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XPO Logistics 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 XPO Logistics to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for XPO Logistics? Defining Valuable in VRIO
A resource or capability is considered valuable for XPO Logistics , if it allows the
XPO Logistics to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow XPO Logistics to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for XPO Logistics.
What are Rare Resources for XPO Logistics? Defining Rare in VRIO
In an industry that XPO Logistics operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. XPO Logistics require rare resources to compete in the industry. If XPO Logistics don’t have rare resources that are required to succeed in the industry then XPO Logistics won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide XPO Logistics competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for XPO Logistics? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to XPO Logistics 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. XPO Logistics 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 XPO Logistics
What is a Organization for XPO Logistics? Defining Organization in VRIO
Even if the XPO Logistics 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 XPO Logistics 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 |
---|---|---|---|---|---|
Global and Local Presence of XPO Logistics | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of XPO Logistics but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Access to Cheap Capital for XPO Logistics | Yes, as a leading player in the industry and current macro economic conditions, XPO Logistics has access to cheap capital | No | Can be imitated by the competitors of XPO Logistics | Not been totally exploited | Not significant in creating competitive advantage |
Position among Retailers and Wholesalers – XPO Logistics retail strategy | Yes, XPO Logistics has strong relationship with retailers and wholesalers | Yes, XPO Logistics has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Pricing Strategies of XPO Logistics | Yes, XPO Logistics has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide XPO Logistics with a Temporary Competitive Advantage |
Alignment of Activities with XPO Logistics 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 Leadership Team at XPO Logistics | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Customer Community of XPO Logistics | Yes, as customers are co-creating products | Yes, the XPO Logistics has able to build a special relationship with its customers | It is very difficult for XPO Logistics competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on XPO Logistics customers community ecosystem | Providing Strong Competitive Advantage |
Financial Resources of XPO Logistics | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | XPO Logistics has reasonably sound financial position | XPO Logistics has relatively sustainable Competitive Advantage |
Opportunities in the Adjacent Industries that XPO Logistics 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 |
XPO Logistics 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 XPO Logistics | XPO Logistics is leveraging the customer loyalty to good effect | Provide XPO Logistics medium term competitive advantage |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with XPO Logistics dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Supply Chain Network Flexibility of XPO Logistics | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by XPO Logistics organizational structure and capabilities | Keeps the business running |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of XPO Logistics | Not based on information provided in the case | Can Lead to 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 XPO Logistics operates in | No, none of the competitors so far has able to imitate this expertise | Yes, XPO Logistics is successful at it | Providing Strong Competitive Advantage |
XPO Logistics 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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