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Nexeo Solutions Holdings 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 Nexeo Solutions Holdings to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Nexeo Solutions Holdings? Defining Valuable in VRIO
A resource or capability is considered valuable for Nexeo Solutions Holdings , if it allows the
Nexeo Solutions Holdings to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Nexeo Solutions Holdings to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Nexeo Solutions Holdings.
What are Rare Resources for Nexeo Solutions Holdings? Defining Rare in VRIO
In an industry that Nexeo Solutions Holdings operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Nexeo Solutions Holdings require rare resources to compete in the industry. If Nexeo Solutions Holdings don’t have rare resources that are required to succeed in the industry then Nexeo Solutions Holdings won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Nexeo Solutions Holdings competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Nexeo Solutions Holdings? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Nexeo Solutions Holdings 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. Nexeo Solutions Holdings 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 Nexeo Solutions Holdings
What is a Organization for Nexeo Solutions Holdings? Defining Organization in VRIO
Even if the Nexeo Solutions Holdings 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 Nexeo Solutions Holdings 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 Nexeo Solutions Holdings | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Nexeo Solutions Holdings organizational structure and capabilities | Keeps the business running |
Pricing Strategies of Nexeo Solutions Holdings | Yes, Nexeo Solutions Holdings has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Nexeo Solutions Holdings with a Temporary Competitive Advantage |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Sales Force and Channel Management of Nexeo Solutions Holdings | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide Nexeo Solutions Holdings sustainable competitive advantage. Potential is certainly there. |
Marketing Expertise within Nexeo Solutions Holdings | 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 Nexeo Solutions Holdings are often matched by competitors | Yes, Nexeo Solutions Holdings is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with Nexeo Solutions Holdings dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Customer Community of Nexeo Solutions Holdings | Yes, as customers are co-creating products | Yes, the Nexeo Solutions Holdings has able to build a special relationship with its customers | It is very difficult for Nexeo Solutions Holdings competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Nexeo Solutions Holdings customers community ecosystem | Providing Strong Competitive Advantage |
Nexeo Solutions Holdings 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 Nexeo Solutions Holdings | Nexeo Solutions Holdings is leveraging the customer loyalty to good effect | Provide Nexeo Solutions Holdings medium term competitive advantage |
Ability to Attract Talent in Various Local & Global Markets | Yes, Nexeo Solutions Holdings 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 Nexeo Solutions Holdings | To a large extent yes | Providing Strong Competitive Advantage |
Financial Resources of Nexeo Solutions Holdings | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Nexeo Solutions Holdings has reasonably sound financial position | Nexeo Solutions Holdings has relatively sustainable Competitive Advantage |
Successful Implementation of Digital Strategy at Nexeo Solutions Holdings | 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 for Brand Extensions for Nexeo Solutions Holdings 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 |
Track Record of Project Execution | Yes, especially in an industry where there are frequent cost overun | Yes, especially in the segment that Nexeo Solutions Holdings operates in | No, none of the competitors so far has able to imitate this expertise | Yes, Nexeo Solutions Holdings is successful at it | Providing Strong Competitive Advantage |
Opportunities in the Adjacent Industries that Nexeo Solutions Holdings 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 |
Nexeo Solutions Holdings 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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