Ericsson 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 Ericsson to do better resource allocation and build a defensible value and supply chain.

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What is a Valuable Resource for Ericsson? Defining Valuable in VRIO

A resource or capability is considered valuable for Ericsson , if it allows the Ericsson to exploit opportunities or negate threats emerging out of both the micro business environment and the macro environment. If a resource does not allow Ericsson to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Ericsson.

What are Rare Resources for Ericsson? Defining Rare in VRIO

In an industry that Ericsson operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Ericsson require rare resources to compete in the industry. If Ericsson don’t have rare resources that are required to succeed in the industry then Ericsson won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Ericsson competitive advantage against players that don’t have those rare resources. HBR Case Study Solution

What is a Inimitable (Difficult to Immitate) Resource for Ericsson? Defining Inimitable in VRIO

A valuable and rare resource can provide a competitive advantage to Ericsson 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. Ericsson 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 Ericsson

What is a Organization for Ericsson? Defining Organization in VRIO

Even if the Ericsson 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 Ericsson 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
Successful Implementation of Digital Strategy at Ericsson	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
Ericsson 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 Ericsson	Ericsson is leveraging the customer loyalty to good effect	Provide Ericsson medium term competitive advantage
Distribution and Logistics Costs Competitiveness	Yes, as it helps Ericsson in delivering lower costs	No	Can be imitated by competitors of Ericsson but it is difficult	Yes	Medium to Long Term Competitive Advantage
Track Record of Leadership Team at Ericsson	Yes	Yes	Can't be imitated by competitors	Yes	Providing Strong Competitive Advantage
Brand awareness of Ericsson products and services	Yes, the brand awareness of Ericsson products are high	Yes, Ericsson has one of the leading brand in the industry	No	Ericsson has utilized its leading brand position in various segments	Sustainable Competitive Advantage
Access to Critical Raw Material for Successful Execution	Yes	Yes, as other competitors have to come to terms with Ericsson dominant market position	Can be imitated by competitors	Yes	Providing Sustainable Competitive Advantage
Marketing Expertise within Ericsson	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 Ericsson are often matched by competitors	Yes, Ericsson is leveraging both its inhouse marketing department and external expertise	Temporary Competitive Advantage
Position among Retailers and Wholesalers – Ericsson retail strategy	Yes, Ericsson has strong relationship with retailers and wholesalers	Yes, Ericsson 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 Ericsson	Yes, as a leading player in the industry and current macro economic conditions, Ericsson has access to cheap capital	No	Can be imitated by the competitors of Ericsson	Not been totally exploited	Not significant in creating competitive advantage
Track Record of Project Execution	Yes, especially in an industry where there are frequent cost overun	Yes, especially in the segment that Ericsson operates in	No, none of the competitors so far has able to imitate this expertise	Yes, Ericsson is successful at it	Providing Strong Competitive Advantage
Ability to Attract Talent in Various Local & Global Markets	Yes, Ericsson 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 Ericsson	To a large extent yes	Providing Strong Competitive Advantage
Customer Community of Ericsson	Yes, as customers are co-creating products	Yes, the Ericsson has able to build a special relationship with its customers	It is very difficult for Ericsson competitors to imitate the culture and community dedication	Going by the data, there is still a lot of upside in building on Ericsson customers community ecosystem	Providing Strong Competitive Advantage
Talent to Manage Regulatory and Legal Obligations	Yes	No	Can be imitated by competitors	Yes	Not critical factor
Vision of the Leadership for Next Set of Challenges	Yes	No	Can't be imitated by competitors of Ericsson	Not based on information provided in the case	Can Lead to Strong Competitive Advantage

Ericsson 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