Illinois Tool Works 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 Illinois Tool Works to do better resource allocation and build a defensible value and supply chain.

Order a Illinois Tool Works VRIO / VRIN Analysis now

What is a Valuable Resource for Illinois Tool Works? Defining Valuable in VRIO

A resource or capability is considered valuable for Illinois Tool Works , if it allows the Illinois Tool Works to exploit opportunities or negate threats emerging out of both the micro business environment and the macro environment. If a resource does not allow Illinois Tool Works to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Illinois Tool Works.

What are Rare Resources for Illinois Tool Works? Defining Rare in VRIO

In an industry that Illinois Tool Works operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Illinois Tool Works require rare resources to compete in the industry. If Illinois Tool Works don’t have rare resources that are required to succeed in the industry then Illinois Tool Works won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Illinois Tool Works competitive advantage against players that don’t have those rare resources. HBR Case Study Solution

What is a Inimitable (Difficult to Immitate) Resource for Illinois Tool Works? Defining Inimitable in VRIO

A valuable and rare resource can provide a competitive advantage to Illinois Tool Works 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. Illinois Tool Works 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 Illinois Tool Works

What is a Organization for Illinois Tool Works? Defining Organization in VRIO

Even if the Illinois Tool Works 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 Illinois Tool Works 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
Brand awareness of Illinois Tool Works products and services	Yes, the brand awareness of Illinois Tool Works products are high	Yes, Illinois Tool Works has one of the leading brand in the industry	No	Illinois Tool Works has utilized its leading brand position in various segments	Sustainable Competitive Advantage
Supply Chain Network Flexibility of Illinois Tool Works	Yes	Yes	Near competitors also have flexible supply chain and share some of the suppliers	Fully utilized by Illinois Tool Works organizational structure and capabilities	Keeps the business running
Opportunities in the E-Commerce Space for Illinois Tool Works - using Present IT Capabilities	Yes, the e-commerce space is rapidly growing and Illinois Tool Works 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
Track Record of Project Execution	Yes, especially in an industry where there are frequent cost overun	Yes, especially in the segment that Illinois Tool Works operates in	No, none of the competitors so far has able to imitate this expertise	Yes, Illinois Tool Works is successful at it	Providing Strong Competitive Advantage
Talent to Manage Regulatory and Legal Obligations	Yes	No	Can be imitated by competitors	Yes	Not critical factor
Distribution and Logistics Costs Competitiveness	Yes, as it helps Illinois Tool Works in delivering lower costs	No	Can be imitated by competitors of Illinois Tool Works but it is difficult	Yes	Medium to Long Term Competitive Advantage
Customer Community of Illinois Tool Works	Yes, as customers are co-creating products	Yes, the Illinois Tool Works has able to build a special relationship with its customers	It is very difficult for Illinois Tool Works competitors to imitate the culture and community dedication	Going by the data, there is still a lot of upside in building on Illinois Tool Works customers community ecosystem	Providing Strong Competitive Advantage
Product Portfolio and Synergy among Various Product Lines of Illinois Tool Works	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
Opportunities in the Adjacent Industries that Illinois Tool Works 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
Vision of the Leadership for Next Set of Challenges	Yes	No	Can't be imitated by competitors of Illinois Tool Works	Not based on information provided in the case	Can Lead to Strong Competitive Advantage
Ability to Attract Talent in Various Local & Global Markets	Yes, Illinois Tool Works 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 Illinois Tool Works	To a large extent yes	Providing Strong Competitive Advantage
Alignment of Activities with Illinois Tool Works 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
Financial Resources of Illinois Tool Works	Yes	No	Financial instruments and market liquidity are available to all the nearest competitors	Illinois Tool Works has reasonably sound financial position	Illinois Tool Works has relatively sustainable Competitive Advantage
Pricing Strategies of Illinois Tool Works	Yes, Illinois Tool Works has sound pricing strategies	No	Pricing strategies are regularly imitated in the industry	Yes, firm has a pricing analytics engine	It can only provide Illinois Tool Works with a Temporary Competitive Advantage

Illinois Tool Works 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