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Lennox International 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 Lennox International to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Lennox International? Defining Valuable in VRIO
A resource or capability is considered valuable for Lennox International , if it allows the
Lennox International to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Lennox International to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Lennox International.
What are Rare Resources for Lennox International? Defining Rare in VRIO
In an industry that Lennox International operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Lennox International require rare resources to compete in the industry. If Lennox International don’t have rare resources that are required to succeed in the industry then Lennox International won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Lennox International competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Lennox International? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Lennox International 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. Lennox International 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 Lennox International
What is a Organization for Lennox International? Defining Organization in VRIO
Even if the Lennox International 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 Lennox International 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 |
---|---|---|---|---|---|
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for Lennox International to thwart competition | Yes, IPR and other rights are rare and competition of Lennox International 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 |
Financial Resources of Lennox International | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Lennox International has reasonably sound financial position | Lennox International has relatively sustainable Competitive Advantage |
Customer Community of Lennox International | Yes, as customers are co-creating products | Yes, the Lennox International has able to build a special relationship with its customers | It is very difficult for Lennox International competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Lennox International customers community ecosystem | Providing Strong Competitive Advantage |
Pricing Strategies of Lennox International | Yes, Lennox International has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Lennox International with a Temporary Competitive Advantage |
Access to Cheap Capital for Lennox International | Yes, as a leading player in the industry and current macro economic conditions, Lennox International has access to cheap capital | No | Can be imitated by the competitors of Lennox International | Not been totally exploited | Not significant in creating competitive advantage |
Track Record of Leadership Team at Lennox International | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Successful Implementation of Digital Strategy at Lennox International | 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 |
Brand awareness of Lennox International products and services | Yes, the brand awareness of Lennox International products are high | Yes, Lennox International has one of the leading brand in the industry | No | Lennox International has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Alignment of Activities with Lennox International 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 |
Supply Chain Network Flexibility of Lennox International | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Lennox International organizational structure and capabilities | Keeps the business running |
Lennox International 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 Lennox International | Lennox International is leveraging the customer loyalty to good effect | Provide Lennox International medium term competitive advantage |
Ability to Attract Talent in Various Local & Global Markets | Yes, Lennox International 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 Lennox International | To a large extent yes | Providing Strong Competitive Advantage |
Track Record of Project Execution | Yes, especially in an industry where there are frequent cost overun | Yes, especially in the segment that Lennox International operates in | No, none of the competitors so far has able to imitate this expertise | Yes, Lennox International is successful at it | Providing Strong Competitive Advantage |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with Lennox International dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Lennox International 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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