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Leggett & Platt 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 Leggett & Platt to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Leggett & Platt? Defining Valuable in VRIO
A resource or capability is considered valuable for Leggett & Platt , if it allows the
Leggett & Platt to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Leggett & Platt to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Leggett & Platt.
What are Rare Resources for Leggett & Platt? Defining Rare in VRIO
In an industry that Leggett & Platt operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Leggett & Platt require rare resources to compete in the industry. If Leggett & Platt don’t have rare resources that are required to succeed in the industry then Leggett & Platt won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Leggett & Platt competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Leggett & Platt? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Leggett & Platt 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. Leggett & Platt 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 Leggett & Platt
What is a Organization for Leggett & Platt? Defining Organization in VRIO
Even if the Leggett & Platt 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 Leggett & Platt 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 |
---|---|---|---|---|---|
Track Record of Project Execution | Yes, especially in an industry where there are frequent cost overun | Yes, especially in the segment that Leggett & Platt operates in | No, none of the competitors so far has able to imitate this expertise | Yes, Leggett & Platt is successful at it | Providing Strong Competitive Advantage |
Alignment of Activities with Leggett & Platt 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 |
Customer Community of Leggett & Platt | Yes, as customers are co-creating products | Yes, the Leggett & Platt has able to build a special relationship with its customers | It is very difficult for Leggett & Platt competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Leggett & Platt customers community ecosystem | Providing Strong Competitive Advantage |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Leggett & Platt in delivering lower costs | No | Can be imitated by competitors of Leggett & Platt but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Ability to Attract Talent in Various Local & Global Markets | Yes, Leggett & Platt 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 Leggett & Platt | To a large extent yes | Providing Strong Competitive Advantage |
Leggett & Platt 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 Leggett & Platt | Leggett & Platt is leveraging the customer loyalty to good effect | Provide Leggett & Platt medium term competitive advantage |
Opportunities in the Adjacent Industries that Leggett & Platt 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 |
Brand awareness of Leggett & Platt products and services | Yes, the brand awareness of Leggett & Platt products are high | Yes, Leggett & Platt has one of the leading brand in the industry | No | Leggett & Platt has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Position among Retailers and Wholesalers – Leggett & Platt retail strategy | Yes, Leggett & Platt has strong relationship with retailers and wholesalers | Yes, Leggett & Platt has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Opportunities for Brand Extensions for Leggett & Platt 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 |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of Leggett & Platt | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Opportunities in the E-Commerce Space for Leggett & Platt - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Leggett & Platt 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 |
Sales Force and Channel Management of Leggett & Platt | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide Leggett & Platt sustainable competitive advantage. Potential is certainly there. |
Marketing Expertise within Leggett & Platt | 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 Leggett & Platt are often matched by competitors | Yes, Leggett & Platt is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Leggett & Platt 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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