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Chow Tai Fook 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 Chow Tai Fook to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Chow Tai Fook? Defining Valuable in VRIO
A resource or capability is considered valuable for Chow Tai Fook , if it allows the
Chow Tai Fook to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Chow Tai Fook to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Chow Tai Fook.
What are Rare Resources for Chow Tai Fook? Defining Rare in VRIO
In an industry that Chow Tai Fook operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Chow Tai Fook require rare resources to compete in the industry. If Chow Tai Fook don’t have rare resources that are required to succeed in the industry then Chow Tai Fook won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Chow Tai Fook competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Chow Tai Fook? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Chow Tai Fook 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. Chow Tai Fook 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 Chow Tai Fook
What is a Organization for Chow Tai Fook? Defining Organization in VRIO
Even if the Chow Tai Fook 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 Chow Tai Fook 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 |
---|---|---|---|---|---|
Track Record of Leadership Team at Chow Tai Fook | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Position among Retailers and Wholesalers – Chow Tai Fook retail strategy | Yes, Chow Tai Fook has strong relationship with retailers and wholesalers | Yes, Chow Tai Fook has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Financial Resources of Chow Tai Fook | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Chow Tai Fook has reasonably sound financial position | Chow Tai Fook has relatively sustainable Competitive Advantage |
Ability to Attract Talent in Various Local & Global Markets | Yes, Chow Tai Fook 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 Chow Tai Fook | To a large extent yes | Providing Strong Competitive Advantage |
Marketing Expertise within Chow Tai Fook | Yes, firms are competing based on differentiation in the industry | No, as most of the competitors also have good marketing departments and expertise | Pricing strategies of Chow Tai Fook are often matched by competitors | Yes, Chow Tai Fook is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Alignment of Activities with Chow Tai Fook 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 |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Opportunities for Brand Extensions for Chow Tai Fook 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 |
Successful Implementation of Digital Strategy at Chow Tai Fook | 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 |
Pricing Strategies of Chow Tai Fook | Yes, Chow Tai Fook has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Chow Tai Fook with a Temporary Competitive Advantage |
Global and Local Presence of Chow Tai Fook | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Chow Tai Fook but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Brand awareness of Chow Tai Fook products and services | Yes, the brand awareness of Chow Tai Fook products are high | Yes, Chow Tai Fook has one of the leading brand in the industry | No | Chow Tai Fook has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with Chow Tai Fook dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Access to Cheap Capital for Chow Tai Fook | Yes, as a leading player in the industry and current macro economic conditions, Chow Tai Fook has access to cheap capital | No | Can be imitated by the competitors of Chow Tai Fook | Not been totally exploited | Not significant in creating competitive advantage |
Chow Tai Fook 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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