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

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What is a Valuable Resource for IBM? Defining Valuable in VRIO

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

What are Rare Resources for IBM? Defining Rare in VRIO

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

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

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

What is a Organization for IBM? Defining Organization in VRIO

Even if the IBM 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 IBM 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, IBM 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 IBM	To a large extent yes	Providing Strong Competitive Advantage
Product Portfolio and Synergy among Various Product Lines of IBM	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
Brand awareness of IBM products and services	Yes, the brand awareness of IBM products are high	Yes, IBM has one of the leading brand in the industry	No	IBM has utilized its leading brand position in various segments	Sustainable Competitive Advantage
Financial Resources of IBM	Yes	No	Financial instruments and market liquidity are available to all the nearest competitors	IBM has reasonably sound financial position	IBM has relatively sustainable Competitive Advantage
Pricing Strategies of IBM	Yes, IBM has sound pricing strategies	No	Pricing strategies are regularly imitated in the industry	Yes, firm has a pricing analytics engine	It can only provide IBM with a Temporary Competitive Advantage
Marketing Expertise within IBM	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 IBM are often matched by competitors	Yes, IBM is leveraging both its inhouse marketing department and external expertise	Temporary Competitive Advantage
Sales Force and Channel Management of IBM	Yes	No	Can be imitated by competitors	Still there is lot of potential to utilize the excellent sales force	Can provide IBM sustainable competitive advantage. Potential is certainly there.
Talent to Manage Regulatory and Legal Obligations	Yes	No	Can be imitated by competitors	Yes	Not critical factor
Position among Retailers and Wholesalers – IBM retail strategy	Yes, IBM has strong relationship with retailers and wholesalers	Yes, IBM has dedicated channel partners	Difficult to imitate though not impossible	Yes, over the years company has used it successfully	Sustainable Competitive Advantage
Access to Critical Raw Material for Successful Execution	Yes	Yes, as other competitors have to come to terms with IBM dominant market position	Can be imitated by competitors	Yes	Providing Sustainable Competitive Advantage
IBM 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 IBM	IBM is leveraging the customer loyalty to good effect	Provide IBM medium term competitive advantage
Supply Chain Network Flexibility of IBM	Yes	Yes	Near competitors also have flexible supply chain and share some of the suppliers	Fully utilized by IBM organizational structure and capabilities	Keeps the business running
Alignment of Activities with IBM 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
Access to Cheap Capital for IBM	Yes, as a leading player in the industry and current macro economic conditions, IBM has access to cheap capital	No	Can be imitated by the competitors of IBM	Not been totally exploited	Not significant in creating competitive advantage

IBM 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