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ESPN 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 ESPN to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for ESPN? Defining Valuable in VRIO
A resource or capability is considered valuable for ESPN , if it allows the
ESPN to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow ESPN to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for ESPN.
What are Rare Resources for ESPN? Defining Rare in VRIO
In an industry that ESPN operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. ESPN require rare resources to compete in the industry. If ESPN don’t have rare resources that are required to succeed in the industry then ESPN won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide ESPN competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for ESPN? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to ESPN 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. ESPN 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 ESPN
What is a Organization for ESPN? Defining Organization in VRIO
Even if the ESPN 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 ESPN 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 |
---|---|---|---|---|---|
Supply Chain Network Flexibility of ESPN | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by ESPN organizational structure and capabilities | Keeps the business running |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of ESPN | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Track Record of Leadership Team at ESPN | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Opportunities in the Adjacent Industries that ESPN 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 |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for ESPN to thwart competition | Yes, IPR and other rights are rare and competition of ESPN 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 |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with ESPN dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Financial Resources of ESPN | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | ESPN has reasonably sound financial position | ESPN has relatively sustainable Competitive Advantage |
Opportunities for Brand Extensions for ESPN 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 |
Pricing Strategies of ESPN | Yes, ESPN has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide ESPN with a Temporary Competitive Advantage |
Ability to Attract Talent in Various Local & Global Markets | Yes, ESPN 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 ESPN | To a large extent yes | Providing Strong Competitive Advantage |
Brand awareness of ESPN products and services | Yes, the brand awareness of ESPN products are high | Yes, ESPN has one of the leading brand in the industry | No | ESPN has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
ESPN 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 ESPN | ESPN is leveraging the customer loyalty to good effect | Provide ESPN medium term competitive advantage |
Access to Cheap Capital for ESPN | Yes, as a leading player in the industry and current macro economic conditions, ESPN has access to cheap capital | No | Can be imitated by the competitors of ESPN | Not been totally exploited | Not significant in creating competitive advantage |
ESPN 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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