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West 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 West to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for West? Defining Valuable in VRIO
A resource or capability is considered valuable for West , if it allows the
West to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow West to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for West.
What are Rare Resources for West? Defining Rare in VRIO
In an industry that West operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. West require rare resources to compete in the industry. If West don’t have rare resources that are required to succeed in the industry then West won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide West competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for West? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to West 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. West 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 West
What is a Organization for West? Defining Organization in VRIO
Even if the West 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 West 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 |
---|---|---|---|---|---|
Successful Implementation of Digital Strategy at West | 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 |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Opportunities in the E-Commerce Space for West - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and West 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 |
Brand awareness of West products and services | Yes, the brand awareness of West products are high | Yes, West has one of the leading brand in the industry | No | West has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Opportunities in the Adjacent Industries that West 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 |
Track Record of Project Execution | Yes, especially in an industry where there are frequent cost overun | Yes, especially in the segment that West operates in | No, none of the competitors so far has able to imitate this expertise | Yes, West is successful at it | Providing Strong Competitive Advantage |
Brand Positioning of West 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 |
Opportunities for Brand Extensions for West 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 |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of West | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Ability to Attract Talent in Various Local & Global Markets | Yes, West 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 West | To a large extent yes | Providing Strong Competitive Advantage |
Position among Retailers and Wholesalers – West retail strategy | Yes, West has strong relationship with retailers and wholesalers | Yes, West has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Track Record of Leadership Team at West | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Access to Cheap Capital for West | Yes, as a leading player in the industry and current macro economic conditions, West has access to cheap capital | No | Can be imitated by the competitors of West | Not been totally exploited | Not significant in creating competitive advantage |
Product Portfolio and Synergy among Various Product Lines of West | 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 |
West 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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