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China Eastern Airlines 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 China Eastern Airlines to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for China Eastern Airlines? Defining Valuable in VRIO
A resource or capability is considered valuable for China Eastern Airlines , if it allows the
China Eastern Airlines to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow China Eastern Airlines to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for China Eastern Airlines.
What are Rare Resources for China Eastern Airlines? Defining Rare in VRIO
In an industry that China Eastern Airlines operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. China Eastern Airlines require rare resources to compete in the industry. If China Eastern Airlines don’t have rare resources that are required to succeed in the industry then China Eastern Airlines won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide China Eastern Airlines competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for China Eastern Airlines? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to China Eastern Airlines 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. China Eastern Airlines 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 China Eastern Airlines
What is a Organization for China Eastern Airlines? Defining Organization in VRIO
Even if the China Eastern Airlines 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 China Eastern Airlines 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 China Eastern Airlines | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by China Eastern Airlines organizational structure and capabilities | Keeps the business running |
Position among Retailers and Wholesalers – China Eastern Airlines retail strategy | Yes, China Eastern Airlines has strong relationship with retailers and wholesalers | Yes, China Eastern Airlines 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 China Eastern Airlines | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | China Eastern Airlines has reasonably sound financial position | China Eastern Airlines has relatively sustainable Competitive Advantage |
Customer Community of China Eastern Airlines | Yes, as customers are co-creating products | Yes, the China Eastern Airlines has able to build a special relationship with its customers | It is very difficult for China Eastern Airlines competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on China Eastern Airlines customers community ecosystem | Providing Strong Competitive Advantage |
Track Record of Leadership Team at China Eastern Airlines | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Ability to Attract Talent in Various Local & Global Markets | Yes, China Eastern Airlines 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 China Eastern Airlines | To a large extent yes | Providing Strong Competitive Advantage |
Successful Implementation of Digital Strategy at China Eastern Airlines | 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 |
Brand awareness of China Eastern Airlines products and services | Yes, the brand awareness of China Eastern Airlines products are high | Yes, China Eastern Airlines has one of the leading brand in the industry | No | China Eastern Airlines has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Marketing Expertise within China Eastern Airlines | 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 China Eastern Airlines are often matched by competitors | Yes, China Eastern Airlines is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Pricing Strategies of China Eastern Airlines | Yes, China Eastern Airlines has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide China Eastern Airlines with a Temporary Competitive Advantage |
Distribution and Logistics Costs Competitiveness | Yes, as it helps China Eastern Airlines in delivering lower costs | No | Can be imitated by competitors of China Eastern Airlines but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for China Eastern Airlines to thwart competition | Yes, IPR and other rights are rare and competition of China Eastern Airlines 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 |
China Eastern Airlines 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 China Eastern Airlines | China Eastern Airlines is leveraging the customer loyalty to good effect | Provide China Eastern Airlines medium term competitive advantage |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with China Eastern Airlines dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
China Eastern Airlines 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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