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Arconic 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 Arconic to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Arconic? Defining Valuable in VRIO
A resource or capability is considered valuable for Arconic , if it allows the
Arconic to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Arconic to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Arconic.
What are Rare Resources for Arconic? Defining Rare in VRIO
In an industry that Arconic operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Arconic require rare resources to compete in the industry. If Arconic don’t have rare resources that are required to succeed in the industry then Arconic won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Arconic competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Arconic? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Arconic 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. Arconic 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 Arconic
What is a Organization for Arconic? Defining Organization in VRIO
Even if the Arconic 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 Arconic 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 |
---|---|---|---|---|---|
Access to Cheap Capital for Arconic | Yes, as a leading player in the industry and current macro economic conditions, Arconic has access to cheap capital | No | Can be imitated by the competitors of Arconic | Not been totally exploited | Not significant in creating competitive advantage |
Position among Retailers and Wholesalers – Arconic retail strategy | Yes, Arconic has strong relationship with retailers and wholesalers | Yes, Arconic has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Ability to Attract Talent in Various Local & Global Markets | Yes, Arconic 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 Arconic | To a large extent yes | Providing Strong Competitive Advantage |
Customer Community of Arconic | Yes, as customers are co-creating products | Yes, the Arconic has able to build a special relationship with its customers | It is very difficult for Arconic competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Arconic 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 Arconic operates in | No, none of the competitors so far has able to imitate this expertise | Yes, Arconic is successful at it | Providing Strong Competitive Advantage |
Brand Positioning of Arconic 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 |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Sales Force and Channel Management of Arconic | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide Arconic sustainable competitive advantage. Potential is certainly there. |
Alignment of Activities with Arconic 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 |
Financial Resources of Arconic | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Arconic has reasonably sound financial position | Arconic has relatively sustainable Competitive Advantage |
Opportunities in the E-Commerce Space for Arconic - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Arconic 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 |
Opportunities for Brand Extensions for Arconic 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 |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for Arconic to thwart competition | Yes, IPR and other rights are rare and competition of Arconic 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 |
Opportunities in the Adjacent Industries that Arconic 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 |
Arconic 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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