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Toro 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 Toro to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Toro? Defining Valuable in VRIO
A resource or capability is considered valuable for Toro , if it allows the
Toro to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Toro to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Toro.
What are Rare Resources for Toro? Defining Rare in VRIO
In an industry that Toro operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Toro require rare resources to compete in the industry. If Toro don’t have rare resources that are required to succeed in the industry then Toro won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Toro competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Toro? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Toro 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. Toro 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 Toro
What is a Organization for Toro? Defining Organization in VRIO
Even if the Toro 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 Toro 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 Toro 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 |
Financial Resources of Toro | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Toro has reasonably sound financial position | Toro has relatively sustainable Competitive Advantage |
Toro 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 Toro | Toro is leveraging the customer loyalty to good effect | Provide Toro medium term competitive advantage |
Supply Chain Network Flexibility of Toro | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Toro organizational structure and capabilities | Keeps the business running |
Brand awareness of Toro products and services | Yes, the brand awareness of Toro products are high | Yes, Toro has one of the leading brand in the industry | No | Toro has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Global and Local Presence of Toro | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Toro but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of Toro | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with Toro dominant market position | Can be imitated by competitors | Yes | Providing 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 Toro operates in | No, none of the competitors so far has able to imitate this expertise | Yes, Toro is successful at it | Providing Strong Competitive Advantage |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Sales Force and Channel Management of Toro | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide Toro sustainable competitive advantage. Potential is certainly there. |
Opportunities in the E-Commerce Space for Toro - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Toro 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 Toro in delivering lower costs | No | Can be imitated by competitors of Toro but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Access to Cheap Capital for Toro | Yes, as a leading player in the industry and current macro economic conditions, Toro has access to cheap capital | No | Can be imitated by the competitors of Toro | Not been totally exploited | Not significant in creating competitive advantage |
Toro 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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