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

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

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

What are Rare Resources for Cerner? Defining Rare in VRIO

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

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

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

What is a Organization for Cerner? Defining Organization in VRIO

Even if the Cerner 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 Cerner 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 Cerner	Yes, Cerner has sound pricing strategies	No	Pricing strategies are regularly imitated in the industry	Yes, firm has a pricing analytics engine	It can only provide Cerner with a Temporary Competitive Advantage
Cerner 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 Cerner	Cerner is leveraging the customer loyalty to good effect	Provide Cerner medium term competitive advantage
Brand Positioning of Cerner 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
Talent to Manage Regulatory and Legal Obligations	Yes	No	Can be imitated by competitors	Yes	Not critical factor
Track Record of Leadership Team at Cerner	Yes	Yes	Can't be imitated by competitors	Yes	Providing Strong Competitive Advantage
Access to Critical Raw Material for Successful Execution	Yes	Yes, as other competitors have to come to terms with Cerner dominant market position	Can be imitated by competitors	Yes	Providing Sustainable Competitive Advantage
Alignment of Activities with Cerner 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
Successful Implementation of Digital Strategy at Cerner	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
Opportunities in the E-Commerce Space for Cerner - using Present IT Capabilities	Yes, the e-commerce space is rapidly growing and Cerner 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 Cheap Capital for Cerner	Yes, as a leading player in the industry and current macro economic conditions, Cerner has access to cheap capital	No	Can be imitated by the competitors of Cerner	Not been totally exploited	Not significant in creating competitive advantage
Ability to Attract Talent in Various Local & Global Markets	Yes, Cerner 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 Cerner	To a large extent yes	Providing Strong Competitive Advantage
Financial Resources of Cerner	Yes	No	Financial instruments and market liquidity are available to all the nearest competitors	Cerner has reasonably sound financial position	Cerner has relatively sustainable Competitive Advantage
Vision of the Leadership for Next Set of Challenges	Yes	No	Can't be imitated by competitors of Cerner	Not based on information provided in the case	Can Lead to Strong Competitive Advantage
Opportunities in the Adjacent Industries that Cerner 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

Cerner 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