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Sumitomo (Conglomerate) 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 Sumitomo (Conglomerate) to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Sumitomo (Conglomerate)? Defining Valuable in VRIO
A resource or capability is considered valuable for Sumitomo (Conglomerate) , if it allows the
Sumitomo (Conglomerate) to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Sumitomo (Conglomerate) to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Sumitomo (Conglomerate).
What are Rare Resources for Sumitomo (Conglomerate)? Defining Rare in VRIO
In an industry that Sumitomo (Conglomerate) operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Sumitomo (Conglomerate) require rare resources to compete in the industry. If Sumitomo (Conglomerate) don’t have rare resources that are required to succeed in the industry then Sumitomo (Conglomerate) won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Sumitomo (Conglomerate) competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Sumitomo (Conglomerate)? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Sumitomo (Conglomerate) 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. Sumitomo (Conglomerate) 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 Sumitomo (Conglomerate)
What is a Organization for Sumitomo (Conglomerate)? Defining Organization in VRIO
Even if the Sumitomo (Conglomerate) 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 Sumitomo (Conglomerate) 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 |
---|---|---|---|---|---|
Access to Cheap Capital for Sumitomo (Conglomerate) | Yes, as a leading player in the industry and current macro economic conditions, Sumitomo (Conglomerate) has access to cheap capital | No | Can be imitated by the competitors of Sumitomo (Conglomerate) | Not been totally exploited | Not significant in creating competitive advantage |
Pricing Strategies of Sumitomo (Conglomerate) | Yes, Sumitomo (Conglomerate) has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Sumitomo (Conglomerate) with a Temporary Competitive Advantage |
Successful Implementation of Digital Strategy at Sumitomo (Conglomerate) | 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 |
Ability to Attract Talent in Various Local & Global Markets | Yes, Sumitomo (Conglomerate) 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 Sumitomo (Conglomerate) | To a large extent yes | Providing Strong Competitive Advantage |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Sumitomo (Conglomerate) in delivering lower costs | No | Can be imitated by competitors of Sumitomo (Conglomerate) but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Position among Retailers and Wholesalers – Sumitomo (Conglomerate) retail strategy | Yes, Sumitomo (Conglomerate) has strong relationship with retailers and wholesalers | Yes, Sumitomo (Conglomerate) has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Brand awareness of Sumitomo (Conglomerate) products and services | Yes, the brand awareness of Sumitomo (Conglomerate) products are high | Yes, Sumitomo (Conglomerate) has one of the leading brand in the industry | No | Sumitomo (Conglomerate) has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Track Record of Project Execution | Yes, especially in an industry where there are frequent cost overun | Yes, especially in the segment that Sumitomo (Conglomerate) operates in | No, none of the competitors so far has able to imitate this expertise | Yes, Sumitomo (Conglomerate) is successful at it | Providing Strong Competitive Advantage |
Opportunities for Brand Extensions for Sumitomo (Conglomerate) 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 Sumitomo (Conglomerate) 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 |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Opportunities in the Adjacent Industries that Sumitomo (Conglomerate) 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 |
Global and Local Presence of Sumitomo (Conglomerate) | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Sumitomo (Conglomerate) but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Sumitomo (Conglomerate) 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 Sumitomo (Conglomerate) | Sumitomo (Conglomerate) is leveraging the customer loyalty to good effect | Provide Sumitomo (Conglomerate) medium term competitive advantage |
Sumitomo (Conglomerate) 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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