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LG Group 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 LG Group to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for LG Group? Defining Valuable in VRIO
A resource or capability is considered valuable for LG Group , if it allows the
LG Group to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow LG Group to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for LG Group.
What are Rare Resources for LG Group? Defining Rare in VRIO
In an industry that LG Group operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. LG Group require rare resources to compete in the industry. If LG Group don’t have rare resources that are required to succeed in the industry then LG Group won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide LG Group competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for LG Group? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to LG Group 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. LG Group 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 LG Group
What is a Organization for LG Group? Defining Organization in VRIO
Even if the LG Group 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 LG Group 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 |
---|---|---|---|---|---|
Position among Retailers and Wholesalers – LG Group retail strategy | Yes, LG Group has strong relationship with retailers and wholesalers | Yes, LG Group has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Product Portfolio and Synergy among Various Product Lines of LG Group | 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 |
Supply Chain Network Flexibility of LG Group | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by LG Group organizational structure and capabilities | Keeps the business running |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with LG Group dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Alignment of Activities with LG Group 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 |
Pricing Strategies of LG Group | Yes, LG Group has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide LG Group with a Temporary Competitive Advantage |
Successful Implementation of Digital Strategy at LG Group | 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 |
Marketing Expertise within LG Group | 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 LG Group are often matched by competitors | Yes, LG Group is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Customer Community of LG Group | Yes, as customers are co-creating products | Yes, the LG Group has able to build a special relationship with its customers | It is very difficult for LG Group competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on LG Group customers community ecosystem | Providing Strong Competitive Advantage |
Opportunities in the E-Commerce Space for LG Group - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and LG Group 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 |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Access to Cheap Capital for LG Group | Yes, as a leading player in the industry and current macro economic conditions, LG Group has access to cheap capital | No | Can be imitated by the competitors of LG Group | Not been totally exploited | Not significant in creating competitive advantage |
Opportunities in the Adjacent Industries that LG Group 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 Positioning of LG Group 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 |
LG Group 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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