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Alliance One International 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 Alliance One International to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Alliance One International? Defining Valuable in VRIO
A resource or capability is considered valuable for Alliance One International , if it allows the
Alliance One International to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Alliance One International to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Alliance One International.
What are Rare Resources for Alliance One International? Defining Rare in VRIO
In an industry that Alliance One International operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Alliance One International require rare resources to compete in the industry. If Alliance One International don’t have rare resources that are required to succeed in the industry then Alliance One International won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Alliance One International competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Alliance One International? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Alliance One International 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. Alliance One International 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 Alliance One International
What is a Organization for Alliance One International? Defining Organization in VRIO
Even if the Alliance One International 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 Alliance One International 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 |
---|---|---|---|---|---|
Ability to Attract Talent in Various Local & Global Markets | Yes, Alliance One International 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 Alliance One International | To a large extent yes | Providing Strong Competitive Advantage |
Marketing Expertise within Alliance One International | 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 Alliance One International are often matched by competitors | Yes, Alliance One International is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Opportunities for Brand Extensions for Alliance One International 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 |
Supply Chain Network Flexibility of Alliance One International | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Alliance One International organizational structure and capabilities | Keeps the business running |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with Alliance One International dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Alignment of Activities with Alliance One International 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 |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for Alliance One International to thwart competition | Yes, IPR and other rights are rare and competition of Alliance One International will find it extremely difficult to copy | Risk of imitation is low but given the margins in the industry disruption chances are high | So far the firm has not utilized the full extent of its IPR & other properties | Providing Strong Competitive Advantage |
Pricing Strategies of Alliance One International | Yes, Alliance One International has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Alliance One International with a Temporary Competitive Advantage |
Sales Force and Channel Management of Alliance One International | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide Alliance One International sustainable competitive advantage. Potential is certainly there. |
Brand awareness of Alliance One International products and services | Yes, the brand awareness of Alliance One International products are high | Yes, Alliance One International has one of the leading brand in the industry | No | Alliance One International has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Opportunities in the E-Commerce Space for Alliance One International - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Alliance One International 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 |
Alliance One International 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 Alliance One International | Alliance One International is leveraging the customer loyalty to good effect | Provide Alliance One International medium term competitive advantage |
Financial Resources of Alliance One International | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Alliance One International has reasonably sound financial position | Alliance One International has relatively sustainable Competitive Advantage |
Product Portfolio and Synergy among Various Product Lines of Alliance One International | 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 |
Alliance One International 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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