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OptumHealth 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 OptumHealth to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for OptumHealth? Defining Valuable in VRIO
A resource or capability is considered valuable for OptumHealth , if it allows the
OptumHealth to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow OptumHealth to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for OptumHealth.
What are Rare Resources for OptumHealth? Defining Rare in VRIO
In an industry that OptumHealth operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. OptumHealth require rare resources to compete in the industry. If OptumHealth don’t have rare resources that are required to succeed in the industry then OptumHealth won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide OptumHealth competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for OptumHealth? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to OptumHealth 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. OptumHealth 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 OptumHealth
What is a Organization for OptumHealth? Defining Organization in VRIO
Even if the OptumHealth 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 OptumHealth 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 OptumHealth - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and OptumHealth 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 |
Supply Chain Network Flexibility of OptumHealth | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by OptumHealth organizational structure and capabilities | Keeps the business running |
Position among Retailers and Wholesalers – OptumHealth retail strategy | Yes, OptumHealth has strong relationship with retailers and wholesalers | Yes, OptumHealth has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Successful Implementation of Digital Strategy at OptumHealth | 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 |
Opportunities in the Adjacent Industries that OptumHealth 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 |
Distribution and Logistics Costs Competitiveness | Yes, as it helps OptumHealth in delivering lower costs | No | Can be imitated by competitors of OptumHealth but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Marketing Expertise within OptumHealth | 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 OptumHealth are often matched by competitors | Yes, OptumHealth is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Global and Local Presence of OptumHealth | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of OptumHealth but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for OptumHealth to thwart competition | Yes, IPR and other rights are rare and competition of OptumHealth 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 |
Alignment of Activities with OptumHealth 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 |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of OptumHealth | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Product Portfolio and Synergy among Various Product Lines of OptumHealth | 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 |
Brand awareness of OptumHealth products and services | Yes, the brand awareness of OptumHealth products are high | Yes, OptumHealth has one of the leading brand in the industry | No | OptumHealth has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Pricing Strategies of OptumHealth | Yes, OptumHealth has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide OptumHealth with a Temporary Competitive Advantage |
OptumHealth 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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