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Munich Re 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 Munich Re to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Munich Re? Defining Valuable in VRIO
A resource or capability is considered valuable for Munich Re , if it allows the
Munich Re to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Munich Re to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Munich Re.
What are Rare Resources for Munich Re? Defining Rare in VRIO
In an industry that Munich Re operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Munich Re require rare resources to compete in the industry. If Munich Re don’t have rare resources that are required to succeed in the industry then Munich Re won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Munich Re competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Munich Re? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Munich Re 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. Munich Re 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 Munich Re
What is a Organization for Munich Re? Defining Organization in VRIO
Even if the Munich Re 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 Munich Re 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, Munich Re 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 Munich Re | To a large extent yes | Providing Strong Competitive Advantage |
Alignment of Activities with Munich Re 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 |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for Munich Re to thwart competition | Yes, IPR and other rights are rare and competition of Munich Re 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 |
Brand Positioning of Munich Re 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 |
Munich Re 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 Munich Re | Munich Re is leveraging the customer loyalty to good effect | Provide Munich Re medium term competitive advantage |
Pricing Strategies of Munich Re | Yes, Munich Re has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Munich Re with a Temporary Competitive Advantage |
Opportunities in the E-Commerce Space for Munich Re - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Munich Re 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 |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of Munich Re | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with Munich Re dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Brand awareness of Munich Re products and services | Yes, the brand awareness of Munich Re products are high | Yes, Munich Re has one of the leading brand in the industry | No | Munich Re has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Product Portfolio and Synergy among Various Product Lines of Munich Re | 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 |
Global and Local Presence of Munich Re | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Munich Re but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Position among Retailers and Wholesalers – Munich Re retail strategy | Yes, Munich Re has strong relationship with retailers and wholesalers | Yes, Munich Re has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Munich Re 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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