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Medtronic 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 Medtronic to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Medtronic? Defining Valuable in VRIO
A resource or capability is considered valuable for Medtronic , if it allows the
Medtronic to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Medtronic to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Medtronic.
What are Rare Resources for Medtronic? Defining Rare in VRIO
In an industry that Medtronic operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Medtronic require rare resources to compete in the industry. If Medtronic don’t have rare resources that are required to succeed in the industry then Medtronic won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Medtronic competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Medtronic? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Medtronic 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. Medtronic 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 Medtronic
What is a Organization for Medtronic? Defining Organization in VRIO
Even if the Medtronic 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 Medtronic 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 |
---|---|---|---|---|---|
Track Record of Leadership Team at Medtronic | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Alignment of Activities with Medtronic 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 |
Ability to Attract Talent in Various Local & Global Markets | Yes, Medtronic 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 Medtronic | To a large extent yes | Providing Strong Competitive Advantage |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Medtronic in delivering lower costs | No | Can be imitated by competitors of Medtronic but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Customer Community of Medtronic | Yes, as customers are co-creating products | Yes, the Medtronic has able to build a special relationship with its customers | It is very difficult for Medtronic competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Medtronic customers community ecosystem | Providing Strong Competitive Advantage |
Position among Retailers and Wholesalers – Medtronic retail strategy | Yes, Medtronic has strong relationship with retailers and wholesalers | Yes, Medtronic has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Access to Cheap Capital for Medtronic | Yes, as a leading player in the industry and current macro economic conditions, Medtronic has access to cheap capital | No | Can be imitated by the competitors of Medtronic | Not been totally exploited | Not significant in creating competitive advantage |
Global and Local Presence of Medtronic | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Medtronic but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of Medtronic | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Financial Resources of Medtronic | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Medtronic has reasonably sound financial position | Medtronic has relatively sustainable Competitive Advantage |
Opportunities in the Adjacent Industries that Medtronic 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 |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for Medtronic to thwart competition | Yes, IPR and other rights are rare and competition of Medtronic 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 |
Marketing Expertise within Medtronic | 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 Medtronic are often matched by competitors | Yes, Medtronic is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Successful Implementation of Digital Strategy at Medtronic | 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 |
Medtronic 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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