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Essendant 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 Essendant to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Essendant? Defining Valuable in VRIO
A resource or capability is considered valuable for Essendant , if it allows the
Essendant to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Essendant to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Essendant.
What are Rare Resources for Essendant? Defining Rare in VRIO
In an industry that Essendant operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Essendant require rare resources to compete in the industry. If Essendant don’t have rare resources that are required to succeed in the industry then Essendant won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Essendant competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Essendant? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Essendant 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. Essendant 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 Essendant
What is a Organization for Essendant? Defining Organization in VRIO
Even if the Essendant 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 Essendant 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 |
---|---|---|---|---|---|
Pricing Strategies of Essendant | Yes, Essendant has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Essendant with a Temporary Competitive Advantage |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with Essendant dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of Essendant | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Sales Force and Channel Management of Essendant | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide Essendant sustainable competitive advantage. Potential is certainly there. |
Opportunities for Brand Extensions for Essendant 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 |
Opportunities in the E-Commerce Space for Essendant - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Essendant 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 |
Customer Community of Essendant | Yes, as customers are co-creating products | Yes, the Essendant has able to build a special relationship with its customers | It is very difficult for Essendant competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Essendant customers community ecosystem | Providing Strong Competitive Advantage |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Essendant in delivering lower costs | No | Can be imitated by competitors of Essendant but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Track Record of Leadership Team at Essendant | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Brand awareness of Essendant products and services | Yes, the brand awareness of Essendant products are high | Yes, Essendant has one of the leading brand in the industry | No | Essendant has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Essendant 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 Essendant | Essendant is leveraging the customer loyalty to good effect | Provide Essendant medium term competitive advantage |
Financial Resources of Essendant | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Essendant has reasonably sound financial position | Essendant has relatively sustainable Competitive Advantage |
Product Portfolio and Synergy among Various Product Lines of Essendant | 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 |
Opportunities in the Adjacent Industries that Essendant 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 |
Essendant 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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