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