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Convergys 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 Convergys to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Convergys? Defining Valuable in VRIO
A resource or capability is considered valuable for Convergys , if it allows the
Convergys to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Convergys to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Convergys.
What are Rare Resources for Convergys? Defining Rare in VRIO
In an industry that Convergys operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Convergys require rare resources to compete in the industry. If Convergys don’t have rare resources that are required to succeed in the industry then Convergys won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Convergys competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Convergys? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Convergys 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. Convergys 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 Convergys
What is a Organization for Convergys? Defining Organization in VRIO
Even if the Convergys 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 Convergys 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 |
---|---|---|---|---|---|
Product Portfolio and Synergy among Various Product Lines of Convergys | 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 |
Pricing Strategies of Convergys | Yes, Convergys has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Convergys with a Temporary Competitive Advantage |
Opportunities for Brand Extensions for Convergys 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 |
Customer Community of Convergys | Yes, as customers are co-creating products | Yes, the Convergys has able to build a special relationship with its customers | It is very difficult for Convergys competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Convergys customers community ecosystem | Providing Strong Competitive Advantage |
Access to Cheap Capital for Convergys | Yes, as a leading player in the industry and current macro economic conditions, Convergys has access to cheap capital | No | Can be imitated by the competitors of Convergys | Not been totally exploited | Not significant in creating competitive advantage |
Global and Local Presence of Convergys | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Convergys but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Brand awareness of Convergys products and services | Yes, the brand awareness of Convergys products are high | Yes, Convergys has one of the leading brand in the industry | No | Convergys 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 Convergys | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Opportunities in the Adjacent Industries that Convergys 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 |
Sales Force and Channel Management of Convergys | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide Convergys sustainable competitive advantage. Potential is certainly there. |
Financial Resources of Convergys | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Convergys has reasonably sound financial position | Convergys has relatively sustainable Competitive Advantage |
Convergys 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 Convergys | Convergys is leveraging the customer loyalty to good effect | Provide Convergys medium term competitive advantage |
Supply Chain Network Flexibility of Convergys | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Convergys organizational structure and capabilities | Keeps the business running |
Ability to Attract Talent in Various Local & Global Markets | Yes, Convergys 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 Convergys | To a large extent yes | Providing Strong Competitive Advantage |
Convergys 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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