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MDC 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 MDC Holdings to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for MDC Holdings? Defining Valuable in VRIO
A resource or capability is considered valuable for MDC Holdings , if it allows the
MDC 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 MDC Holdings to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for MDC Holdings.
What are Rare Resources for MDC Holdings? Defining Rare in VRIO
In an industry that MDC Holdings operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. MDC Holdings require rare resources to compete in the industry. If MDC Holdings don’t have rare resources that are required to succeed in the industry then MDC Holdings won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide MDC 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 MDC Holdings? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to MDC 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. MDC 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 MDC Holdings
What is a Organization for MDC Holdings? Defining Organization in VRIO
Even if the MDC 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 MDC 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 |
---|---|---|---|---|---|
Marketing Expertise within MDC Holdings | 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 MDC Holdings are often matched by competitors | Yes, MDC Holdings is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Ability to Attract Talent in Various Local & Global Markets | Yes, MDC 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 MDC Holdings | To a large extent yes | Providing Strong Competitive Advantage |
Pricing Strategies of MDC Holdings | Yes, MDC 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 MDC Holdings with a Temporary Competitive Advantage |
MDC 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 MDC Holdings | MDC Holdings is leveraging the customer loyalty to good effect | Provide MDC Holdings medium term competitive advantage |
Access to Cheap Capital for MDC Holdings | Yes, as a leading player in the industry and current macro economic conditions, MDC Holdings has access to cheap capital | No | Can be imitated by the competitors of MDC Holdings | Not been totally exploited | Not significant in creating competitive advantage |
Opportunities in the E-Commerce Space for MDC Holdings - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and MDC 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 |
Alignment of Activities with MDC Holdings 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 |
Opportunities in the Adjacent Industries that MDC Holdings 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 |
Financial Resources of MDC Holdings | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | MDC Holdings has reasonably sound financial position | MDC Holdings has relatively sustainable Competitive Advantage |
Brand awareness of MDC Holdings products and services | Yes, the brand awareness of MDC Holdings products are high | Yes, MDC Holdings has one of the leading brand in the industry | No | MDC Holdings has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Distribution and Logistics Costs Competitiveness | Yes, as it helps MDC Holdings in delivering lower costs | No | Can be imitated by competitors of MDC Holdings but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Supply Chain Network Flexibility of MDC Holdings | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by MDC Holdings organizational structure and capabilities | Keeps the business running |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for MDC Holdings to thwart competition | Yes, IPR and other rights are rare and competition of MDC Holdings 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 |
Customer Community of MDC Holdings | Yes, as customers are co-creating products | Yes, the MDC Holdings has able to build a special relationship with its customers | It is very difficult for MDC Holdings competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on MDC Holdings customers community ecosystem | Providing Strong Competitive Advantage |
MDC Holdings 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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