable in VRIO
A resource or capability is considered valuable for PwC , if it allows the
PwC to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow PwC to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for PwC.
What are Rare Resources for PwC? Defining Rare in VRIO
In an industry that PwC operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. PwC require rare resources to compete in the industry. If PwC don’t have rare resources that are required to succeed in the industry then PwC won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide PwC competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for PwC? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to PwC 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. PwC 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 PwC
What is a Organization for PwC? Defining Organization in VRIO
Even if the PwC 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 PwC 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 |
---|---|---|---|---|---|
Global and Local Presence of PwC | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of PwC but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
PwC 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 PwC | PwC is leveraging the customer loyalty to good effect | Provide PwC medium term competitive advantage |
Brand Positioning of PwC 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 |
Ability to Attract Talent in Various Local & Global Markets | Yes, PwC 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 PwC | To a large extent yes | Providing Strong Competitive Advantage |
Pricing Strategies of PwC | Yes, PwC has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide PwC with a Temporary Competitive Advantage |
Opportunities in the Adjacent Industries that PwC 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 |
Brand awareness of PwC products and services | Yes, the brand awareness of PwC products are high | Yes, PwC has one of the leading brand in the industry | No | PwC has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Financial Resources of PwC | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | PwC has reasonably sound financial position | PwC has relatively sustainable Competitive Advantage |
Supply Chain Network Flexibility of PwC | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by PwC organizational structure and capabilities | Keeps the business running |
Customer Community of PwC | Yes, as customers are co-creating products | Yes, the PwC has able to build a special relationship with its customers | It is very difficult for PwC competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on PwC customers community ecosystem | Providing Strong Competitive Advantage |
Sales Force and Channel Management of PwC | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide PwC sustainable competitive advantage. Potential is certainly there. |
Alignment of Activities with PwC 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 |
Distribution and Logistics Costs Competitiveness | Yes, as it helps PwC in delivering lower costs | No | Can be imitated by competitors of PwC but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of PwC | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
PwC 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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