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British Airways 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 British Airways to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for British Airways? Defining Valuable in VRIO
A resource or capability is considered valuable for British Airways , if it allows the
British Airways to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow British Airways to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for British Airways.
What are Rare Resources for British Airways? Defining Rare in VRIO
In an industry that British Airways operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. British Airways require rare resources to compete in the industry. If British Airways don’t have rare resources that are required to succeed in the industry then British Airways won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide British Airways competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for British Airways? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to British Airways 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. British Airways 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 British Airways
What is a Organization for British Airways? Defining Organization in VRIO
Even if the British Airways 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 British Airways 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 |
---|---|---|---|---|---|
Financial Resources of British Airways | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | British Airways has reasonably sound financial position | British Airways has relatively sustainable Competitive Advantage |
Sales Force and Channel Management of British Airways | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide British Airways sustainable competitive advantage. Potential is certainly there. |
Product Portfolio and Synergy among Various Product Lines of British Airways | 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 |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for British Airways to thwart competition | Yes, IPR and other rights are rare and competition of British Airways 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 Project Execution | Yes, especially in an industry where there are frequent cost overun | Yes, especially in the segment that British Airways operates in | No, none of the competitors so far has able to imitate this expertise | Yes, British Airways is successful at it | Providing Strong Competitive Advantage |
Ability to Attract Talent in Various Local & Global Markets | Yes, British Airways 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 British Airways | To a large extent yes | Providing Strong Competitive Advantage |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Access to Cheap Capital for British Airways | Yes, as a leading player in the industry and current macro economic conditions, British Airways has access to cheap capital | No | Can be imitated by the competitors of British Airways | Not been totally exploited | Not significant in creating competitive advantage |
Successful Implementation of Digital Strategy at British Airways | 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 |
Brand awareness of British Airways products and services | Yes, the brand awareness of British Airways products are high | Yes, British Airways has one of the leading brand in the industry | No | British Airways has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Alignment of Activities with British Airways 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 Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with British Airways dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Supply Chain Network Flexibility of British Airways | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by British Airways organizational structure and capabilities | Keeps the business running |
Global and Local Presence of British Airways | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of British Airways but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
British Airways 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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