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USG 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 USG to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for USG? Defining Valuable in VRIO
A resource or capability is considered valuable for USG , if it allows the
USG to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow USG to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for USG.
What are Rare Resources for USG? Defining Rare in VRIO
In an industry that USG operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. USG require rare resources to compete in the industry. If USG don’t have rare resources that are required to succeed in the industry then USG won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide USG competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for USG? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to USG 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. USG 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 USG
What is a Organization for USG? Defining Organization in VRIO
Even if the USG 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 USG 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 |
---|---|---|---|---|---|
Opportunities in the E-Commerce Space for USG - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and USG 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 |
Brand Positioning of USG 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 |
Access to Cheap Capital for USG | Yes, as a leading player in the industry and current macro economic conditions, USG has access to cheap capital | No | Can be imitated by the competitors of USG | Not been totally exploited | Not significant in creating competitive advantage |
Supply Chain Network Flexibility of USG | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by USG organizational structure and capabilities | Keeps the business running |
Opportunities in the Adjacent Industries that USG 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 |
Successful Implementation of Digital Strategy at USG | 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 |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for USG to thwart competition | Yes, IPR and other rights are rare and competition of USG 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 |
Product Portfolio and Synergy among Various Product Lines of USG | Yes, it is valuable in the industry given the various segmentations & consumer preferences. | Most of the competitors are trying to enter the lucrative segments | Can be imitated by the competitors | The firm has used it to good effect, details can be found in case exhibit | Provide short term competitive advantage but requires constant innovation to sustain |
Pricing Strategies of USG | Yes, USG has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide USG with a Temporary Competitive Advantage |
Distribution and Logistics Costs Competitiveness | Yes, as it helps USG in delivering lower costs | No | Can be imitated by competitors of USG but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Alignment of Activities with USG 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 |
Brand awareness of USG products and services | Yes, the brand awareness of USG products are high | Yes, USG has one of the leading brand in the industry | No | USG has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Financial Resources of USG | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | USG has reasonably sound financial position | USG has relatively sustainable Competitive Advantage |
Track Record of Leadership Team at USG | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
USG 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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