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Fluor 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 Fluor to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Fluor? Defining Valuable in VRIO
A resource or capability is considered valuable for Fluor , if it allows the
Fluor to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Fluor to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Fluor.
What are Rare Resources for Fluor? Defining Rare in VRIO
In an industry that Fluor operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Fluor require rare resources to compete in the industry. If Fluor don’t have rare resources that are required to succeed in the industry then Fluor won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Fluor competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Fluor? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Fluor 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. Fluor 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 Fluor
What is a Organization for Fluor? Defining Organization in VRIO
Even if the Fluor 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 Fluor 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 |
---|---|---|---|---|---|
Ability to Attract Talent in Various Local & Global Markets | Yes, Fluor 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 Fluor | To a large extent yes | Providing Strong Competitive Advantage |
Opportunities for Brand Extensions for Fluor 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 |
Opportunities in the Adjacent Industries that Fluor 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 |
Fluor 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 Fluor | Fluor is leveraging the customer loyalty to good effect | Provide Fluor medium term competitive advantage |
Financial Resources of Fluor | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Fluor has reasonably sound financial position | Fluor has relatively sustainable Competitive Advantage |
Brand Positioning of Fluor 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 |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of Fluor | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Customer Community of Fluor | Yes, as customers are co-creating products | Yes, the Fluor has able to build a special relationship with its customers | It is very difficult for Fluor competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Fluor customers community ecosystem | Providing Strong Competitive Advantage |
Successful Implementation of Digital Strategy at Fluor | 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 |
Alignment of Activities with Fluor 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 |
Access to Cheap Capital for Fluor | Yes, as a leading player in the industry and current macro economic conditions, Fluor has access to cheap capital | No | Can be imitated by the competitors of Fluor | Not been totally exploited | Not significant in creating competitive advantage |
Sales Force and Channel Management of Fluor | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide Fluor sustainable competitive advantage. Potential is certainly there. |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for Fluor to thwart competition | Yes, IPR and other rights are rare and competition of Fluor 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 |
Global and Local Presence of Fluor | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Fluor but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Fluor 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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