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Emerson Electric 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 Emerson Electric to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Emerson Electric? Defining Valuable in VRIO
A resource or capability is considered valuable for Emerson Electric , if it allows the
Emerson Electric to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Emerson Electric to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Emerson Electric.
What are Rare Resources for Emerson Electric? Defining Rare in VRIO
In an industry that Emerson Electric operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Emerson Electric require rare resources to compete in the industry. If Emerson Electric don’t have rare resources that are required to succeed in the industry then Emerson Electric won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Emerson Electric competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Emerson Electric? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Emerson Electric 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. Emerson Electric 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 Emerson Electric
What is a Organization for Emerson Electric? Defining Organization in VRIO
Even if the Emerson Electric 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 Emerson Electric 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 |
---|---|---|---|---|---|
Opportunities in the E-Commerce Space for Emerson Electric - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Emerson Electric 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 in the Adjacent Industries that Emerson Electric 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 |
Ability to Attract Talent in Various Local & Global Markets | Yes, Emerson Electric 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 Emerson Electric | To a large extent yes | Providing Strong Competitive Advantage |
Customer Community of Emerson Electric | Yes, as customers are co-creating products | Yes, the Emerson Electric has able to build a special relationship with its customers | It is very difficult for Emerson Electric competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Emerson Electric customers community ecosystem | Providing Strong Competitive Advantage |
Marketing Expertise within Emerson Electric | 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 Emerson Electric are often matched by competitors | Yes, Emerson Electric is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for Emerson Electric to thwart competition | Yes, IPR and other rights are rare and competition of Emerson Electric 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 |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Position among Retailers and Wholesalers – Emerson Electric retail strategy | Yes, Emerson Electric has strong relationship with retailers and wholesalers | Yes, Emerson Electric has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with Emerson Electric dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of Emerson Electric | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Opportunities for Brand Extensions for Emerson Electric 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 |
Emerson Electric 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 Emerson Electric | Emerson Electric is leveraging the customer loyalty to good effect | Provide Emerson Electric medium term competitive advantage |
Access to Cheap Capital for Emerson Electric | Yes, as a leading player in the industry and current macro economic conditions, Emerson Electric has access to cheap capital | No | Can be imitated by the competitors of Emerson Electric | Not been totally exploited | Not significant in creating competitive advantage |
Brand awareness of Emerson Electric products and services | Yes, the brand awareness of Emerson Electric products are high | Yes, Emerson Electric has one of the leading brand in the industry | No | Emerson Electric has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Emerson Electric 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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