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World Fuel Services 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 World Fuel Services to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for World Fuel Services? Defining Valuable in VRIO
A resource or capability is considered valuable for World Fuel Services , if it allows the
World Fuel Services to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow World Fuel Services to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for World Fuel Services.
What are Rare Resources for World Fuel Services? Defining Rare in VRIO
In an industry that World Fuel Services operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. World Fuel Services require rare resources to compete in the industry. If World Fuel Services don’t have rare resources that are required to succeed in the industry then World Fuel Services won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide World Fuel Services competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for World Fuel Services? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to World Fuel Services 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. World Fuel Services 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 World Fuel Services
What is a Organization for World Fuel Services? Defining Organization in VRIO
Even if the World Fuel Services 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 World Fuel Services 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 |
---|---|---|---|---|---|
Sales Force and Channel Management of World Fuel Services | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide World Fuel Services sustainable competitive advantage. Potential is certainly there. |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of World Fuel Services | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Customer Community of World Fuel Services | Yes, as customers are co-creating products | Yes, the World Fuel Services has able to build a special relationship with its customers | It is very difficult for World Fuel Services competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on World Fuel Services customers community ecosystem | Providing Strong Competitive Advantage |
Marketing Expertise within World Fuel Services | 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 World Fuel Services are often matched by competitors | Yes, World Fuel Services is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Brand Positioning of World Fuel Services 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 |
Distribution and Logistics Costs Competitiveness | Yes, as it helps World Fuel Services in delivering lower costs | No | Can be imitated by competitors of World Fuel Services but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Alignment of Activities with World Fuel Services 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 |
Position among Retailers and Wholesalers – World Fuel Services retail strategy | Yes, World Fuel Services has strong relationship with retailers and wholesalers | Yes, World Fuel Services has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Opportunities for Brand Extensions for World Fuel Services 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 |
Track Record of Leadership Team at World Fuel Services | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Brand awareness of World Fuel Services products and services | Yes, the brand awareness of World Fuel Services products are high | Yes, World Fuel Services has one of the leading brand in the industry | No | World Fuel Services has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Supply Chain Network Flexibility of World Fuel Services | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by World Fuel Services organizational structure and capabilities | Keeps the business running |
Product Portfolio and Synergy among Various Product Lines of World Fuel Services | 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 |
World Fuel Services 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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