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Microchip Technology 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 Microchip Technology to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Microchip Technology? Defining Valuable in VRIO
A resource or capability is considered valuable for Microchip Technology , if it allows the
Microchip Technology to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Microchip Technology to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Microchip Technology.
What are Rare Resources for Microchip Technology? Defining Rare in VRIO
In an industry that Microchip Technology operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Microchip Technology require rare resources to compete in the industry. If Microchip Technology don’t have rare resources that are required to succeed in the industry then Microchip Technology won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Microchip Technology competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Microchip Technology? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Microchip Technology 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. Microchip Technology 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 Microchip Technology
What is a Organization for Microchip Technology? Defining Organization in VRIO
Even if the Microchip Technology 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 Microchip Technology 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 |
---|---|---|---|---|---|
Pricing Strategies of Microchip Technology | Yes, Microchip Technology has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Microchip Technology with a Temporary Competitive Advantage |
Customer Community of Microchip Technology | Yes, as customers are co-creating products | Yes, the Microchip Technology has able to build a special relationship with its customers | It is very difficult for Microchip Technology competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Microchip Technology customers community ecosystem | Providing Strong Competitive Advantage |
Brand Positioning of Microchip Technology 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 |
Sales Force and Channel Management of Microchip Technology | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide Microchip Technology sustainable competitive advantage. Potential is certainly there. |
Opportunities in the Adjacent Industries that Microchip Technology 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 |
Ability to Attract Talent in Various Local & Global Markets | Yes, Microchip Technology 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 Microchip Technology | To a large extent yes | Providing Strong Competitive Advantage |
Access to Cheap Capital for Microchip Technology | Yes, as a leading player in the industry and current macro economic conditions, Microchip Technology has access to cheap capital | No | Can be imitated by the competitors of Microchip Technology | Not been totally exploited | Not significant in creating competitive advantage |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Microchip Technology in delivering lower costs | No | Can be imitated by competitors of Microchip Technology but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of Microchip Technology | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Track Record of Leadership Team at Microchip Technology | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Financial Resources of Microchip Technology | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Microchip Technology has reasonably sound financial position | Microchip Technology has relatively sustainable Competitive Advantage |
Microchip Technology 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 Microchip Technology | Microchip Technology is leveraging the customer loyalty to good effect | Provide Microchip Technology medium term competitive advantage |
Supply Chain Network Flexibility of Microchip Technology | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Microchip Technology organizational structure and capabilities | Keeps the business running |
Position among Retailers and Wholesalers – Microchip Technology retail strategy | Yes, Microchip Technology has strong relationship with retailers and wholesalers | Yes, Microchip Technology has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Microchip Technology 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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