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Iberdrola 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 Iberdrola to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Iberdrola? Defining Valuable in VRIO
A resource or capability is considered valuable for Iberdrola , if it allows the
Iberdrola to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Iberdrola to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Iberdrola.
What are Rare Resources for Iberdrola? Defining Rare in VRIO
In an industry that Iberdrola operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Iberdrola require rare resources to compete in the industry. If Iberdrola don’t have rare resources that are required to succeed in the industry then Iberdrola won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Iberdrola competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Iberdrola? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Iberdrola 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. Iberdrola 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 Iberdrola
What is a Organization for Iberdrola? Defining Organization in VRIO
Even if the Iberdrola 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 Iberdrola 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 |
---|---|---|---|---|---|
Ability to Attract Talent in Various Local & Global Markets | Yes, Iberdrola 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 Iberdrola | To a large extent yes | Providing Strong Competitive Advantage |
Brand awareness of Iberdrola products and services | Yes, the brand awareness of Iberdrola products are high | Yes, Iberdrola has one of the leading brand in the industry | No | Iberdrola has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Global and Local Presence of Iberdrola | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Iberdrola but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Supply Chain Network Flexibility of Iberdrola | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Iberdrola organizational structure and capabilities | Keeps the business running |
Track Record of Project Execution | Yes, especially in an industry where there are frequent cost overun | Yes, especially in the segment that Iberdrola operates in | No, none of the competitors so far has able to imitate this expertise | Yes, Iberdrola is successful at it | Providing Strong Competitive Advantage |
Opportunities in the E-Commerce Space for Iberdrola - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Iberdrola 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 |
Brand Positioning of Iberdrola in Comparison to the Competitors | Yes | No | Can be imitated by competitors but it will require big marketing budget | Yes, the firm has positioned its brands based on consumer behavior | Temporary Competitive Advantage |
Access to Cheap Capital for Iberdrola | Yes, as a leading player in the industry and current macro economic conditions, Iberdrola has access to cheap capital | No | Can be imitated by the competitors of Iberdrola | Not been totally exploited | Not significant in creating competitive advantage |
Customer Community of Iberdrola | Yes, as customers are co-creating products | Yes, the Iberdrola has able to build a special relationship with its customers | It is very difficult for Iberdrola competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Iberdrola customers community ecosystem | Providing Strong Competitive Advantage |
Alignment of Activities with Iberdrola 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 |
Track Record of Leadership Team at Iberdrola | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for Iberdrola to thwart competition | Yes, IPR and other rights are rare and competition of Iberdrola 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 |
Opportunities for Brand Extensions for Iberdrola 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 |
Iberdrola 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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