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Tech Data 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 Tech Data to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Tech Data? Defining Valuable in VRIO
A resource or capability is considered valuable for Tech Data , if it allows the
Tech Data to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Tech Data to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Tech Data.
What are Rare Resources for Tech Data? Defining Rare in VRIO
In an industry that Tech Data operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Tech Data require rare resources to compete in the industry. If Tech Data don’t have rare resources that are required to succeed in the industry then Tech Data won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Tech Data competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Tech Data? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Tech Data 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. Tech Data 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 Tech Data
What is a Organization for Tech Data? Defining Organization in VRIO
Even if the Tech Data 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 Tech Data 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 |
---|---|---|---|---|---|
Customer Community of Tech Data | Yes, as customers are co-creating products | Yes, the Tech Data has able to build a special relationship with its customers | It is very difficult for Tech Data competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Tech Data customers community ecosystem | Providing Strong Competitive Advantage |
Financial Resources of Tech Data | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Tech Data has reasonably sound financial position | Tech Data has relatively sustainable Competitive Advantage |
Sales Force and Channel Management of Tech Data | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide Tech Data sustainable competitive advantage. Potential is certainly there. |
Opportunities for Brand Extensions for Tech Data 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 Tech Data 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 |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with Tech Data dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Position among Retailers and Wholesalers – Tech Data retail strategy | Yes, Tech Data has strong relationship with retailers and wholesalers | Yes, Tech Data has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Tech Data in delivering lower costs | No | Can be imitated by competitors of Tech Data but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Access to Cheap Capital for Tech Data | Yes, as a leading player in the industry and current macro economic conditions, Tech Data has access to cheap capital | No | Can be imitated by the competitors of Tech Data | Not been totally exploited | Not significant in creating competitive advantage |
Tech Data 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 Tech Data | Tech Data is leveraging the customer loyalty to good effect | Provide Tech Data medium term competitive advantage |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for Tech Data to thwart competition | Yes, IPR and other rights are rare and competition of Tech Data 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 |
Track Record of Project Execution | Yes, especially in an industry where there are frequent cost overun | Yes, especially in the segment that Tech Data operates in | No, none of the competitors so far has able to imitate this expertise | Yes, Tech Data is successful at it | Providing Strong Competitive Advantage |
Product Portfolio and Synergy among Various Product Lines of Tech Data | 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 |
Tech Data 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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