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Consolidated Edison 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 Consolidated Edison to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Consolidated Edison? Defining Valuable in VRIO
A resource or capability is considered valuable for Consolidated Edison , if it allows the
Consolidated Edison to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Consolidated Edison to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Consolidated Edison.
What are Rare Resources for Consolidated Edison? Defining Rare in VRIO
In an industry that Consolidated Edison operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Consolidated Edison require rare resources to compete in the industry. If Consolidated Edison don’t have rare resources that are required to succeed in the industry then Consolidated Edison won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Consolidated Edison competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Consolidated Edison? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Consolidated Edison 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. Consolidated Edison 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 Consolidated Edison
What is a Organization for Consolidated Edison? Defining Organization in VRIO
Even if the Consolidated Edison 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 Consolidated Edison 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 Consolidated Edison | Yes, as a leading player in the industry and current macro economic conditions, Consolidated Edison has access to cheap capital | No | Can be imitated by the competitors of Consolidated Edison | Not been totally exploited | Not significant in creating competitive advantage |
Successful Implementation of Digital Strategy at Consolidated Edison | 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 |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Consolidated Edison in delivering lower costs | No | Can be imitated by competitors of Consolidated Edison but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Track Record of Project Execution | Yes, especially in an industry where there are frequent cost overun | Yes, especially in the segment that Consolidated Edison operates in | No, none of the competitors so far has able to imitate this expertise | Yes, Consolidated Edison is successful at it | Providing Strong Competitive Advantage |
Global and Local Presence of Consolidated Edison | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Consolidated Edison but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Brand awareness of Consolidated Edison products and services | Yes, the brand awareness of Consolidated Edison products are high | Yes, Consolidated Edison has one of the leading brand in the industry | No | Consolidated Edison has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Brand Positioning of Consolidated Edison 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 |
Opportunities in the E-Commerce Space for Consolidated Edison - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Consolidated Edison 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 |
Marketing Expertise within Consolidated Edison | 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 Consolidated Edison are often matched by competitors | Yes, Consolidated Edison is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Consolidated Edison 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 Consolidated Edison | Consolidated Edison is leveraging the customer loyalty to good effect | Provide Consolidated Edison medium term competitive advantage |
Customer Community of Consolidated Edison | Yes, as customers are co-creating products | Yes, the Consolidated Edison has able to build a special relationship with its customers | It is very difficult for Consolidated Edison competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Consolidated Edison customers community ecosystem | Providing Strong Competitive Advantage |
Supply Chain Network Flexibility of Consolidated Edison | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Consolidated Edison organizational structure and capabilities | Keeps the business running |
Alignment of Activities with Consolidated Edison 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 |
Sales Force and Channel Management of Consolidated Edison | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide Consolidated Edison sustainable competitive advantage. Potential is certainly there. |
Consolidated Edison 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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