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Airtel 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 Airtel to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Airtel? Defining Valuable in VRIO
A resource or capability is considered valuable for Airtel , if it allows the
Airtel to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Airtel to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Airtel.
What are Rare Resources for Airtel? Defining Rare in VRIO
In an industry that Airtel operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Airtel require rare resources to compete in the industry. If Airtel don’t have rare resources that are required to succeed in the industry then Airtel won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Airtel competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Airtel? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Airtel 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. Airtel 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 Airtel
What is a Organization for Airtel? Defining Organization in VRIO
Even if the Airtel 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 Airtel 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 |
---|---|---|---|---|---|
Opportunities for Brand Extensions for Airtel 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 |
Successful Implementation of Digital Strategy at Airtel | 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 |
Airtel 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 Airtel | Airtel is leveraging the customer loyalty to good effect | Provide Airtel medium term competitive advantage |
Opportunities in the Adjacent Industries that Airtel 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 |
Pricing Strategies of Airtel | Yes, Airtel has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Airtel with a Temporary Competitive Advantage |
Brand Positioning of Airtel 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 |
Brand awareness of Airtel products and services | Yes, the brand awareness of Airtel products are high | Yes, Airtel has one of the leading brand in the industry | No | Airtel has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Supply Chain Network Flexibility of Airtel | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Airtel organizational structure and capabilities | Keeps the business running |
Global and Local Presence of Airtel | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Airtel but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for Airtel to thwart competition | Yes, IPR and other rights are rare and competition of Airtel 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 |
Sales Force and Channel Management of Airtel | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide Airtel sustainable competitive advantage. Potential is certainly there. |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with Airtel dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Opportunities in the E-Commerce Space for Airtel - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Airtel can exploit the emerging opportunities | No, most of the competitors are investing in IT to enter the space | The AI and inhouse analytics can be difficult to imitate | It is just the start for the organization | In the long run it can provide sustainable competitive advantage |
Access to Cheap Capital for Airtel | Yes, as a leading player in the industry and current macro economic conditions, Airtel has access to cheap capital | No | Can be imitated by the competitors of Airtel | Not been totally exploited | Not significant in creating competitive advantage |
Airtel 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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