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China Telecom 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 China Telecom to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for China Telecom? Defining Valuable in VRIO
A resource or capability is considered valuable for China Telecom , if it allows the
China Telecom to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow China Telecom to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for China Telecom.
What are Rare Resources for China Telecom? Defining Rare in VRIO
In an industry that China Telecom operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. China Telecom require rare resources to compete in the industry. If China Telecom don’t have rare resources that are required to succeed in the industry then China Telecom won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide China Telecom competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for China Telecom? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to China Telecom 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. China Telecom 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 China Telecom
What is a Organization for China Telecom? Defining Organization in VRIO
Even if the China Telecom 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 China Telecom 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 |
---|---|---|---|---|---|
Brand awareness of China Telecom products and services | Yes, the brand awareness of China Telecom products are high | Yes, China Telecom has one of the leading brand in the industry | No | China Telecom has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Ability to Attract Talent in Various Local & Global Markets | Yes, China Telecom 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 China Telecom | To a large extent yes | Providing Strong Competitive Advantage |
Product Portfolio and Synergy among Various Product Lines of China Telecom | 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 |
Brand Positioning of China Telecom 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 |
China Telecom 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 China Telecom | China Telecom is leveraging the customer loyalty to good effect | Provide China Telecom medium term competitive advantage |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for China Telecom to thwart competition | Yes, IPR and other rights are rare and competition of China Telecom 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 |
Global and Local Presence of China Telecom | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of China Telecom but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Marketing Expertise within China Telecom | 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 China Telecom are often matched by competitors | Yes, China Telecom is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Opportunities in the E-Commerce Space for China Telecom - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and China Telecom 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 |
Distribution and Logistics Costs Competitiveness | Yes, as it helps China Telecom in delivering lower costs | No | Can be imitated by competitors of China Telecom but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Pricing Strategies of China Telecom | Yes, China Telecom has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide China Telecom with a Temporary Competitive Advantage |
Opportunities in the Adjacent Industries that China Telecom 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 |
Position among Retailers and Wholesalers – China Telecom retail strategy | Yes, China Telecom has strong relationship with retailers and wholesalers | Yes, China Telecom has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Sales Force and Channel Management of China Telecom | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide China Telecom sustainable competitive advantage. Potential is certainly there. |
China Telecom 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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