American Airlines Group 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 American Airlines Group to do better resource allocation and build a defensible value and supply chain.

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What is a Valuable Resource for American Airlines Group? Defining Valuable in VRIO

A resource or capability is considered valuable for American Airlines Group , if it allows the American Airlines Group to exploit opportunities or negate threats emerging out of both the micro business environment and the macro environment. If a resource does not allow American Airlines Group to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for American Airlines Group.

What are Rare Resources for American Airlines Group? Defining Rare in VRIO

In an industry that American Airlines Group operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. American Airlines Group require rare resources to compete in the industry. If American Airlines Group don’t have rare resources that are required to succeed in the industry then American Airlines Group won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide American Airlines Group competitive advantage against players that don’t have those rare resources. HBR Case Study Solution

What is a Inimitable (Difficult to Immitate) Resource for American Airlines Group? Defining Inimitable in VRIO

A valuable and rare resource can provide a competitive advantage to American Airlines Group 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. American Airlines Group 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 American Airlines Group

What is a Organization for American Airlines Group? Defining Organization in VRIO

Even if the American Airlines Group 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 American Airlines Group 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
Financial Resources of American Airlines Group	Yes	No	Financial instruments and market liquidity are available to all the nearest competitors	American Airlines Group has reasonably sound financial position	American Airlines Group has relatively sustainable Competitive Advantage
Marketing Expertise within American Airlines Group	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 American Airlines Group are often matched by competitors	Yes, American Airlines Group is leveraging both its inhouse marketing department and external expertise	Temporary Competitive Advantage
American Airlines Group 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 American Airlines Group	American Airlines Group is leveraging the customer loyalty to good effect	Provide American Airlines Group medium term competitive advantage
Access to Critical Raw Material for Successful Execution	Yes	Yes, as other competitors have to come to terms with American Airlines Group dominant market position	Can be imitated by competitors	Yes	Providing Sustainable Competitive Advantage
Alignment of Activities with American Airlines Group 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 E-Commerce Space for American Airlines Group - using Present IT Capabilities	Yes, the e-commerce space is rapidly growing and American Airlines Group 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
Position among Retailers and Wholesalers – American Airlines Group retail strategy	Yes, American Airlines Group has strong relationship with retailers and wholesalers	Yes, American Airlines Group has dedicated channel partners	Difficult to imitate though not impossible	Yes, over the years company has used it successfully	Sustainable Competitive Advantage
Vision of the Leadership for Next Set of Challenges	Yes	No	Can't be imitated by competitors of American Airlines Group	Not based on information provided in the case	Can Lead to 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 American Airlines Group operates in	No, none of the competitors so far has able to imitate this expertise	Yes, American Airlines Group is successful at it	Providing Strong Competitive Advantage
Talent to Manage Regulatory and Legal Obligations	Yes	No	Can be imitated by competitors	Yes	Not critical factor
Brand Positioning of American Airlines Group 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
Customer Community of American Airlines Group	Yes, as customers are co-creating products	Yes, the American Airlines Group has able to build a special relationship with its customers	It is very difficult for American Airlines Group competitors to imitate the culture and community dedication	Going by the data, there is still a lot of upside in building on American Airlines Group customers community ecosystem	Providing Strong Competitive Advantage
Pricing Strategies of American Airlines Group	Yes, American Airlines Group has sound pricing strategies	No	Pricing strategies are regularly imitated in the industry	Yes, firm has a pricing analytics engine	It can only provide American Airlines Group with a Temporary Competitive Advantage
Opportunities in the Adjacent Industries that American Airlines Group 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

American Airlines Group SWOT Analysis, SWOT Matrix, Weighted SWOT Case Study Solution & Analysis

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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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