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Claro 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 Claro to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Claro? Defining Valuable in VRIO
A resource or capability is considered valuable for Claro , if it allows the
Claro to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Claro to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Claro.
What are Rare Resources for Claro? Defining Rare in VRIO
In an industry that Claro operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Claro require rare resources to compete in the industry. If Claro don’t have rare resources that are required to succeed in the industry then Claro won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Claro competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Claro? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Claro 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. Claro 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 Claro
What is a Organization for Claro? Defining Organization in VRIO
Even if the Claro 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 Claro 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 |
---|---|---|---|---|---|
Ability to Attract Talent in Various Local & Global Markets | Yes, Claro 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 Claro | To a large extent yes | Providing Strong Competitive Advantage |
Opportunities in the Adjacent Industries that Claro 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 |
Product Portfolio and Synergy among Various Product Lines of Claro | 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 |
Access to Cheap Capital for Claro | Yes, as a leading player in the industry and current macro economic conditions, Claro has access to cheap capital | No | Can be imitated by the competitors of Claro | Not been totally exploited | Not significant in creating competitive advantage |
Brand Positioning of Claro 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 |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for Claro to thwart competition | Yes, IPR and other rights are rare and competition of Claro 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 |
Track Record of Leadership Team at Claro | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Pricing Strategies of Claro | Yes, Claro has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Claro with a Temporary Competitive Advantage |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Claro in delivering lower costs | No | Can be imitated by competitors of Claro but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of Claro | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Opportunities in the E-Commerce Space for Claro - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Claro 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 |
Sales Force and Channel Management of Claro | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide Claro sustainable competitive advantage. Potential is certainly there. |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Claro 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 Claro | Claro is leveraging the customer loyalty to good effect | Provide Claro medium term competitive advantage |
Claro 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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