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Continental 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 Continental to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Continental? Defining Valuable in VRIO
A resource or capability is considered valuable for Continental , if it allows the
Continental to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Continental to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Continental.
What are Rare Resources for Continental? Defining Rare in VRIO
In an industry that Continental operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Continental require rare resources to compete in the industry. If Continental don’t have rare resources that are required to succeed in the industry then Continental won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Continental competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Continental? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Continental 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. Continental 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 Continental
What is a Organization for Continental? Defining Organization in VRIO
Even if the Continental 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 Continental 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, Continental 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 Continental | To a large extent yes | Providing Strong Competitive Advantage |
Position among Retailers and Wholesalers – Continental retail strategy | Yes, Continental has strong relationship with retailers and wholesalers | Yes, Continental has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Brand Positioning of Continental 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 |
Sales Force and Channel Management of Continental | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide Continental sustainable competitive advantage. Potential is certainly there. |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Track Record of Leadership Team at Continental | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Brand awareness of Continental products and services | Yes, the brand awareness of Continental products are high | Yes, Continental has one of the leading brand in the industry | No | Continental has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Pricing Strategies of Continental | Yes, Continental has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Continental with a Temporary Competitive Advantage |
Access to Cheap Capital for Continental | Yes, as a leading player in the industry and current macro economic conditions, Continental has access to cheap capital | No | Can be imitated by the competitors of Continental | Not been totally exploited | Not significant in creating competitive advantage |
Alignment of Activities with Continental 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 |
Global and Local Presence of Continental | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Continental 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 Continental to thwart competition | Yes, IPR and other rights are rare and competition of Continental 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 |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with Continental dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Continental 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 Continental | Continental is leveraging the customer loyalty to good effect | Provide Continental medium term competitive advantage |
Continental 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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