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Silgan 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 Silgan Holdings to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Silgan Holdings? Defining Valuable in VRIO
A resource or capability is considered valuable for Silgan Holdings , if it allows the
Silgan 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 Silgan Holdings to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Silgan Holdings.
What are Rare Resources for Silgan Holdings? Defining Rare in VRIO
In an industry that Silgan Holdings operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Silgan Holdings require rare resources to compete in the industry. If Silgan Holdings don’t have rare resources that are required to succeed in the industry then Silgan Holdings won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Silgan 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 Silgan Holdings? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Silgan 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. Silgan 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 Silgan Holdings
What is a Organization for Silgan Holdings? Defining Organization in VRIO
Even if the Silgan 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 Silgan 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 |
---|---|---|---|---|---|
Alignment of Activities with Silgan Holdings 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 |
Opportunities in the Adjacent Industries that Silgan 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 |
Track Record of Leadership Team at Silgan Holdings | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Ability to Attract Talent in Various Local & Global Markets | Yes, Silgan 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 Silgan Holdings | To a large extent yes | Providing Strong Competitive Advantage |
Access to Cheap Capital for Silgan Holdings | Yes, as a leading player in the industry and current macro economic conditions, Silgan Holdings has access to cheap capital | No | Can be imitated by the competitors of Silgan Holdings | Not been totally exploited | Not significant in creating competitive advantage |
Successful Implementation of Digital Strategy at Silgan 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 |
Financial Resources of Silgan Holdings | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Silgan Holdings has reasonably sound financial position | Silgan Holdings has relatively sustainable Competitive Advantage |
Position among Retailers and Wholesalers – Silgan Holdings retail strategy | Yes, Silgan Holdings has strong relationship with retailers and wholesalers | Yes, Silgan Holdings has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Brand awareness of Silgan Holdings products and services | Yes, the brand awareness of Silgan Holdings products are high | Yes, Silgan Holdings has one of the leading brand in the industry | No | Silgan Holdings has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of Silgan Holdings | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Supply Chain Network Flexibility of Silgan Holdings | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Silgan Holdings organizational structure and capabilities | Keeps the business running |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Silgan Holdings in delivering lower costs | No | Can be imitated by competitors of Silgan Holdings but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Opportunities for Brand Extensions for Silgan 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 |
Silgan 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 Silgan Holdings | Silgan Holdings is leveraging the customer loyalty to good effect | Provide Silgan Holdings medium term competitive advantage |
Silgan 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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