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Altria Group 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 Altria Group to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Altria Group? Defining Valuable in VRIO
A resource or capability is considered valuable for Altria Group , if it allows the
Altria Group to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Altria Group to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Altria Group.
What are Rare Resources for Altria Group? Defining Rare in VRIO
In an industry that Altria Group operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Altria Group require rare resources to compete in the industry. If Altria Group don’t have rare resources that are required to succeed in the industry then Altria Group won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Altria Group competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Altria Group? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Altria Group 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. Altria Group 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 Altria Group
What is a Organization for Altria Group? Defining Organization in VRIO
Even if the Altria Group 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 Altria Group 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 Altria Group | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Altria Group organizational structure and capabilities | Keeps the business running |
Track Record of Project Execution | Yes, especially in an industry where there are frequent cost overun | Yes, especially in the segment that Altria Group operates in | No, none of the competitors so far has able to imitate this expertise | Yes, Altria Group is successful at it | Providing Strong Competitive Advantage |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Altria Group in delivering lower costs | No | Can be imitated by competitors of Altria Group but it is difficult | Yes | Medium to Long Term Competitive Advantage |
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 Altria Group | 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 |
Alignment of Activities with Altria Group 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 |
Successful Implementation of Digital Strategy at Altria Group | 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 |
Position among Retailers and Wholesalers – Altria Group retail strategy | Yes, Altria Group has strong relationship with retailers and wholesalers | Yes, Altria Group has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of Altria Group | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Opportunities in the E-Commerce Space for Altria Group - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Altria Group can exploit the emerging opportunities | No, most of the competitors are investing in IT to enter the space | The AI and inhouse analytics can be difficult to imitate | It is just the start for the organization | In the long run it can provide sustainable competitive advantage |
Marketing Expertise within Altria Group | 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 Altria Group are often matched by competitors | Yes, Altria Group is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Access to Cheap Capital for Altria Group | Yes, as a leading player in the industry and current macro economic conditions, Altria Group has access to cheap capital | No | Can be imitated by the competitors of Altria Group | Not been totally exploited | Not significant in creating competitive advantage |
Altria Group 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 Altria Group | Altria Group is leveraging the customer loyalty to good effect | Provide Altria Group medium term competitive advantage |
Financial Resources of Altria Group | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Altria Group has reasonably sound financial position | Altria Group has relatively sustainable Competitive Advantage |
Altria Group 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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