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Meritage Homes 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 Meritage Homes to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Meritage Homes? Defining Valuable in VRIO
A resource or capability is considered valuable for Meritage Homes , if it allows the
Meritage Homes to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Meritage Homes to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Meritage Homes.
What are Rare Resources for Meritage Homes? Defining Rare in VRIO
In an industry that Meritage Homes operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Meritage Homes require rare resources to compete in the industry. If Meritage Homes don’t have rare resources that are required to succeed in the industry then Meritage Homes won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Meritage Homes competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Meritage Homes? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Meritage Homes 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. Meritage Homes 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 Meritage Homes
What is a Organization for Meritage Homes? Defining Organization in VRIO
Even if the Meritage Homes 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 Meritage Homes 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 |
---|---|---|---|---|---|
Global and Local Presence of Meritage Homes | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Meritage Homes but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Opportunities in the Adjacent Industries that Meritage Homes 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 |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for Meritage Homes to thwart competition | Yes, IPR and other rights are rare and competition of Meritage Homes 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 |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Meritage Homes in delivering lower costs | No | Can be imitated by competitors of Meritage Homes but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Brand Positioning of Meritage Homes 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 for Brand Extensions for Meritage Homes 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 Meritage Homes | Yes, as customers are co-creating products | Yes, the Meritage Homes has able to build a special relationship with its customers | It is very difficult for Meritage Homes competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Meritage Homes customers community ecosystem | Providing Strong Competitive Advantage |
Marketing Expertise within Meritage Homes | 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 Meritage Homes are often matched by competitors | Yes, Meritage Homes is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Track Record of Leadership Team at Meritage Homes | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Position among Retailers and Wholesalers – Meritage Homes retail strategy | Yes, Meritage Homes has strong relationship with retailers and wholesalers | Yes, Meritage Homes has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Financial Resources of Meritage Homes | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Meritage Homes has reasonably sound financial position | Meritage Homes has relatively sustainable Competitive Advantage |
Pricing Strategies of Meritage Homes | Yes, Meritage Homes has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Meritage Homes with a Temporary Competitive Advantage |
Opportunities in the E-Commerce Space for Meritage Homes - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Meritage Homes 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 |
Supply Chain Network Flexibility of Meritage Homes | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Meritage Homes organizational structure and capabilities | Keeps the business running |
Meritage Homes 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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