Tower 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 Tower International to do better resource allocation and build a defensible value and supply chain.

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What is a Valuable Resource for Tower International? Defining Valuable in VRIO

A resource or capability is considered valuable for Tower International , if it allows the Tower 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 Tower International to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Tower International.

What are Rare Resources for Tower International? Defining Rare in VRIO

In an industry that Tower International operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Tower International require rare resources to compete in the industry. If Tower International don’t have rare resources that are required to succeed in the industry then Tower International won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Tower 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 Tower International? Defining Inimitable in VRIO

A valuable and rare resource can provide a competitive advantage to Tower 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. Tower 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 Tower International

What is a Organization for Tower International? Defining Organization in VRIO

Even if the Tower 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 Tower 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
Access to Critical Raw Material for Successful Execution	Yes	Yes, as other competitors have to come to terms with Tower International dominant market position	Can be imitated by competitors	Yes	Providing Sustainable Competitive Advantage
Marketing Expertise within Tower 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 Tower International are often matched by competitors	Yes, Tower International is leveraging both its inhouse marketing department and external expertise	Temporary Competitive Advantage
Intellectual Property Rights, Copyrights, and Trademarks	Yes, they are extremely valuable for Tower International to thwart competition	Yes, IPR and other rights are rare and competition of Tower 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
Successful Implementation of Digital Strategy at Tower International	Yes, without a comprehensive digital strategy it is extremely difficult to compete	No, as most of the firms are investing into digitalizing operations	Can be imitated by competitors	One of the leading player in the industry	Digital strategy has become critical in the industry but it can't provide sustainable competitive advantage to
Sales Force and Channel Management of Tower International	Yes	No	Can be imitated by competitors	Still there is lot of potential to utilize the excellent sales force	Can provide Tower International sustainable competitive advantage. Potential is certainly there.
Talent to Manage Regulatory and Legal Obligations	Yes	No	Can be imitated by competitors	Yes	Not critical factor
Opportunities in the Adjacent Industries that Tower International 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
Position among Retailers and Wholesalers – Tower International retail strategy	Yes, Tower International has strong relationship with retailers and wholesalers	Yes, Tower International has dedicated channel partners	Difficult to imitate though not impossible	Yes, over the years company has used it successfully	Sustainable Competitive Advantage
Product Portfolio and Synergy among Various Product Lines of Tower 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
Access to Cheap Capital for Tower International	Yes, as a leading player in the industry and current macro economic conditions, Tower International has access to cheap capital	No	Can be imitated by the competitors of Tower International	Not been totally exploited	Not significant in creating competitive advantage
Ability to Attract Talent in Various Local & Global Markets	Yes, Tower 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 Tower International	To a large extent yes	Providing Strong Competitive Advantage
Brand Positioning of Tower International 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
Global and Local Presence of Tower International	Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles	Yes	Can be imitated by competitors of Tower International but at a relatively high cost	Yes, it is one of the most diversified companies in its industry	Providing Strong Competitive Advantage
Track Record of Leadership Team at Tower International	Yes	Yes	Can't be imitated by competitors	Yes	Providing Strong Competitive Advantage

Tower 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