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CHS 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 CHS to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for CHS? Defining Valuable in VRIO
A resource or capability is considered valuable for CHS , if it allows the
CHS to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow CHS to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for CHS.
What are Rare Resources for CHS? Defining Rare in VRIO
In an industry that CHS operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. CHS require rare resources to compete in the industry. If CHS don’t have rare resources that are required to succeed in the industry then CHS won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide CHS competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for CHS? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to CHS 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. CHS 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 CHS
What is a Organization for CHS? Defining Organization in VRIO
Even if the CHS 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 CHS 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 CHS | 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 |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Customer Community of CHS | Yes, as customers are co-creating products | Yes, the CHS has able to build a special relationship with its customers | It is very difficult for CHS competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on CHS customers community ecosystem | Providing Strong Competitive Advantage |
Financial Resources of CHS | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | CHS has reasonably sound financial position | CHS has relatively sustainable Competitive Advantage |
Sales Force and Channel Management of CHS | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide CHS sustainable competitive advantage. Potential is certainly there. |
Brand awareness of CHS products and services | Yes, the brand awareness of CHS products are high | Yes, CHS has one of the leading brand in the industry | No | CHS has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Opportunities for Brand Extensions for CHS 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 |
Pricing Strategies of CHS | Yes, CHS has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide CHS with a Temporary Competitive Advantage |
Position among Retailers and Wholesalers – CHS retail strategy | Yes, CHS has strong relationship with retailers and wholesalers | Yes, CHS has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Successful Implementation of Digital Strategy at CHS | Yes, without a comprehensive digital strategy it is extremely difficult to compete | No, as most of the firms are investing into digitalizing operations | Can be imitated by competitors | One of the leading player in the industry | Digital strategy has become critical in the industry but it can't provide sustainable competitive advantage to |
Global and Local Presence of CHS | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of CHS but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | 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 CHS operates in | No, none of the competitors so far has able to imitate this expertise | Yes, CHS is successful at it | Providing Strong Competitive Advantage |
Access to Cheap Capital for CHS | Yes, as a leading player in the industry and current macro economic conditions, CHS has access to cheap capital | No | Can be imitated by the competitors of CHS | Not been totally exploited | Not significant in creating competitive advantage |
Marketing Expertise within CHS | 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 CHS are often matched by competitors | Yes, CHS is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
CHS 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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