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Aeon 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 Aeon to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Aeon? Defining Valuable in VRIO
A resource or capability is considered valuable for Aeon , if it allows the
Aeon to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Aeon to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Aeon.
What are Rare Resources for Aeon? Defining Rare in VRIO
In an industry that Aeon operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Aeon require rare resources to compete in the industry. If Aeon don’t have rare resources that are required to succeed in the industry then Aeon won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Aeon competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Aeon? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Aeon 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. Aeon 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 Aeon
What is a Organization for Aeon? Defining Organization in VRIO
Even if the Aeon 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 Aeon 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 |
---|---|---|---|---|---|
Global and Local Presence of Aeon | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Aeon but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Financial Resources of Aeon | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Aeon has reasonably sound financial position | Aeon has relatively sustainable Competitive Advantage |
Alignment of Activities with Aeon 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 |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Opportunities in the Adjacent Industries that Aeon 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 |
Sales Force and Channel Management of Aeon | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide Aeon sustainable competitive advantage. Potential is certainly there. |
Customer Community of Aeon | Yes, as customers are co-creating products | Yes, the Aeon has able to build a special relationship with its customers | It is very difficult for Aeon competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Aeon customers community ecosystem | Providing Strong Competitive Advantage |
Supply Chain Network Flexibility of Aeon | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Aeon organizational structure and capabilities | Keeps the business running |
Marketing Expertise within Aeon | 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 Aeon are often matched by competitors | Yes, Aeon is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Access to Cheap Capital for Aeon | Yes, as a leading player in the industry and current macro economic conditions, Aeon has access to cheap capital | No | Can be imitated by the competitors of Aeon | Not been totally exploited | Not significant in creating competitive advantage |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of Aeon | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Aeon in delivering lower costs | No | Can be imitated by competitors of Aeon but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Brand awareness of Aeon products and services | Yes, the brand awareness of Aeon products are high | Yes, Aeon has one of the leading brand in the industry | No | Aeon has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Opportunities for Brand Extensions for Aeon 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 |
Aeon 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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