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Xbox 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 Xbox to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Xbox? Defining Valuable in VRIO
A resource or capability is considered valuable for Xbox , if it allows the
Xbox to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Xbox to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Xbox.
What are Rare Resources for Xbox? Defining Rare in VRIO
In an industry that Xbox operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Xbox require rare resources to compete in the industry. If Xbox don’t have rare resources that are required to succeed in the industry then Xbox won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Xbox competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Xbox? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Xbox 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. Xbox 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 Xbox
What is a Organization for Xbox? Defining Organization in VRIO
Even if the Xbox 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 Xbox 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 |
---|---|---|---|---|---|
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for Xbox to thwart competition | Yes, IPR and other rights are rare and competition of Xbox 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 Cheap Capital for Xbox | Yes, as a leading player in the industry and current macro economic conditions, Xbox has access to cheap capital | No | Can be imitated by the competitors of Xbox | Not been totally exploited | Not significant in creating competitive advantage |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with Xbox dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Brand Positioning of Xbox 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 |
Customer Community of Xbox | Yes, as customers are co-creating products | Yes, the Xbox has able to build a special relationship with its customers | It is very difficult for Xbox competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Xbox customers community ecosystem | Providing Strong Competitive Advantage |
Track Record of Project Execution | Yes, especially in an industry where there are frequent cost overun | Yes, especially in the segment that Xbox operates in | No, none of the competitors so far has able to imitate this expertise | Yes, Xbox is successful at it | Providing Strong Competitive Advantage |
Global and Local Presence of Xbox | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Xbox but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Opportunities in the Adjacent Industries that Xbox 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 awareness of Xbox products and services | Yes, the brand awareness of Xbox products are high | Yes, Xbox has one of the leading brand in the industry | No | Xbox has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Position among Retailers and Wholesalers – Xbox retail strategy | Yes, Xbox has strong relationship with retailers and wholesalers | Yes, Xbox has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of Xbox | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Successful Implementation of Digital Strategy at Xbox | 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 |
Xbox 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 Xbox | Xbox is leveraging the customer loyalty to good effect | Provide Xbox medium term competitive advantage |
Marketing Expertise within Xbox | 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 Xbox are often matched by competitors | Yes, Xbox is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Xbox 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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