Baxter International 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 Baxter International to do better resource allocation and build a defensible value and supply chain.

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What is a Valuable Resource for Baxter International? Defining Valuable in VRIO

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

What are Rare Resources for Baxter International? Defining Rare in VRIO

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

What is a Inimitable (Difficult to Immitate) Resource for Baxter International? Defining Inimitable in VRIO

A valuable and rare resource can provide a competitive advantage to Baxter International 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. Baxter International 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 Baxter International

What is a Organization for Baxter International? Defining Organization in VRIO

Even if the Baxter International 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 Baxter International 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
Baxter International 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 Baxter International	Baxter International is leveraging the customer loyalty to good effect	Provide Baxter International medium term competitive advantage
Successful Implementation of Digital Strategy at Baxter International	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
Sales Force and Channel Management of Baxter International	Yes	No	Can be imitated by competitors	Still there is lot of potential to utilize the excellent sales force	Can provide Baxter International sustainable competitive advantage. Potential is certainly there.
Supply Chain Network Flexibility of Baxter International	Yes	Yes	Near competitors also have flexible supply chain and share some of the suppliers	Fully utilized by Baxter International organizational structure and capabilities	Keeps the business running
Ability to Attract Talent in Various Local & Global Markets	Yes, Baxter International 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 Baxter International	To a large extent yes	Providing Strong Competitive Advantage
Opportunities in the Adjacent Industries that Baxter International 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
Distribution and Logistics Costs Competitiveness	Yes, as it helps Baxter International in delivering lower costs	No	Can be imitated by competitors of Baxter International but it is difficult	Yes	Medium to Long Term Competitive Advantage
Brand Positioning of Baxter International 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
Customer Community of Baxter International	Yes, as customers are co-creating products	Yes, the Baxter International has able to build a special relationship with its customers	It is very difficult for Baxter International competitors to imitate the culture and community dedication	Going by the data, there is still a lot of upside in building on Baxter International customers community ecosystem	Providing Strong Competitive Advantage
Access to Critical Raw Material for Successful Execution	Yes	Yes, as other competitors have to come to terms with Baxter International dominant market position	Can be imitated by competitors	Yes	Providing 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 Baxter International operates in	No, none of the competitors so far has able to imitate this expertise	Yes, Baxter International is successful at it	Providing Strong Competitive Advantage
Vision of the Leadership for Next Set of Challenges	Yes	No	Can't be imitated by competitors of Baxter International	Not based on information provided in the case	Can Lead to Strong Competitive Advantage
Opportunities for Brand Extensions for Baxter International 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 Baxter International	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 Baxter International are often matched by competitors	Yes, Baxter International is leveraging both its inhouse marketing department and external expertise	Temporary Competitive Advantage

Baxter International 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