Airgas 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 Airgas to do better resource allocation and build a defensible value and supply chain.

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What is a Valuable Resource for Airgas? Defining Valuable in VRIO

A resource or capability is considered valuable for Airgas , if it allows the Airgas to exploit opportunities or negate threats emerging out of both the micro business environment and the macro environment. If a resource does not allow Airgas to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Airgas.

What are Rare Resources for Airgas? Defining Rare in VRIO

In an industry that Airgas operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Airgas require rare resources to compete in the industry. If Airgas don’t have rare resources that are required to succeed in the industry then Airgas won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Airgas competitive advantage against players that don’t have those rare resources. HBR Case Study Solution

What is a Inimitable (Difficult to Immitate) Resource for Airgas? Defining Inimitable in VRIO

A valuable and rare resource can provide a competitive advantage to Airgas 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. Airgas 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 Airgas

What is a Organization for Airgas? Defining Organization in VRIO

Even if the Airgas 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 Airgas 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 in the Adjacent Industries that Airgas 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
Customer Community of Airgas	Yes, as customers are co-creating products	Yes, the Airgas has able to build a special relationship with its customers	It is very difficult for Airgas competitors to imitate the culture and community dedication	Going by the data, there is still a lot of upside in building on Airgas customers community ecosystem	Providing Strong Competitive Advantage
Distribution and Logistics Costs Competitiveness	Yes, as it helps Airgas in delivering lower costs	No	Can be imitated by competitors of Airgas but it is difficult	Yes	Medium to Long Term Competitive Advantage
Successful Implementation of Digital Strategy at Airgas	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
Sales Force and Channel Management of Airgas	Yes	No	Can be imitated by competitors	Still there is lot of potential to utilize the excellent sales force	Can provide Airgas sustainable competitive advantage. Potential is certainly there.
Intellectual Property Rights, Copyrights, and Trademarks	Yes, they are extremely valuable for Airgas to thwart competition	Yes, IPR and other rights are rare and competition of Airgas 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
Brand awareness of Airgas products and services	Yes, the brand awareness of Airgas products are high	Yes, Airgas has one of the leading brand in the industry	No	Airgas has utilized its leading brand position in various segments	Sustainable Competitive Advantage
Vision of the Leadership for Next Set of Challenges	Yes	No	Can't be imitated by competitors of Airgas	Not based on information provided in the case	Can Lead to Strong Competitive Advantage
Airgas 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 Airgas	Airgas is leveraging the customer loyalty to good effect	Provide Airgas medium term competitive advantage
Opportunities in the E-Commerce Space for Airgas - using Present IT Capabilities	Yes, the e-commerce space is rapidly growing and Airgas 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
Access to Critical Raw Material for Successful Execution	Yes	Yes, as other competitors have to come to terms with Airgas dominant market position	Can be imitated by competitors	Yes	Providing Sustainable Competitive Advantage
Brand Positioning of Airgas 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
Financial Resources of Airgas	Yes	No	Financial instruments and market liquidity are available to all the nearest competitors	Airgas has reasonably sound financial position	Airgas has relatively sustainable Competitive Advantage
Pricing Strategies of Airgas	Yes, Airgas has sound pricing strategies	No	Pricing strategies are regularly imitated in the industry	Yes, firm has a pricing analytics engine	It can only provide Airgas with a Temporary Competitive Advantage

Airgas 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