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Commercial Metals 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 Commercial Metals to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Commercial Metals? Defining Valuable in VRIO
A resource or capability is considered valuable for Commercial Metals , if it allows the
Commercial Metals to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Commercial Metals to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Commercial Metals.
What are Rare Resources for Commercial Metals? Defining Rare in VRIO
In an industry that Commercial Metals operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Commercial Metals require rare resources to compete in the industry. If Commercial Metals don’t have rare resources that are required to succeed in the industry then Commercial Metals won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Commercial Metals competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Commercial Metals? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Commercial Metals 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. Commercial Metals 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 Commercial Metals
What is a Organization for Commercial Metals? Defining Organization in VRIO
Even if the Commercial Metals 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 Commercial Metals 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 Commercial Metals 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 |
Ability to Attract Talent in Various Local & Global Markets | Yes, Commercial Metals 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 Commercial Metals | To a large extent yes | Providing Strong Competitive Advantage |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with Commercial Metals dominant market position | Can be imitated by competitors | Yes | Providing 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 Commercial Metals operates in | No, none of the competitors so far has able to imitate this expertise | Yes, Commercial Metals is successful at it | Providing Strong Competitive Advantage |
Opportunities in the E-Commerce Space for Commercial Metals - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Commercial Metals 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 |
Supply Chain Network Flexibility of Commercial Metals | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Commercial Metals organizational structure and capabilities | Keeps the business running |
Track Record of Leadership Team at Commercial Metals | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Product Portfolio and Synergy among Various Product Lines of Commercial Metals | 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 Commercial Metals in delivering lower costs | No | Can be imitated by competitors of Commercial Metals but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Pricing Strategies of Commercial Metals | Yes, Commercial Metals has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Commercial Metals with a Temporary Competitive Advantage |
Brand Positioning of Commercial Metals 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 |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Sales Force and Channel Management of Commercial Metals | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide Commercial Metals sustainable competitive advantage. Potential is certainly there. |
Access to Cheap Capital for Commercial Metals | Yes, as a leading player in the industry and current macro economic conditions, Commercial Metals has access to cheap capital | No | Can be imitated by the competitors of Commercial Metals | Not been totally exploited | Not significant in creating competitive advantage |
Commercial Metals 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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