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Schnitzer Steel Industries 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 Schnitzer Steel Industries to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Schnitzer Steel Industries? Defining Valuable in VRIO
A resource or capability is considered valuable for Schnitzer Steel Industries , if it allows the
Schnitzer Steel Industries to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Schnitzer Steel Industries to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Schnitzer Steel Industries.
What are Rare Resources for Schnitzer Steel Industries? Defining Rare in VRIO
In an industry that Schnitzer Steel Industries operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Schnitzer Steel Industries require rare resources to compete in the industry. If Schnitzer Steel Industries don’t have rare resources that are required to succeed in the industry then Schnitzer Steel Industries won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Schnitzer Steel Industries competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Schnitzer Steel Industries? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Schnitzer Steel Industries 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. Schnitzer Steel Industries 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 Schnitzer Steel Industries
What is a Organization for Schnitzer Steel Industries? Defining Organization in VRIO
Even if the Schnitzer Steel Industries 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 Schnitzer Steel Industries 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 |
---|---|---|---|---|---|
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for Schnitzer Steel Industries to thwart competition | Yes, IPR and other rights are rare and competition of Schnitzer Steel Industries 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 |
Ability to Attract Talent in Various Local & Global Markets | Yes, Schnitzer Steel Industries 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 Schnitzer Steel Industries | To a large extent yes | Providing Strong Competitive Advantage |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with Schnitzer Steel Industries dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Brand Positioning of Schnitzer Steel Industries 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 |
Opportunities in the E-Commerce Space for Schnitzer Steel Industries - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Schnitzer Steel Industries 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 |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of Schnitzer Steel Industries | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Financial Resources of Schnitzer Steel Industries | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Schnitzer Steel Industries has reasonably sound financial position | Schnitzer Steel Industries has relatively sustainable Competitive Advantage |
Supply Chain Network Flexibility of Schnitzer Steel Industries | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Schnitzer Steel Industries organizational structure and capabilities | Keeps the business running |
Customer Community of Schnitzer Steel Industries | Yes, as customers are co-creating products | Yes, the Schnitzer Steel Industries has able to build a special relationship with its customers | It is very difficult for Schnitzer Steel Industries competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Schnitzer Steel Industries customers community ecosystem | Providing Strong Competitive Advantage |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Opportunities for Brand Extensions for Schnitzer Steel Industries 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 Schnitzer Steel Industries in delivering lower costs | No | Can be imitated by competitors of Schnitzer Steel Industries but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Position among Retailers and Wholesalers – Schnitzer Steel Industries retail strategy | Yes, Schnitzer Steel Industries has strong relationship with retailers and wholesalers | Yes, Schnitzer Steel Industries has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Schnitzer Steel Industries 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 Schnitzer Steel Industries | Schnitzer Steel Industries is leveraging the customer loyalty to good effect | Provide Schnitzer Steel Industries medium term competitive advantage |
Schnitzer Steel Industries 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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