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Lear 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 Lear to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Lear? Defining Valuable in VRIO
A resource or capability is considered valuable for Lear , if it allows the
Lear to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Lear to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Lear.
What are Rare Resources for Lear? Defining Rare in VRIO
In an industry that Lear operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Lear require rare resources to compete in the industry. If Lear don’t have rare resources that are required to succeed in the industry then Lear won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Lear competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Lear? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Lear 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. Lear 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 Lear
What is a Organization for Lear? Defining Organization in VRIO
Even if the Lear 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 Lear 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 |
---|---|---|---|---|---|
Access to Cheap Capital for Lear | Yes, as a leading player in the industry and current macro economic conditions, Lear has access to cheap capital | No | Can be imitated by the competitors of Lear | Not been totally exploited | Not significant in creating competitive advantage |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Global and Local Presence of Lear | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Lear but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Financial Resources of Lear | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Lear has reasonably sound financial position | Lear has relatively sustainable Competitive Advantage |
Opportunities in the E-Commerce Space for Lear - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Lear 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 |
Alignment of Activities with Lear 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 |
Ability to Attract Talent in Various Local & Global Markets | Yes, Lear 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 Lear | To a large extent yes | Providing Strong Competitive Advantage |
Brand Positioning of Lear in Comparison to the Competitors | Yes | No | Can be imitated by competitors but it will require big marketing budget | Yes, the firm has positioned its brands based on consumer behavior | Temporary Competitive Advantage |
Supply Chain Network Flexibility of Lear | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Lear organizational structure and capabilities | Keeps the business running |
Customer Community of Lear | Yes, as customers are co-creating products | Yes, the Lear has able to build a special relationship with its customers | It is very difficult for Lear competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Lear customers community ecosystem | Providing Strong Competitive Advantage |
Track Record of Leadership Team at Lear | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Marketing Expertise within Lear | 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 Lear are often matched by competitors | Yes, Lear is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Brand awareness of Lear products and services | Yes, the brand awareness of Lear products are high | Yes, Lear has one of the leading brand in the industry | No | Lear has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Successful Implementation of Digital Strategy at Lear | 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 |
Lear 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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