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BorgWarner 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 BorgWarner to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for BorgWarner? Defining Valuable in VRIO
A resource or capability is considered valuable for BorgWarner , if it allows the
BorgWarner to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow BorgWarner to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for BorgWarner.
What are Rare Resources for BorgWarner? Defining Rare in VRIO
In an industry that BorgWarner operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. BorgWarner require rare resources to compete in the industry. If BorgWarner don’t have rare resources that are required to succeed in the industry then BorgWarner won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide BorgWarner competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for BorgWarner? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to BorgWarner 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. BorgWarner 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 BorgWarner
What is a Organization for BorgWarner? Defining Organization in VRIO
Even if the BorgWarner 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 BorgWarner 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, BorgWarner 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 BorgWarner | To a large extent yes | Providing Strong Competitive Advantage |
Brand awareness of BorgWarner products and services | Yes, the brand awareness of BorgWarner products are high | Yes, BorgWarner has one of the leading brand in the industry | No | BorgWarner has utilized its leading brand position in various segments | 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 BorgWarner operates in | No, none of the competitors so far has able to imitate this expertise | Yes, BorgWarner is successful at it | Providing Strong Competitive Advantage |
Alignment of Activities with BorgWarner 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 |
Pricing Strategies of BorgWarner | Yes, BorgWarner has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide BorgWarner with a Temporary Competitive Advantage |
Position among Retailers and Wholesalers – BorgWarner retail strategy | Yes, BorgWarner has strong relationship with retailers and wholesalers | Yes, BorgWarner has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Customer Community of BorgWarner | Yes, as customers are co-creating products | Yes, the BorgWarner has able to build a special relationship with its customers | It is very difficult for BorgWarner competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on BorgWarner customers community ecosystem | Providing Strong Competitive Advantage |
BorgWarner 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 BorgWarner | BorgWarner is leveraging the customer loyalty to good effect | Provide BorgWarner medium term competitive advantage |
Opportunities in the E-Commerce Space for BorgWarner - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and BorgWarner 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 |
Global and Local Presence of BorgWarner | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of BorgWarner but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Marketing Expertise within BorgWarner | 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 BorgWarner are often matched by competitors | Yes, BorgWarner is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Supply Chain Network Flexibility of BorgWarner | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by BorgWarner organizational structure and capabilities | Keeps the business running |
Product Portfolio and Synergy among Various Product Lines of BorgWarner | 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 Positioning of BorgWarner 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 |
BorgWarner 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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