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ArcBest 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 ArcBest to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for ArcBest? Defining Valuable in VRIO
A resource or capability is considered valuable for ArcBest , if it allows the
ArcBest to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow ArcBest to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for ArcBest.
What are Rare Resources for ArcBest? Defining Rare in VRIO
In an industry that ArcBest operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. ArcBest require rare resources to compete in the industry. If ArcBest don’t have rare resources that are required to succeed in the industry then ArcBest won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide ArcBest competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for ArcBest? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to ArcBest 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. ArcBest 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 ArcBest
What is a Organization for ArcBest? Defining Organization in VRIO
Even if the ArcBest 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 ArcBest 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 |
---|---|---|---|---|---|
Track Record of Project Execution | Yes, especially in an industry where there are frequent cost overun | Yes, especially in the segment that ArcBest operates in | No, none of the competitors so far has able to imitate this expertise | Yes, ArcBest is successful at it | Providing Strong Competitive Advantage |
Supply Chain Network Flexibility of ArcBest | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by ArcBest organizational structure and capabilities | Keeps the business running |
ArcBest 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 ArcBest | ArcBest is leveraging the customer loyalty to good effect | Provide ArcBest medium term competitive advantage |
Financial Resources of ArcBest | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | ArcBest has reasonably sound financial position | ArcBest has relatively sustainable Competitive Advantage |
Product Portfolio and Synergy among Various Product Lines of ArcBest | 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 |
Customer Community of ArcBest | Yes, as customers are co-creating products | Yes, the ArcBest has able to build a special relationship with its customers | It is very difficult for ArcBest competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on ArcBest customers community ecosystem | Providing Strong Competitive Advantage |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for ArcBest to thwart competition | Yes, IPR and other rights are rare and competition of ArcBest 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 |
Brand awareness of ArcBest products and services | Yes, the brand awareness of ArcBest products are high | Yes, ArcBest has one of the leading brand in the industry | No | ArcBest has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Brand Positioning of ArcBest 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 |
Opportunities in the Adjacent Industries that ArcBest 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 |
Distribution and Logistics Costs Competitiveness | Yes, as it helps ArcBest in delivering lower costs | No | Can be imitated by competitors of ArcBest but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of ArcBest | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Pricing Strategies of ArcBest | Yes, ArcBest has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide ArcBest with a Temporary Competitive Advantage |
Opportunities for Brand Extensions for ArcBest 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 |
ArcBest 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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