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Allison Transmission Holdings 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 Allison Transmission Holdings to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Allison Transmission Holdings? Defining Valuable in VRIO
A resource or capability is considered valuable for Allison Transmission Holdings , if it allows the
Allison Transmission Holdings to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Allison Transmission Holdings to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Allison Transmission Holdings.
What are Rare Resources for Allison Transmission Holdings? Defining Rare in VRIO
In an industry that Allison Transmission Holdings operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Allison Transmission Holdings require rare resources to compete in the industry. If Allison Transmission Holdings don’t have rare resources that are required to succeed in the industry then Allison Transmission Holdings won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Allison Transmission Holdings competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Allison Transmission Holdings? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Allison Transmission Holdings 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. Allison Transmission Holdings 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 Allison Transmission Holdings
What is a Organization for Allison Transmission Holdings? Defining Organization in VRIO
Even if the Allison Transmission Holdings 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 Allison Transmission Holdings 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 |
---|---|---|---|---|---|
Position among Retailers and Wholesalers – Allison Transmission Holdings retail strategy | Yes, Allison Transmission Holdings has strong relationship with retailers and wholesalers | Yes, Allison Transmission Holdings 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 Allison Transmission Holdings 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 |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Allison Transmission Holdings in delivering lower costs | No | Can be imitated by competitors of Allison Transmission Holdings but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Customer Community of Allison Transmission Holdings | Yes, as customers are co-creating products | Yes, the Allison Transmission Holdings has able to build a special relationship with its customers | It is very difficult for Allison Transmission Holdings competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Allison Transmission Holdings customers community ecosystem | Providing Strong Competitive Advantage |
Sales Force and Channel Management of Allison Transmission Holdings | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide Allison Transmission Holdings sustainable competitive advantage. Potential is certainly there. |
Track Record of Project Execution | Yes, especially in an industry where there are frequent cost overun | Yes, especially in the segment that Allison Transmission Holdings operates in | No, none of the competitors so far has able to imitate this expertise | Yes, Allison Transmission Holdings is successful at it | Providing Strong Competitive Advantage |
Successful Implementation of Digital Strategy at Allison Transmission Holdings | 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 |
Access to Cheap Capital for Allison Transmission Holdings | Yes, as a leading player in the industry and current macro economic conditions, Allison Transmission Holdings has access to cheap capital | No | Can be imitated by the competitors of Allison Transmission Holdings | Not been totally exploited | Not significant in creating competitive advantage |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with Allison Transmission Holdings dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Pricing Strategies of Allison Transmission Holdings | Yes, Allison Transmission Holdings has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Allison Transmission Holdings with a Temporary Competitive Advantage |
Ability to Attract Talent in Various Local & Global Markets | Yes, Allison Transmission Holdings 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 Allison Transmission Holdings | To a large extent yes | Providing Strong Competitive Advantage |
Financial Resources of Allison Transmission Holdings | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Allison Transmission Holdings has reasonably sound financial position | Allison Transmission Holdings has relatively sustainable Competitive Advantage |
Opportunities in the E-Commerce Space for Allison Transmission Holdings - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Allison Transmission Holdings 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 |
Allison Transmission Holdings 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 Allison Transmission Holdings | Allison Transmission Holdings is leveraging the customer loyalty to good effect | Provide Allison Transmission Holdings medium term competitive advantage |
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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