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Huntsman 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 Huntsman to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Huntsman? Defining Valuable in VRIO
A resource or capability is considered valuable for Huntsman , if it allows the
Huntsman to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Huntsman to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Huntsman.
What are Rare Resources for Huntsman? Defining Rare in VRIO
In an industry that Huntsman operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Huntsman require rare resources to compete in the industry. If Huntsman don’t have rare resources that are required to succeed in the industry then Huntsman won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Huntsman competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Huntsman? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Huntsman 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. Huntsman 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 Huntsman
What is a Organization for Huntsman? Defining Organization in VRIO
Even if the Huntsman 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 Huntsman 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, Huntsman 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 Huntsman | To a large extent yes | Providing 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 Huntsman operates in | No, none of the competitors so far has able to imitate this expertise | Yes, Huntsman is successful at it | Providing Strong Competitive Advantage |
Opportunities for Brand Extensions for Huntsman 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 |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of Huntsman | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Opportunities in the E-Commerce Space for Huntsman - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Huntsman 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 |
Sales Force and Channel Management of Huntsman | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide Huntsman sustainable competitive advantage. Potential is certainly there. |
Position among Retailers and Wholesalers – Huntsman retail strategy | Yes, Huntsman has strong relationship with retailers and wholesalers | Yes, Huntsman has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Opportunities in the Adjacent Industries that Huntsman 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 |
Successful Implementation of Digital Strategy at Huntsman | 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 |
Brand Positioning of Huntsman 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 |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with Huntsman dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Product Portfolio and Synergy among Various Product Lines of Huntsman | 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 |
Customer Community of Huntsman | Yes, as customers are co-creating products | Yes, the Huntsman has able to build a special relationship with its customers | It is very difficult for Huntsman competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Huntsman customers community ecosystem | Providing Strong Competitive Advantage |
Huntsman 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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