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Cisco Systems 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 Cisco Systems to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Cisco Systems? Defining Valuable in VRIO
A resource or capability is considered valuable for Cisco Systems , if it allows the
Cisco Systems to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Cisco Systems to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Cisco Systems.
What are Rare Resources for Cisco Systems? Defining Rare in VRIO
In an industry that Cisco Systems operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Cisco Systems require rare resources to compete in the industry. If Cisco Systems don’t have rare resources that are required to succeed in the industry then Cisco Systems won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Cisco Systems competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Cisco Systems? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Cisco Systems 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. Cisco Systems 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 Cisco Systems
What is a Organization for Cisco Systems? Defining Organization in VRIO
Even if the Cisco Systems 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 Cisco Systems 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 |
---|---|---|---|---|---|
Financial Resources of Cisco Systems | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Cisco Systems has reasonably sound financial position | Cisco Systems has relatively sustainable Competitive Advantage |
Brand Positioning of Cisco Systems 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 |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with Cisco Systems dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Cisco Systems in delivering lower costs | No | Can be imitated by competitors of Cisco Systems but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Customer Community of Cisco Systems | Yes, as customers are co-creating products | Yes, the Cisco Systems has able to build a special relationship with its customers | It is very difficult for Cisco Systems competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Cisco Systems customers community ecosystem | Providing Strong Competitive Advantage |
Product Portfolio and Synergy among Various Product Lines of Cisco Systems | 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 |
Access to Cheap Capital for Cisco Systems | Yes, as a leading player in the industry and current macro economic conditions, Cisco Systems has access to cheap capital | No | Can be imitated by the competitors of Cisco Systems | Not been totally exploited | Not significant in creating competitive advantage |
Position among Retailers and Wholesalers – Cisco Systems retail strategy | Yes, Cisco Systems has strong relationship with retailers and wholesalers | Yes, Cisco Systems has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Brand awareness of Cisco Systems products and services | Yes, the brand awareness of Cisco Systems products are high | Yes, Cisco Systems has one of the leading brand in the industry | No | Cisco Systems has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Alignment of Activities with Cisco Systems 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 |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for Cisco Systems to thwart competition | Yes, IPR and other rights are rare and competition of Cisco Systems 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 |
Opportunities in the Adjacent Industries that Cisco Systems 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 |
Global and Local Presence of Cisco Systems | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Cisco Systems but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Cisco Systems 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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