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AIA 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 AIA to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for AIA? Defining Valuable in VRIO
A resource or capability is considered valuable for AIA , if it allows the
AIA to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow AIA to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for AIA.
What are Rare Resources for AIA? Defining Rare in VRIO
In an industry that AIA operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. AIA require rare resources to compete in the industry. If AIA don’t have rare resources that are required to succeed in the industry then AIA won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide AIA competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for AIA? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to AIA 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. AIA 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 AIA
What is a Organization for AIA? Defining Organization in VRIO
Even if the AIA 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 AIA 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 AIA to thwart competition | Yes, IPR and other rights are rare and competition of AIA 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 |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Track Record of Leadership Team at AIA | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Ability to Attract Talent in Various Local & Global Markets | Yes, AIA 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 AIA | To a large extent yes | Providing Strong Competitive Advantage |
Financial Resources of AIA | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | AIA has reasonably sound financial position | AIA has relatively sustainable Competitive Advantage |
Supply Chain Network Flexibility of AIA | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by AIA organizational structure and capabilities | Keeps the business running |
Global and Local Presence of AIA | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of AIA but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Customer Community of AIA | Yes, as customers are co-creating products | Yes, the AIA has able to build a special relationship with its customers | It is very difficult for AIA competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on AIA customers community ecosystem | Providing Strong Competitive Advantage |
Marketing Expertise within AIA | 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 AIA are often matched by competitors | Yes, AIA is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Sales Force and Channel Management of AIA | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide AIA 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 AIA dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Successful Implementation of Digital Strategy at AIA | 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 |
Product Portfolio and Synergy among Various Product Lines of AIA | Yes, it is valuable in the industry given the various segmentations & consumer preferences. | Most of the competitors are trying to enter the lucrative segments | Can be imitated by the competitors | The firm has used it to good effect, details can be found in case exhibit | Provide short term competitive advantage but requires constant innovation to sustain |
Alignment of Activities with AIA 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 |
AIA 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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