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TSMC 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 TSMC to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for TSMC? Defining Valuable in VRIO
A resource or capability is considered valuable for TSMC , if it allows the
TSMC to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow TSMC to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for TSMC.
What are Rare Resources for TSMC? Defining Rare in VRIO
In an industry that TSMC operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. TSMC require rare resources to compete in the industry. If TSMC don’t have rare resources that are required to succeed in the industry then TSMC won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide TSMC competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for TSMC? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to TSMC 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. TSMC 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 TSMC
What is a Organization for TSMC? Defining Organization in VRIO
Even if the TSMC 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 TSMC 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 |
---|---|---|---|---|---|
Distribution and Logistics Costs Competitiveness | Yes, as it helps TSMC in delivering lower costs | No | Can be imitated by competitors of TSMC but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Supply Chain Network Flexibility of TSMC | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by TSMC organizational structure and capabilities | Keeps the business running |
Track Record of Leadership Team at TSMC | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Financial Resources of TSMC | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | TSMC has reasonably sound financial position | TSMC has relatively sustainable Competitive Advantage |
Brand awareness of TSMC products and services | Yes, the brand awareness of TSMC products are high | Yes, TSMC has one of the leading brand in the industry | No | TSMC has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Sales Force and Channel Management of TSMC | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide TSMC sustainable competitive advantage. Potential is certainly there. |
Customer Community of TSMC | Yes, as customers are co-creating products | Yes, the TSMC has able to build a special relationship with its customers | It is very difficult for TSMC competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on TSMC customers community ecosystem | Providing Strong Competitive Advantage |
Alignment of Activities with TSMC 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 |
Access to Cheap Capital for TSMC | Yes, as a leading player in the industry and current macro economic conditions, TSMC has access to cheap capital | No | Can be imitated by the competitors of TSMC | Not been totally exploited | Not significant in creating competitive advantage |
Position among Retailers and Wholesalers – TSMC retail strategy | Yes, TSMC has strong relationship with retailers and wholesalers | Yes, TSMC has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of TSMC | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Opportunities for Brand Extensions for TSMC 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 |
Track Record of Project Execution | Yes, especially in an industry where there are frequent cost overun | Yes, especially in the segment that TSMC operates in | No, none of the competitors so far has able to imitate this expertise | Yes, TSMC is successful at it | Providing Strong Competitive Advantage |
Opportunities in the E-Commerce Space for TSMC - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and TSMC 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 |
TSMC 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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