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Mercury General 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 Mercury General to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Mercury General? Defining Valuable in VRIO
A resource or capability is considered valuable for Mercury General , if it allows the
Mercury General to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Mercury General to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Mercury General.
What are Rare Resources for Mercury General? Defining Rare in VRIO
In an industry that Mercury General operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Mercury General require rare resources to compete in the industry. If Mercury General don’t have rare resources that are required to succeed in the industry then Mercury General won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Mercury General competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Mercury General? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Mercury General 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. Mercury General 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 Mercury General
What is a Organization for Mercury General? Defining Organization in VRIO
Even if the Mercury General 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 Mercury General 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 |
---|---|---|---|---|---|
Distribution and Logistics Costs Competitiveness | Yes, as it helps Mercury General in delivering lower costs | No | Can be imitated by competitors of Mercury General but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Ability to Attract Talent in Various Local & Global Markets | Yes, Mercury General 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 Mercury General | To a large extent yes | Providing Strong Competitive Advantage |
Successful Implementation of Digital Strategy at Mercury General | 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 |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of Mercury General | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Pricing Strategies of Mercury General | Yes, Mercury General has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Mercury General with a Temporary Competitive Advantage |
Brand awareness of Mercury General products and services | Yes, the brand awareness of Mercury General products are high | Yes, Mercury General has one of the leading brand in the industry | No | Mercury General has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Opportunities in the E-Commerce Space for Mercury General - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Mercury General 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 |
Marketing Expertise within Mercury General | 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 Mercury General are often matched by competitors | Yes, Mercury General is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Access to Cheap Capital for Mercury General | Yes, as a leading player in the industry and current macro economic conditions, Mercury General has access to cheap capital | No | Can be imitated by the competitors of Mercury General | Not been totally exploited | Not significant in creating competitive advantage |
Alignment of Activities with Mercury General 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 |
Mercury General 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 Mercury General | Mercury General is leveraging the customer loyalty to good effect | Provide Mercury General medium term competitive advantage |
Opportunities for Brand Extensions for Mercury General 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 |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with Mercury General dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Track Record of Project Execution | Yes, especially in an industry where there are frequent cost overun | Yes, especially in the segment that Mercury General operates in | No, none of the competitors so far has able to imitate this expertise | Yes, Mercury General is successful at it | Providing Strong Competitive Advantage |
Mercury General 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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