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Sanmina 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 Sanmina to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Sanmina? Defining Valuable in VRIO
A resource or capability is considered valuable for Sanmina , if it allows the
Sanmina to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Sanmina to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Sanmina.
What are Rare Resources for Sanmina? Defining Rare in VRIO
In an industry that Sanmina operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Sanmina require rare resources to compete in the industry. If Sanmina don’t have rare resources that are required to succeed in the industry then Sanmina won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Sanmina competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Sanmina? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Sanmina 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. Sanmina 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 Sanmina
What is a Organization for Sanmina? Defining Organization in VRIO
Even if the Sanmina 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 Sanmina 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 |
---|---|---|---|---|---|
Opportunities for Brand Extensions for Sanmina products | Yes, new niches are emerging in the market | No, as most of the competitors are also targeting those niches | Yes can be imitated by the competitors | Brand extensions will require higher marketing budget | Temporary Competitive Advantage |
Position among Retailers and Wholesalers – Sanmina retail strategy | Yes, Sanmina has strong relationship with retailers and wholesalers | Yes, Sanmina has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Sales Force and Channel Management of Sanmina | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide Sanmina sustainable competitive advantage. Potential is certainly there. |
Alignment of Activities with Sanmina 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 |
Brand Positioning of Sanmina 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 |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for Sanmina to thwart competition | Yes, IPR and other rights are rare and competition of Sanmina will find it extremely difficult to copy | Risk of imitation is low but given the margins in the industry disruption chances are high | So far the firm has not utilized the full extent of its IPR & other properties | Providing 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 Sanmina operates in | No, none of the competitors so far has able to imitate this expertise | Yes, Sanmina is successful at it | Providing Strong Competitive Advantage |
Track Record of Leadership Team at Sanmina | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Product Portfolio and Synergy among Various Product Lines of Sanmina | 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 |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of Sanmina | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Brand awareness of Sanmina products and services | Yes, the brand awareness of Sanmina products are high | Yes, Sanmina has one of the leading brand in the industry | No | Sanmina has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Sanmina 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 Sanmina | Sanmina is leveraging the customer loyalty to good effect | Provide Sanmina medium term competitive advantage |
Successful Implementation of Digital Strategy at Sanmina | 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 |
Global and Local Presence of Sanmina | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Sanmina but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Sanmina 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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