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Air Products & Chemicals 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 Air Products & Chemicals to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Air Products & Chemicals? Defining Valuable in VRIO
A resource or capability is considered valuable for Air Products & Chemicals , if it allows the
Air Products & Chemicals to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Air Products & Chemicals to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Air Products & Chemicals.
What are Rare Resources for Air Products & Chemicals? Defining Rare in VRIO
In an industry that Air Products & Chemicals operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Air Products & Chemicals require rare resources to compete in the industry. If Air Products & Chemicals don’t have rare resources that are required to succeed in the industry then Air Products & Chemicals won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Air Products & Chemicals competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Air Products & Chemicals? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Air Products & Chemicals 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. Air Products & Chemicals 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 Air Products & Chemicals
What is a Organization for Air Products & Chemicals? Defining Organization in VRIO
Even if the Air Products & Chemicals 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 Air Products & Chemicals 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 |
---|---|---|---|---|---|
Customer Community of Air Products & Chemicals | Yes, as customers are co-creating products | Yes, the Air Products & Chemicals has able to build a special relationship with its customers | It is very difficult for Air Products & Chemicals competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Air Products & Chemicals customers community ecosystem | Providing Strong Competitive Advantage |
Successful Implementation of Digital Strategy at Air Products & Chemicals | 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 |
Access to Cheap Capital for Air Products & Chemicals | Yes, as a leading player in the industry and current macro economic conditions, Air Products & Chemicals has access to cheap capital | No | Can be imitated by the competitors of Air Products & Chemicals | Not been totally exploited | Not significant in creating competitive advantage |
Ability to Attract Talent in Various Local & Global Markets | Yes, Air Products & Chemicals 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 Air Products & Chemicals | To a large extent yes | Providing Strong Competitive Advantage |
Position among Retailers and Wholesalers – Air Products & Chemicals retail strategy | Yes, Air Products & Chemicals has strong relationship with retailers and wholesalers | Yes, Air Products & Chemicals 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 Air Products & Chemicals 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 |
Brand awareness of Air Products & Chemicals products and services | Yes, the brand awareness of Air Products & Chemicals products are high | Yes, Air Products & Chemicals has one of the leading brand in the industry | No | Air Products & Chemicals has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Track Record of Leadership Team at Air Products & Chemicals | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Alignment of Activities with Air Products & Chemicals 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 |
Track Record of Project Execution | Yes, especially in an industry where there are frequent cost overun | Yes, especially in the segment that Air Products & Chemicals operates in | No, none of the competitors so far has able to imitate this expertise | Yes, Air Products & Chemicals 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 Air Products & Chemicals | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with Air Products & Chemicals dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Global and Local Presence of Air Products & Chemicals | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Air Products & Chemicals but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Opportunities in the E-Commerce Space for Air Products & Chemicals - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Air Products & Chemicals 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 |
Air Products & Chemicals 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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