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Royal Mail 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 Royal Mail to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Royal Mail? Defining Valuable in VRIO
A resource or capability is considered valuable for Royal Mail , if it allows the
Royal Mail to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Royal Mail to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Royal Mail.
What are Rare Resources for Royal Mail? Defining Rare in VRIO
In an industry that Royal Mail operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Royal Mail require rare resources to compete in the industry. If Royal Mail don’t have rare resources that are required to succeed in the industry then Royal Mail won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Royal Mail competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Royal Mail? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Royal Mail 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. Royal Mail 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 Royal Mail
What is a Organization for Royal Mail? Defining Organization in VRIO
Even if the Royal Mail 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 Royal Mail 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 |
---|---|---|---|---|---|
Financial Resources of Royal Mail | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Royal Mail has reasonably sound financial position | Royal Mail has relatively sustainable Competitive Advantage |
Track Record of Project Execution | Yes, especially in an industry where there are frequent cost overun | Yes, especially in the segment that Royal Mail operates in | No, none of the competitors so far has able to imitate this expertise | Yes, Royal Mail is successful at it | Providing Strong Competitive Advantage |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for Royal Mail to thwart competition | Yes, IPR and other rights are rare and competition of Royal Mail 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 |
Royal Mail 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 Royal Mail | Royal Mail is leveraging the customer loyalty to good effect | Provide Royal Mail medium term competitive advantage |
Marketing Expertise within Royal Mail | 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 Royal Mail are often matched by competitors | Yes, Royal Mail is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Successful Implementation of Digital Strategy at Royal Mail | 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 |
Opportunities in the Adjacent Industries that Royal Mail 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 |
Opportunities for Brand Extensions for Royal Mail 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 |
Product Portfolio and Synergy among Various Product Lines of Royal Mail | 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 |
Position among Retailers and Wholesalers – Royal Mail retail strategy | Yes, Royal Mail has strong relationship with retailers and wholesalers | Yes, Royal Mail has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Global and Local Presence of Royal Mail | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Royal Mail but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with Royal Mail dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Access to Cheap Capital for Royal Mail | Yes, as a leading player in the industry and current macro economic conditions, Royal Mail has access to cheap capital | No | Can be imitated by the competitors of Royal Mail | Not been totally exploited | Not significant in creating competitive advantage |
Sales Force and Channel Management of Royal Mail | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide Royal Mail sustainable competitive advantage. Potential is certainly there. |
Royal Mail 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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