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Mettler-Toledo International 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 Mettler-Toledo International to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Mettler-Toledo International? Defining Valuable in VRIO
A resource or capability is considered valuable for Mettler-Toledo International , if it allows the
Mettler-Toledo International to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Mettler-Toledo International to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Mettler-Toledo International.
What are Rare Resources for Mettler-Toledo International? Defining Rare in VRIO
In an industry that Mettler-Toledo International operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Mettler-Toledo International require rare resources to compete in the industry. If Mettler-Toledo International don’t have rare resources that are required to succeed in the industry then Mettler-Toledo International won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Mettler-Toledo International competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Mettler-Toledo International? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Mettler-Toledo International 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. Mettler-Toledo International 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 Mettler-Toledo International
What is a Organization for Mettler-Toledo International? Defining Organization in VRIO
Even if the Mettler-Toledo International 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 Mettler-Toledo International 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 |
---|---|---|---|---|---|
Brand awareness of Mettler-Toledo International products and services | Yes, the brand awareness of Mettler-Toledo International products are high | Yes, Mettler-Toledo International has one of the leading brand in the industry | No | Mettler-Toledo International has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Mettler-Toledo International in delivering lower costs | No | Can be imitated by competitors of Mettler-Toledo International but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Supply Chain Network Flexibility of Mettler-Toledo International | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Mettler-Toledo International organizational structure and capabilities | Keeps the business running |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of Mettler-Toledo International | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Sales Force and Channel Management of Mettler-Toledo International | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide Mettler-Toledo International sustainable competitive advantage. Potential is certainly there. |
Mettler-Toledo International 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 Mettler-Toledo International | Mettler-Toledo International is leveraging the customer loyalty to good effect | Provide Mettler-Toledo International medium term competitive advantage |
Customer Community of Mettler-Toledo International | Yes, as customers are co-creating products | Yes, the Mettler-Toledo International has able to build a special relationship with its customers | It is very difficult for Mettler-Toledo International competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Mettler-Toledo International customers community ecosystem | Providing Strong Competitive Advantage |
Opportunities in the Adjacent Industries that Mettler-Toledo International 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 |
Marketing Expertise within Mettler-Toledo International | 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 Mettler-Toledo International are often matched by competitors | Yes, Mettler-Toledo International is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Opportunities for Brand Extensions for Mettler-Toledo International 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 |
Product Portfolio and Synergy among Various Product Lines of Mettler-Toledo International | 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 |
Successful Implementation of Digital Strategy at Mettler-Toledo International | 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 |
Pricing Strategies of Mettler-Toledo International | Yes, Mettler-Toledo International has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Mettler-Toledo International with a Temporary Competitive Advantage |
Brand Positioning of Mettler-Toledo International 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 |
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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