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CREC 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 CREC to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for CREC? Defining Valuable in VRIO
A resource or capability is considered valuable for CREC , if it allows the
CREC to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow CREC to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for CREC.
What are Rare Resources for CREC? Defining Rare in VRIO
In an industry that CREC operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. CREC require rare resources to compete in the industry. If CREC don’t have rare resources that are required to succeed in the industry then CREC won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide CREC competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for CREC? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to CREC 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. CREC 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 CREC
What is a Organization for CREC? Defining Organization in VRIO
Even if the CREC 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 CREC 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 |
---|---|---|---|---|---|
Pricing Strategies of CREC | Yes, CREC has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide CREC with a Temporary Competitive Advantage |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
CREC 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 CREC | CREC is leveraging the customer loyalty to good effect | Provide CREC medium term competitive advantage |
Track Record of Project Execution | Yes, especially in an industry where there are frequent cost overun | Yes, especially in the segment that CREC operates in | No, none of the competitors so far has able to imitate this expertise | Yes, CREC is successful at it | Providing Strong Competitive Advantage |
Sales Force and Channel Management of CREC | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide CREC sustainable competitive advantage. Potential is certainly there. |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for CREC to thwart competition | Yes, IPR and other rights are rare and competition of CREC 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 |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of CREC | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Brand awareness of CREC products and services | Yes, the brand awareness of CREC products are high | Yes, CREC has one of the leading brand in the industry | No | CREC has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Track Record of Leadership Team at CREC | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Position among Retailers and Wholesalers – CREC retail strategy | Yes, CREC has strong relationship with retailers and wholesalers | Yes, CREC has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Opportunities in the Adjacent Industries that CREC 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 |
Access to Cheap Capital for CREC | Yes, as a leading player in the industry and current macro economic conditions, CREC has access to cheap capital | No | Can be imitated by the competitors of CREC | Not been totally exploited | Not significant in creating competitive advantage |
Financial Resources of CREC | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | CREC has reasonably sound financial position | CREC has relatively sustainable Competitive Advantage |
Distribution and Logistics Costs Competitiveness | Yes, as it helps CREC in delivering lower costs | No | Can be imitated by competitors of CREC but it is difficult | Yes | Medium to Long Term Competitive Advantage |
CREC 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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