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Eli Lilly 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 Eli Lilly to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Eli Lilly? Defining Valuable in VRIO
A resource or capability is considered valuable for Eli Lilly , if it allows the
Eli Lilly to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Eli Lilly to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Eli Lilly.
What are Rare Resources for Eli Lilly? Defining Rare in VRIO
In an industry that Eli Lilly operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Eli Lilly require rare resources to compete in the industry. If Eli Lilly don’t have rare resources that are required to succeed in the industry then Eli Lilly won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Eli Lilly competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Eli Lilly? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Eli Lilly 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. Eli Lilly 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 Eli Lilly
What is a Organization for Eli Lilly? Defining Organization in VRIO
Even if the Eli Lilly 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 Eli Lilly 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 |
---|---|---|---|---|---|
Product Portfolio and Synergy among Various Product Lines of Eli Lilly | 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 |
Track Record of Project Execution | Yes, especially in an industry where there are frequent cost overun | Yes, especially in the segment that Eli Lilly operates in | No, none of the competitors so far has able to imitate this expertise | Yes, Eli Lilly is successful at it | Providing Strong Competitive Advantage |
Opportunities for Brand Extensions for Eli Lilly 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 |
Position among Retailers and Wholesalers – Eli Lilly retail strategy | Yes, Eli Lilly has strong relationship with retailers and wholesalers | Yes, Eli Lilly has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Sales Force and Channel Management of Eli Lilly | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide Eli Lilly sustainable competitive advantage. Potential is certainly there. |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Eli Lilly in delivering lower costs | No | Can be imitated by competitors of Eli Lilly but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Brand awareness of Eli Lilly products and services | Yes, the brand awareness of Eli Lilly products are high | Yes, Eli Lilly has one of the leading brand in the industry | No | Eli Lilly has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Access to Cheap Capital for Eli Lilly | Yes, as a leading player in the industry and current macro economic conditions, Eli Lilly has access to cheap capital | No | Can be imitated by the competitors of Eli Lilly | Not been totally exploited | Not significant in creating competitive advantage |
Successful Implementation of Digital Strategy at Eli Lilly | 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 Eli Lilly | Yes, Eli Lilly has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Eli Lilly with a Temporary Competitive Advantage |
Track Record of Leadership Team at Eli Lilly | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Opportunities in the Adjacent Industries that Eli Lilly 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 |
Eli Lilly 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 Eli Lilly | Eli Lilly is leveraging the customer loyalty to good effect | Provide Eli Lilly medium term competitive advantage |
Global and Local Presence of Eli Lilly | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Eli Lilly but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Eli Lilly 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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