Arch Coal 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 Arch Coal to do better resource allocation and build a defensible value and supply chain.

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What is a Valuable Resource for Arch Coal? Defining Valuable in VRIO

A resource or capability is considered valuable for Arch Coal , if it allows the Arch Coal to exploit opportunities or negate threats emerging out of both the micro business environment and the macro environment. If a resource does not allow Arch Coal to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Arch Coal.

What are Rare Resources for Arch Coal? Defining Rare in VRIO

In an industry that Arch Coal operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Arch Coal require rare resources to compete in the industry. If Arch Coal don’t have rare resources that are required to succeed in the industry then Arch Coal won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Arch Coal competitive advantage against players that don’t have those rare resources. HBR Case Study Solution

What is a Inimitable (Difficult to Immitate) Resource for Arch Coal? Defining Inimitable in VRIO

A valuable and rare resource can provide a competitive advantage to Arch Coal 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. Arch Coal 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 Arch Coal

What is a Organization for Arch Coal? Defining Organization in VRIO

Even if the Arch Coal 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 Arch Coal 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 Arch Coal	Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles	Yes	Can be imitated by competitors of Arch Coal but at a relatively high cost	Yes, it is one of the most diversified companies in its industry	Providing Strong Competitive Advantage
Intellectual Property Rights, Copyrights, and Trademarks	Yes, they are extremely valuable for Arch Coal to thwart competition	Yes, IPR and other rights are rare and competition of Arch Coal 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
Pricing Strategies of Arch Coal	Yes, Arch Coal has sound pricing strategies	No	Pricing strategies are regularly imitated in the industry	Yes, firm has a pricing analytics engine	It can only provide Arch Coal with a Temporary Competitive Advantage
Alignment of Activities with Arch Coal 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
Brand awareness of Arch Coal products and services	Yes, the brand awareness of Arch Coal products are high	Yes, Arch Coal has one of the leading brand in the industry	No	Arch Coal has utilized its leading brand position in various segments	Sustainable Competitive Advantage
Sales Force and Channel Management of Arch Coal	Yes	No	Can be imitated by competitors	Still there is lot of potential to utilize the excellent sales force	Can provide Arch Coal sustainable competitive advantage. Potential is certainly there.
Brand Positioning of Arch Coal 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
Vision of the Leadership for Next Set of Challenges	Yes	No	Can't be imitated by competitors of Arch Coal	Not based on information provided in the case	Can Lead to Strong Competitive Advantage
Position among Retailers and Wholesalers – Arch Coal retail strategy	Yes, Arch Coal has strong relationship with retailers and wholesalers	Yes, Arch Coal has dedicated channel partners	Difficult to imitate though not impossible	Yes, over the years company has used it successfully	Sustainable Competitive Advantage
Arch Coal 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 Arch Coal	Arch Coal is leveraging the customer loyalty to good effect	Provide Arch Coal medium term competitive advantage
Supply Chain Network Flexibility of Arch Coal	Yes	Yes	Near competitors also have flexible supply chain and share some of the suppliers	Fully utilized by Arch Coal organizational structure and capabilities	Keeps the business running
Opportunities in the Adjacent Industries that Arch Coal 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
Financial Resources of Arch Coal	Yes	No	Financial instruments and market liquidity are available to all the nearest competitors	Arch Coal has reasonably sound financial position	Arch Coal has relatively 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 Arch Coal operates in	No, none of the competitors so far has able to imitate this expertise	Yes, Arch Coal is successful at it	Providing Strong Competitive Advantage

Arch Coal 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