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NVR 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 NVR to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for NVR? Defining Valuable in VRIO
A resource or capability is considered valuable for NVR , if it allows the
NVR to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow NVR to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for NVR.
What are Rare Resources for NVR? Defining Rare in VRIO
In an industry that NVR operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. NVR require rare resources to compete in the industry. If NVR don’t have rare resources that are required to succeed in the industry then NVR won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide NVR competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for NVR? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to NVR 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. NVR 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 NVR
What is a Organization for NVR? Defining Organization in VRIO
Even if the NVR 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 NVR 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 |
---|---|---|---|---|---|
NVR 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 NVR | NVR is leveraging the customer loyalty to good effect | Provide NVR medium term competitive advantage |
Brand Positioning of NVR 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 |
Distribution and Logistics Costs Competitiveness | Yes, as it helps NVR in delivering lower costs | No | Can be imitated by competitors of NVR but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Alignment of Activities with NVR 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 |
Sales Force and Channel Management of NVR | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide NVR sustainable competitive advantage. Potential is certainly there. |
Opportunities in the Adjacent Industries that NVR 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 NVR | Yes, as customers are co-creating products | Yes, the NVR has able to build a special relationship with its customers | It is very difficult for NVR competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on NVR customers community ecosystem | Providing Strong Competitive Advantage |
Access to Cheap Capital for NVR | Yes, as a leading player in the industry and current macro economic conditions, NVR has access to cheap capital | No | Can be imitated by the competitors of NVR | Not been totally exploited | Not significant in creating competitive advantage |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of NVR | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Position among Retailers and Wholesalers – NVR retail strategy | Yes, NVR has strong relationship with retailers and wholesalers | Yes, NVR has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Marketing Expertise within NVR | 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 NVR are often matched by competitors | Yes, NVR is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Supply Chain Network Flexibility of NVR | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by NVR organizational structure and capabilities | Keeps the business running |
Brand awareness of NVR products and services | Yes, the brand awareness of NVR products are high | Yes, NVR has one of the leading brand in the industry | No | NVR has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Track Record of Leadership Team at NVR | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
NVR 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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