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salesforce.com 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 salesforce.com to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for salesforce.com? Defining Valuable in VRIO
A resource or capability is considered valuable for salesforce.com , if it allows the
salesforce.com to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow salesforce.com to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for salesforce.com.
What are Rare Resources for salesforce.com? Defining Rare in VRIO
In an industry that salesforce.com operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. salesforce.com require rare resources to compete in the industry. If salesforce.com don’t have rare resources that are required to succeed in the industry then salesforce.com won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide salesforce.com competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for salesforce.com? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to salesforce.com 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. salesforce.com 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 salesforce.com
What is a Organization for salesforce.com? Defining Organization in VRIO
Even if the salesforce.com 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 salesforce.com 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 |
---|---|---|---|---|---|
Alignment of Activities with salesforce.com 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 salesforce.com | Yes, salesforce.com has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide salesforce.com with a Temporary Competitive Advantage |
Successful Implementation of Digital Strategy at salesforce.com | 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 |
Opportunities in the Adjacent Industries that salesforce.com 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 |
Marketing Expertise within salesforce.com | 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 salesforce.com are often matched by competitors | Yes, salesforce.com is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Customer Community of salesforce.com | Yes, as customers are co-creating products | Yes, the salesforce.com has able to build a special relationship with its customers | It is very difficult for salesforce.com competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on salesforce.com customers community ecosystem | Providing Strong Competitive Advantage |
Position among Retailers and Wholesalers – salesforce.com retail strategy | Yes, salesforce.com has strong relationship with retailers and wholesalers | Yes, salesforce.com has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of salesforce.com | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Product Portfolio and Synergy among Various Product Lines of salesforce.com | 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 |
Distribution and Logistics Costs Competitiveness | Yes, as it helps salesforce.com in delivering lower costs | No | Can be imitated by competitors of salesforce.com but it is difficult | Yes | Medium to Long Term Competitive Advantage |
salesforce.com 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 salesforce.com | salesforce.com is leveraging the customer loyalty to good effect | Provide salesforce.com medium term competitive advantage |
Access to Cheap Capital for salesforce.com | Yes, as a leading player in the industry and current macro economic conditions, salesforce.com has access to cheap capital | No | Can be imitated by the competitors of salesforce.com | Not been totally exploited | Not significant in creating competitive advantage |
Ability to Attract Talent in Various Local & Global Markets | Yes, salesforce.com 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 salesforce.com | To a large extent yes | Providing Strong Competitive Advantage |
Financial Resources of salesforce.com | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | salesforce.com has reasonably sound financial position | salesforce.com has relatively sustainable Competitive Advantage |
salesforce.com 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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