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lenovo 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 lenovo to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for lenovo? Defining Valuable in VRIO
A resource or capability is considered valuable for lenovo , if it allows the
lenovo to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow lenovo to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for lenovo.
What are Rare Resources for lenovo? Defining Rare in VRIO
In an industry that lenovo operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. lenovo require rare resources to compete in the industry. If lenovo don’t have rare resources that are required to succeed in the industry then lenovo won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide lenovo competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for lenovo? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to lenovo 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. lenovo 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 lenovo
What is a Organization for lenovo? Defining Organization in VRIO
Even if the lenovo 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 lenovo 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 for Brand Extensions for lenovo 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 |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of lenovo | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for lenovo to thwart competition | Yes, IPR and other rights are rare and competition of lenovo 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 |
Marketing Expertise within lenovo | 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 lenovo are often matched by competitors | Yes, lenovo is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Product Portfolio and Synergy among Various Product Lines of lenovo | 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 |
lenovo 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 lenovo | lenovo is leveraging the customer loyalty to good effect | Provide lenovo medium term competitive advantage |
Access to Cheap Capital for lenovo | Yes, as a leading player in the industry and current macro economic conditions, lenovo has access to cheap capital | No | Can be imitated by the competitors of lenovo | Not been totally exploited | Not significant in creating competitive advantage |
Distribution and Logistics Costs Competitiveness | Yes, as it helps lenovo in delivering lower costs | No | Can be imitated by competitors of lenovo but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Track Record of Leadership Team at lenovo | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Sales Force and Channel Management of lenovo | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide lenovo sustainable competitive advantage. Potential is certainly there. |
Ability to Attract Talent in Various Local & Global Markets | Yes, lenovo 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 lenovo | To a large extent yes | 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 lenovo operates in | No, none of the competitors so far has able to imitate this expertise | Yes, lenovo is successful at it | Providing Strong Competitive Advantage |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Supply Chain Network Flexibility of lenovo | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by lenovo organizational structure and capabilities | Keeps the business running |
lenovo 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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