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Sompo Japan Nipponkoa 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 Sompo Japan Nipponkoa to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Sompo Japan Nipponkoa? Defining Valuable in VRIO
A resource or capability is considered valuable for Sompo Japan Nipponkoa , if it allows the
Sompo Japan Nipponkoa to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Sompo Japan Nipponkoa to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Sompo Japan Nipponkoa.
What are Rare Resources for Sompo Japan Nipponkoa? Defining Rare in VRIO
In an industry that Sompo Japan Nipponkoa operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Sompo Japan Nipponkoa require rare resources to compete in the industry. If Sompo Japan Nipponkoa don’t have rare resources that are required to succeed in the industry then Sompo Japan Nipponkoa won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Sompo Japan Nipponkoa competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Sompo Japan Nipponkoa? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Sompo Japan Nipponkoa 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. Sompo Japan Nipponkoa 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 Sompo Japan Nipponkoa
What is a Organization for Sompo Japan Nipponkoa? Defining Organization in VRIO
Even if the Sompo Japan Nipponkoa 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 Sompo Japan Nipponkoa 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 |
---|---|---|---|---|---|
Supply Chain Network Flexibility of Sompo Japan Nipponkoa | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Sompo Japan Nipponkoa organizational structure and capabilities | Keeps the business running |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for Sompo Japan Nipponkoa to thwart competition | Yes, IPR and other rights are rare and competition of Sompo Japan Nipponkoa 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 |
Opportunities in the Adjacent Industries that Sompo Japan Nipponkoa 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 |
Ability to Attract Talent in Various Local & Global Markets | Yes, Sompo Japan Nipponkoa 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 Sompo Japan Nipponkoa | To a large extent yes | Providing Strong Competitive Advantage |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Sompo Japan Nipponkoa in delivering lower costs | No | Can be imitated by competitors of Sompo Japan Nipponkoa but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with Sompo Japan Nipponkoa dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Marketing Expertise within Sompo Japan Nipponkoa | 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 Sompo Japan Nipponkoa are often matched by competitors | Yes, Sompo Japan Nipponkoa is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Global and Local Presence of Sompo Japan Nipponkoa | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Sompo Japan Nipponkoa but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Sales Force and Channel Management of Sompo Japan Nipponkoa | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide Sompo Japan Nipponkoa 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 |
Product Portfolio and Synergy among Various Product Lines of Sompo Japan Nipponkoa | 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 Sompo Japan Nipponkoa | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Sompo Japan Nipponkoa 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 Sompo Japan Nipponkoa | Sompo Japan Nipponkoa is leveraging the customer loyalty to good effect | Provide Sompo Japan Nipponkoa medium term competitive advantage |
Position among Retailers and Wholesalers – Sompo Japan Nipponkoa retail strategy | Yes, Sompo Japan Nipponkoa has strong relationship with retailers and wholesalers | Yes, Sompo Japan Nipponkoa has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Sompo Japan Nipponkoa 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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