3M 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 3M to do better resource allocation and build a defensible value and supply chain.

Order a 3M VRIO / VRIN Analysis now

What is a Valuable Resource for 3M? Defining Valuable in VRIO

A resource or capability is considered valuable for 3M , if it allows the 3M to exploit opportunities or negate threats emerging out of both the micro business environment and the macro environment. If a resource does not allow 3M to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for 3M.

What are Rare Resources for 3M? Defining Rare in VRIO

In an industry that 3M operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. 3M require rare resources to compete in the industry. If 3M don’t have rare resources that are required to succeed in the industry then 3M won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide 3M competitive advantage against players that don’t have those rare resources. HBR Case Study Solution

What is a Inimitable (Difficult to Immitate) Resource for 3M? Defining Inimitable in VRIO

A valuable and rare resource can provide a competitive advantage to 3M 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. 3M 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 3M

What is a Organization for 3M? Defining Organization in VRIO

Even if the 3M 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 3M 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
Access to Critical Raw Material for Successful Execution	Yes	Yes, as other competitors have to come to terms with 3M dominant market position	Can be imitated by competitors	Yes	Providing Sustainable Competitive Advantage
Alignment of Activities with 3M 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
Opportunities in the Adjacent Industries that 3M 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
3M 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 3M	3M is leveraging the customer loyalty to good effect	Provide 3M medium term competitive advantage
Product Portfolio and Synergy among Various Product Lines of 3M	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
Customer Community of 3M	Yes, as customers are co-creating products	Yes, the 3M has able to build a special relationship with its customers	It is very difficult for 3M competitors to imitate the culture and community dedication	Going by the data, there is still a lot of upside in building on 3M customers community ecosystem	Providing Strong Competitive Advantage
Financial Resources of 3M	Yes	No	Financial instruments and market liquidity are available to all the nearest competitors	3M has reasonably sound financial position	3M has relatively sustainable Competitive Advantage
Opportunities in the E-Commerce Space for 3M - using Present IT Capabilities	Yes, the e-commerce space is rapidly growing and 3M 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 3M	Yes, as a leading player in the industry and current macro economic conditions, 3M has access to cheap capital	No	Can be imitated by the competitors of 3M	Not been totally exploited	Not significant in creating competitive advantage
Marketing Expertise within 3M	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 3M are often matched by competitors	Yes, 3M is leveraging both its inhouse marketing department and external expertise	Temporary Competitive Advantage
Track Record of Leadership Team at 3M	Yes	Yes	Can't be imitated by competitors	Yes	Providing Strong Competitive Advantage
Distribution and Logistics Costs Competitiveness	Yes, as it helps 3M in delivering lower costs	No	Can be imitated by competitors of 3M but it is difficult	Yes	Medium to Long Term Competitive Advantage
Pricing Strategies of 3M	Yes, 3M has sound pricing strategies	No	Pricing strategies are regularly imitated in the industry	Yes, firm has a pricing analytics engine	It can only provide 3M with a Temporary Competitive Advantage
Brand Positioning of 3M 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

3M 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