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Cliffs Natural Resources 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 Cliffs Natural Resources to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Cliffs Natural Resources? Defining Valuable in VRIO
A resource or capability is considered valuable for Cliffs Natural Resources , if it allows the
Cliffs Natural Resources to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Cliffs Natural Resources to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Cliffs Natural Resources.
What are Rare Resources for Cliffs Natural Resources? Defining Rare in VRIO
In an industry that Cliffs Natural Resources operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Cliffs Natural Resources require rare resources to compete in the industry. If Cliffs Natural Resources don’t have rare resources that are required to succeed in the industry then Cliffs Natural Resources won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Cliffs Natural Resources competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Cliffs Natural Resources? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Cliffs Natural Resources 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. Cliffs Natural Resources 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 Cliffs Natural Resources
What is a Organization for Cliffs Natural Resources? Defining Organization in VRIO
Even if the Cliffs Natural Resources 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 Cliffs Natural Resources 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 |
---|---|---|---|---|---|
Opportunities for Brand Extensions for Cliffs Natural Resources 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 |
Cliffs Natural Resources 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 Cliffs Natural Resources | Cliffs Natural Resources is leveraging the customer loyalty to good effect | Provide Cliffs Natural Resources medium term competitive advantage |
Access to Cheap Capital for Cliffs Natural Resources | Yes, as a leading player in the industry and current macro economic conditions, Cliffs Natural Resources has access to cheap capital | No | Can be imitated by the competitors of Cliffs Natural Resources | Not been totally exploited | Not significant in creating competitive advantage |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for Cliffs Natural Resources to thwart competition | Yes, IPR and other rights are rare and competition of Cliffs Natural Resources 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 |
Track Record of Project Execution | Yes, especially in an industry where there are frequent cost overun | Yes, especially in the segment that Cliffs Natural Resources operates in | No, none of the competitors so far has able to imitate this expertise | Yes, Cliffs Natural Resources is successful at it | Providing Strong Competitive Advantage |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of Cliffs Natural Resources | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Supply Chain Network Flexibility of Cliffs Natural Resources | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Cliffs Natural Resources organizational structure and capabilities | Keeps the business running |
Opportunities in the E-Commerce Space for Cliffs Natural Resources - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Cliffs Natural Resources 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 |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Cliffs Natural Resources in delivering lower costs | No | Can be imitated by competitors of Cliffs Natural Resources but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Opportunities in the Adjacent Industries that Cliffs Natural Resources 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 |
Sales Force and Channel Management of Cliffs Natural Resources | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide Cliffs Natural Resources sustainable competitive advantage. Potential is certainly there. |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Ability to Attract Talent in Various Local & Global Markets | Yes, Cliffs Natural Resources 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 Cliffs Natural Resources | To a large extent yes | Providing Strong Competitive Advantage |
Position among Retailers and Wholesalers – Cliffs Natural Resources retail strategy | Yes, Cliffs Natural Resources has strong relationship with retailers and wholesalers | Yes, Cliffs Natural Resources has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Cliffs Natural Resources 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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