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Southern 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 Southern to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Southern? Defining Valuable in VRIO
A resource or capability is considered valuable for Southern , if it allows the
Southern to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Southern to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Southern.
What are Rare Resources for Southern? Defining Rare in VRIO
In an industry that Southern operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Southern require rare resources to compete in the industry. If Southern don’t have rare resources that are required to succeed in the industry then Southern won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Southern competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Southern? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Southern 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. Southern 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 Southern
What is a Organization for Southern? Defining Organization in VRIO
Even if the Southern 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 Southern 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 |
---|---|---|---|---|---|
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for Southern to thwart competition | Yes, IPR and other rights are rare and competition of Southern 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 |
Pricing Strategies of Southern | Yes, Southern has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Southern with a Temporary Competitive Advantage |
Southern 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 Southern | Southern is leveraging the customer loyalty to good effect | Provide Southern medium term competitive advantage |
Global and Local Presence of Southern | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Southern but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Southern in delivering lower costs | No | Can be imitated by competitors of Southern but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Alignment of Activities with Southern 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 |
Supply Chain Network Flexibility of Southern | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Southern organizational structure and capabilities | Keeps the business running |
Opportunities in the E-Commerce Space for Southern - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Southern 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 |
Brand awareness of Southern products and services | Yes, the brand awareness of Southern products are high | Yes, Southern has one of the leading brand in the industry | No | Southern has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Successful Implementation of Digital Strategy at Southern | 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 |
Opportunities in the Adjacent Industries that Southern 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 |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Track Record of Project Execution | Yes, especially in an industry where there are frequent cost overun | Yes, especially in the segment that Southern operates in | No, none of the competitors so far has able to imitate this expertise | Yes, Southern is successful at it | Providing Strong Competitive Advantage |
Ability to Attract Talent in Various Local & Global Markets | Yes, Southern 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 Southern | To a large extent yes | Providing Strong Competitive Advantage |
Southern 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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