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MPM Holdings 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 MPM Holdings to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for MPM Holdings? Defining Valuable in VRIO
A resource or capability is considered valuable for MPM Holdings , if it allows the
MPM Holdings to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow MPM Holdings to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for MPM Holdings.
What are Rare Resources for MPM Holdings? Defining Rare in VRIO
In an industry that MPM Holdings operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. MPM Holdings require rare resources to compete in the industry. If MPM Holdings don’t have rare resources that are required to succeed in the industry then MPM Holdings won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide MPM Holdings competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for MPM Holdings? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to MPM Holdings 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. MPM Holdings 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 MPM Holdings
What is a Organization for MPM Holdings? Defining Organization in VRIO
Even if the MPM Holdings 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 MPM Holdings 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 |
---|---|---|---|---|---|
Position among Retailers and Wholesalers – MPM Holdings retail strategy | Yes, MPM Holdings has strong relationship with retailers and wholesalers | Yes, MPM Holdings has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Brand Positioning of MPM Holdings 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 |
Marketing Expertise within MPM Holdings | 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 MPM Holdings are often matched by competitors | Yes, MPM Holdings is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Supply Chain Network Flexibility of MPM Holdings | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by MPM Holdings organizational structure and capabilities | Keeps the business running |
Global and Local Presence of MPM Holdings | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of MPM Holdings 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 MPM Holdings operates in | No, none of the competitors so far has able to imitate this expertise | Yes, MPM Holdings is successful at it | Providing Strong Competitive Advantage |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with MPM Holdings dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of MPM Holdings | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Financial Resources of MPM Holdings | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | MPM Holdings has reasonably sound financial position | MPM Holdings has relatively sustainable Competitive Advantage |
Access to Cheap Capital for MPM Holdings | Yes, as a leading player in the industry and current macro economic conditions, MPM Holdings has access to cheap capital | No | Can be imitated by the competitors of MPM Holdings | Not been totally exploited | Not significant in creating competitive advantage |
Ability to Attract Talent in Various Local & Global Markets | Yes, MPM Holdings 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 MPM Holdings | To a large extent yes | Providing Strong Competitive Advantage |
Distribution and Logistics Costs Competitiveness | Yes, as it helps MPM Holdings in delivering lower costs | No | Can be imitated by competitors of MPM Holdings but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Brand awareness of MPM Holdings products and services | Yes, the brand awareness of MPM Holdings products are high | Yes, MPM Holdings has one of the leading brand in the industry | No | MPM Holdings has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Track Record of Leadership Team at MPM Holdings | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
MPM Holdings 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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