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Danaher 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 Danaher to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Danaher? Defining Valuable in VRIO
A resource or capability is considered valuable for Danaher , if it allows the
Danaher to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Danaher to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Danaher.
What are Rare Resources for Danaher? Defining Rare in VRIO
In an industry that Danaher operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Danaher require rare resources to compete in the industry. If Danaher don’t have rare resources that are required to succeed in the industry then Danaher won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Danaher competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Danaher? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Danaher 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. Danaher 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 Danaher
What is a Organization for Danaher? Defining Organization in VRIO
Even if the Danaher 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 Danaher 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 |
---|---|---|---|---|---|
Product Portfolio and Synergy among Various Product Lines of Danaher | 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 |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of Danaher | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Danaher in delivering lower costs | No | Can be imitated by competitors of Danaher but it is difficult | Yes | Medium to Long 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 Danaher operates in | No, none of the competitors so far has able to imitate this expertise | Yes, Danaher is successful at it | Providing Strong Competitive Advantage |
Customer Community of Danaher | Yes, as customers are co-creating products | Yes, the Danaher has able to build a special relationship with its customers | It is very difficult for Danaher competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Danaher customers community ecosystem | Providing Strong Competitive Advantage |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with Danaher dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Position among Retailers and Wholesalers – Danaher retail strategy | Yes, Danaher has strong relationship with retailers and wholesalers | Yes, Danaher has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Ability to Attract Talent in Various Local & Global Markets | Yes, Danaher 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 Danaher | To a large extent yes | Providing Strong Competitive Advantage |
Successful Implementation of Digital Strategy at Danaher | 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 |
Global and Local Presence of Danaher | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Danaher but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Financial Resources of Danaher | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Danaher has reasonably sound financial position | Danaher has relatively sustainable Competitive Advantage |
Opportunities in the E-Commerce Space for Danaher - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Danaher 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 |
Track Record of Leadership Team at Danaher | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Danaher 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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