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KB Home 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 KB Home to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for KB Home? Defining Valuable in VRIO
A resource or capability is considered valuable for KB Home , if it allows the
KB Home to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow KB Home to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for KB Home.
What are Rare Resources for KB Home? Defining Rare in VRIO
In an industry that KB Home operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. KB Home require rare resources to compete in the industry. If KB Home don’t have rare resources that are required to succeed in the industry then KB Home won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide KB Home competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for KB Home? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to KB Home 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. KB Home 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 KB Home
What is a Organization for KB Home? Defining Organization in VRIO
Even if the KB Home 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 KB Home 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 |
---|---|---|---|---|---|
Position among Retailers and Wholesalers – KB Home retail strategy | Yes, KB Home has strong relationship with retailers and wholesalers | Yes, KB Home has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Global and Local Presence of KB Home | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of KB Home but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Track Record of Leadership Team at KB Home | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Pricing Strategies of KB Home | Yes, KB Home has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide KB Home with a Temporary Competitive Advantage |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for KB Home to thwart competition | Yes, IPR and other rights are rare and competition of KB Home 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 |
Ability to Attract Talent in Various Local & Global Markets | Yes, KB Home 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 KB Home | To a large extent yes | Providing Strong Competitive Advantage |
Product Portfolio and Synergy among Various Product Lines of KB Home | 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 |
Alignment of Activities with KB Home 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 |
Track Record of Project Execution | Yes, especially in an industry where there are frequent cost overun | Yes, especially in the segment that KB Home operates in | No, none of the competitors so far has able to imitate this expertise | Yes, KB Home is successful at it | Providing Strong Competitive Advantage |
KB Home 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 KB Home | KB Home is leveraging the customer loyalty to good effect | Provide KB Home medium term competitive advantage |
Brand awareness of KB Home products and services | Yes, the brand awareness of KB Home products are high | Yes, KB Home has one of the leading brand in the industry | No | KB Home has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with KB Home dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Customer Community of KB Home | Yes, as customers are co-creating products | Yes, the KB Home has able to build a special relationship with its customers | It is very difficult for KB Home competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on KB Home customers community ecosystem | Providing Strong Competitive Advantage |
Opportunities in the E-Commerce Space for KB Home - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and KB Home 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 |
KB Home 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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