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Amica Mutual Insurance 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 Amica Mutual Insurance to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Amica Mutual Insurance? Defining Valuable in VRIO
A resource or capability is considered valuable for Amica Mutual Insurance , if it allows the
Amica Mutual Insurance to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Amica Mutual Insurance to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Amica Mutual Insurance.
What are Rare Resources for Amica Mutual Insurance? Defining Rare in VRIO
In an industry that Amica Mutual Insurance operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Amica Mutual Insurance require rare resources to compete in the industry. If Amica Mutual Insurance don’t have rare resources that are required to succeed in the industry then Amica Mutual Insurance won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Amica Mutual Insurance competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Amica Mutual Insurance? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Amica Mutual Insurance 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. Amica Mutual Insurance 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 Amica Mutual Insurance
What is a Organization for Amica Mutual Insurance? Defining Organization in VRIO
Even if the Amica Mutual Insurance 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 Amica Mutual Insurance 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 |
---|---|---|---|---|---|
Amica Mutual Insurance 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 Amica Mutual Insurance | Amica Mutual Insurance is leveraging the customer loyalty to good effect | Provide Amica Mutual Insurance medium term competitive advantage |
Financial Resources of Amica Mutual Insurance | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Amica Mutual Insurance has reasonably sound financial position | Amica Mutual Insurance has relatively sustainable Competitive Advantage |
Opportunities in the E-Commerce Space for Amica Mutual Insurance - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Amica Mutual Insurance 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 |
Access to Cheap Capital for Amica Mutual Insurance | Yes, as a leading player in the industry and current macro economic conditions, Amica Mutual Insurance has access to cheap capital | No | Can be imitated by the competitors of Amica Mutual Insurance | Not been totally exploited | Not significant in creating competitive advantage |
Supply Chain Network Flexibility of Amica Mutual Insurance | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Amica Mutual Insurance organizational structure and capabilities | Keeps the business running |
Global and Local Presence of Amica Mutual Insurance | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Amica Mutual Insurance but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Ability to Attract Talent in Various Local & Global Markets | Yes, Amica Mutual Insurance 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 Amica Mutual Insurance | To a large extent yes | Providing Strong Competitive Advantage |
Opportunities for Brand Extensions for Amica Mutual Insurance 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 |
Brand Positioning of Amica Mutual Insurance 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 in the Adjacent Industries that Amica Mutual Insurance 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 |
Alignment of Activities with Amica Mutual Insurance Corporate Strategy | Yes | No | Each of the firm has its own strategy | Yes, company has organizational skills to extract the maximum out of it. | Still lots of potential to build on it |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Position among Retailers and Wholesalers – Amica Mutual Insurance retail strategy | Yes, Amica Mutual Insurance has strong relationship with retailers and wholesalers | Yes, Amica Mutual Insurance has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Brand awareness of Amica Mutual Insurance products and services | Yes, the brand awareness of Amica Mutual Insurance products are high | Yes, Amica Mutual Insurance has one of the leading brand in the industry | No | Amica Mutual Insurance has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Amica Mutual Insurance 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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