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FedEx 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 FedEx to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for FedEx? Defining Valuable in VRIO
A resource or capability is considered valuable for FedEx , if it allows the
FedEx to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow FedEx to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for FedEx.
What are Rare Resources for FedEx? Defining Rare in VRIO
In an industry that FedEx operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. FedEx require rare resources to compete in the industry. If FedEx don’t have rare resources that are required to succeed in the industry then FedEx won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide FedEx competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for FedEx? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to FedEx 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. FedEx 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 FedEx
What is a Organization for FedEx? Defining Organization in VRIO
Even if the FedEx 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 FedEx 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 |
---|---|---|---|---|---|
Customer Community of FedEx | Yes, as customers are co-creating products | Yes, the FedEx has able to build a special relationship with its customers | It is very difficult for FedEx competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on FedEx customers community ecosystem | Providing Strong Competitive Advantage |
Brand awareness of FedEx products and services | Yes, the brand awareness of FedEx products are high | Yes, FedEx has one of the leading brand in the industry | No | FedEx has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Opportunities for Brand Extensions for FedEx products | Yes, new niches are emerging in the market | No, as most of the competitors are also targeting those niches | Yes can be imitated by the competitors | Brand extensions will require higher marketing budget | Temporary Competitive Advantage |
Access to Cheap Capital for FedEx | Yes, as a leading player in the industry and current macro economic conditions, FedEx has access to cheap capital | No | Can be imitated by the competitors of FedEx | Not been totally exploited | Not significant in creating competitive advantage |
Opportunities in the E-Commerce Space for FedEx - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and FedEx 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 |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for FedEx to thwart competition | Yes, IPR and other rights are rare and competition of FedEx 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 |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of FedEx | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Global and Local Presence of FedEx | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of FedEx but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Position among Retailers and Wholesalers – FedEx retail strategy | Yes, FedEx has strong relationship with retailers and wholesalers | Yes, FedEx has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Sales Force and Channel Management of FedEx | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide FedEx sustainable competitive advantage. Potential is certainly there. |
Successful Implementation of Digital Strategy at FedEx | 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 |
FedEx 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 FedEx | FedEx is leveraging the customer loyalty to good effect | Provide FedEx medium term competitive advantage |
Brand Positioning of FedEx 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 |
Supply Chain Network Flexibility of FedEx | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by FedEx organizational structure and capabilities | Keeps the business running |
FedEx 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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