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