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Olin 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 Olin to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Olin? Defining Valuable in VRIO
A resource or capability is considered valuable for Olin , if it allows the
Olin to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Olin to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Olin.
What are Rare Resources for Olin? Defining Rare in VRIO
In an industry that Olin operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Olin require rare resources to compete in the industry. If Olin don’t have rare resources that are required to succeed in the industry then Olin won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Olin competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Olin? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Olin 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. Olin 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 Olin
What is a Organization for Olin? Defining Organization in VRIO
Even if the Olin 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 Olin 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 |
---|---|---|---|---|---|
Customer Community of Olin | Yes, as customers are co-creating products | Yes, the Olin has able to build a special relationship with its customers | It is very difficult for Olin competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Olin customers community ecosystem | 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 Olin operates in | No, none of the competitors so far has able to imitate this expertise | Yes, Olin 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 Olin dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Global and Local Presence of Olin | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Olin but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Access to Cheap Capital for Olin | Yes, as a leading player in the industry and current macro economic conditions, Olin has access to cheap capital | No | Can be imitated by the competitors of Olin | Not been totally exploited | Not significant in creating competitive advantage |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Brand Positioning of Olin 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 |
Olin 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 Olin | Olin is leveraging the customer loyalty to good effect | Provide Olin medium term competitive advantage |
Financial Resources of Olin | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Olin has reasonably sound financial position | Olin has relatively sustainable Competitive Advantage |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for Olin to thwart competition | Yes, IPR and other rights are rare and competition of Olin 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 |
Product Portfolio and Synergy among Various Product Lines of Olin | 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 |
Position among Retailers and Wholesalers – Olin retail strategy | Yes, Olin has strong relationship with retailers and wholesalers | Yes, Olin has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Track Record of Leadership Team at Olin | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Ability to Attract Talent in Various Local & Global Markets | Yes, Olin 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 Olin | To a large extent yes | Providing Strong Competitive Advantage |
Olin 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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