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Loews 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 Loews to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Loews? Defining Valuable in VRIO
A resource or capability is considered valuable for Loews , if it allows the
Loews to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Loews to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Loews.
What are Rare Resources for Loews? Defining Rare in VRIO
In an industry that Loews operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Loews require rare resources to compete in the industry. If Loews don’t have rare resources that are required to succeed in the industry then Loews won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Loews competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Loews? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Loews 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. Loews 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 Loews
What is a Organization for Loews? Defining Organization in VRIO
Even if the Loews 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 Loews 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 |
---|---|---|---|---|---|
Global and Local Presence of Loews | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Loews but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Ability to Attract Talent in Various Local & Global Markets | Yes, Loews 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 Loews | To a large extent yes | Providing Strong Competitive Advantage |
Pricing Strategies of Loews | Yes, Loews has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Loews with a Temporary Competitive Advantage |
Customer Community of Loews | Yes, as customers are co-creating products | Yes, the Loews has able to build a special relationship with its customers | It is very difficult for Loews competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Loews customers community ecosystem | Providing Strong Competitive Advantage |
Opportunities for Brand Extensions for Loews 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 |
Marketing Expertise within Loews | 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 Loews are often matched by competitors | Yes, Loews is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Loews 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 Loews | Loews is leveraging the customer loyalty to good effect | Provide Loews medium term competitive advantage |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for Loews to thwart competition | Yes, IPR and other rights are rare and competition of Loews 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 |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of Loews | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Track Record of Project Execution | Yes, especially in an industry where there are frequent cost overun | Yes, especially in the segment that Loews operates in | No, none of the competitors so far has able to imitate this expertise | Yes, Loews is successful at it | Providing Strong Competitive Advantage |
Supply Chain Network Flexibility of Loews | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Loews organizational structure and capabilities | Keeps the business running |
Opportunities in the Adjacent Industries that Loews 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 |
Alignment of Activities with Loews 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 Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with Loews dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Loews 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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