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Dell 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 Dell to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Dell? Defining Valuable in VRIO
A resource or capability is considered valuable for Dell , if it allows the
Dell to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Dell to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Dell.
What are Rare Resources for Dell? Defining Rare in VRIO
In an industry that Dell operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Dell require rare resources to compete in the industry. If Dell don’t have rare resources that are required to succeed in the industry then Dell won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Dell competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Dell? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Dell 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. Dell 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 Dell
What is a Organization for Dell? Defining Organization in VRIO
Even if the Dell 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 Dell 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 |
---|---|---|---|---|---|
Dell 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 Dell | Dell is leveraging the customer loyalty to good effect | Provide Dell medium term competitive advantage |
Pricing Strategies of Dell | Yes, Dell has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Dell with a Temporary Competitive Advantage |
Brand Positioning of Dell 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 |
Alignment of Activities with Dell 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 |
Financial Resources of Dell | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Dell has reasonably sound financial position | Dell has relatively sustainable Competitive Advantage |
Customer Community of Dell | Yes, as customers are co-creating products | Yes, the Dell has able to build a special relationship with its customers | It is very difficult for Dell competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Dell customers community ecosystem | Providing Strong Competitive Advantage |
Ability to Attract Talent in Various Local & Global Markets | Yes, Dell 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 Dell | To a large extent yes | Providing Strong Competitive Advantage |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of Dell | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Track Record of Leadership Team at Dell | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Sales Force and Channel Management of Dell | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide Dell sustainable competitive advantage. Potential is certainly there. |
Opportunities in the Adjacent Industries that Dell 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 |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Dell in delivering lower costs | No | Can be imitated by competitors of Dell but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with Dell dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Dell 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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