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UPS 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 UPS to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for UPS? Defining Valuable in VRIO
A resource or capability is considered valuable for UPS , if it allows the
UPS to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow UPS to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for UPS.
What are Rare Resources for UPS? Defining Rare in VRIO
In an industry that UPS operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. UPS require rare resources to compete in the industry. If UPS don’t have rare resources that are required to succeed in the industry then UPS won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide UPS competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for UPS? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to UPS 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. UPS 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 UPS
What is a Organization for UPS? Defining Organization in VRIO
Even if the UPS 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 UPS 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 UPS | Yes, UPS has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide UPS with a Temporary Competitive Advantage |
Ability to Attract Talent in Various Local & Global Markets | Yes, UPS 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 UPS | To a large extent yes | Providing Strong Competitive Advantage |
Product Portfolio and Synergy among Various Product Lines of UPS | 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 |
Global and Local Presence of UPS | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of UPS but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with UPS dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Distribution and Logistics Costs Competitiveness | Yes, as it helps UPS in delivering lower costs | No | Can be imitated by competitors of UPS but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Customer Community of UPS | Yes, as customers are co-creating products | Yes, the UPS has able to build a special relationship with its customers | It is very difficult for UPS competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on UPS customers community ecosystem | Providing Strong Competitive Advantage |
Supply Chain Network Flexibility of UPS | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by UPS organizational structure and capabilities | Keeps the business running |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Track Record of Leadership Team at UPS | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Marketing Expertise within UPS | 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 UPS are often matched by competitors | Yes, UPS is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Access to Cheap Capital for UPS | Yes, as a leading player in the industry and current macro economic conditions, UPS has access to cheap capital | No | Can be imitated by the competitors of UPS | Not been totally exploited | Not significant in creating competitive advantage |
Sales Force and Channel Management of UPS | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide UPS sustainable competitive advantage. Potential is certainly there. |
Financial Resources of UPS | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | UPS has reasonably sound financial position | UPS has relatively sustainable Competitive Advantage |
UPS 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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