Competitors would have to invest a significant amount if they are to imitate a similar distribution system. HBR Case Study Solution, A valuable and rare resource can provide a competitive advantage to Uber for certain period of time as all the competitors are going to try to imitate or replicate that resource. Potential is certainly there. Dissertation case study is a Harvard Business School (HBR) case study written by Salvatore Cantale, Sarah Hutton. The SWOT analysis for Uber is presented below in the Matrix below followed by detailed analysis. The fourth and final VRIO criterion that determines whether a resource or capability is the source of competitive advantage recognizes that mere possession or control is necessary but not sufficient to gain an advantage. Intangible resources of Uber Disruptive are skill and administrative level of managers, brand names and goodwill of the company, intellectual property rights, copyrights, trademarks, and special relationship with supply chain partners. Feel free to connect with us if you need business research. This has been developed over the years gradually by Uber. Rather, the intention is to draw this out in small group or plenary discussions through the assignment questions. The distribution network of Uber is also very costly to imitate by competition as identified by the Uber VRIO Analysis. The patents are a source of unused competitive advantage. This ensures greater revenues for Uber Makes a Smart Bet with Uber Eats. It helps them explore and protect their resources and capabilities that can be utilised to gain a long-term competitive advantage over the competitors. The strategic tool facilitates the identification of a long term competitive advantage for the company through evaluating the internal resources and capabilities of . View Assignment - Uber VRIO.docx from BUSINESS MBAD 502 at Nairobi Aviation College, Nairobi Branch. The local food products are not that costly to imitate as identified by the VRIO Analysis of Uber Makes a Smart Bet with Uber Eats. The Uber VRIO Analysis shows that Ubers distribution network is a valuable resource. %PDF-1.4 Make sure you delineate each of the four components of the analysis. 5. Journal of Management, 19, 99120. Think of it in terms of whether the organization owns the capability. Economic factors: The industry that Uber operates in is the sharing economy. A resource is non substitutable if the competitors cant find alternative ways to gain the advantages that a resource provides. ~ 0.0 Page). Tangible resources of Uber Uber's include - physical entities, such as land, buildings, plant, equipment, inventory, and money. The report illustrates the application of the major analytical strategic frameworks in business studies such as SWOT, PESTEL, Porter's Five Forces, Ansoff Matrix and McKinsey 7S Model on Uber. This VRIO framework is the foundation for internal analysis. Therefore, research and development are a competitive disadvantage for Uber Makes a Smart Bet with Uber Eats. These companies can also hire employees from Uber by offering better compensation packages, work environment, benefits, growth opportunities etc. This means that competitors can use these resources in the same way as Uber and inhibit competitive advantage. The Uber VRIO Analysis shows that Uber's employees are a valuable resource to the firm. According to Salvatore Cantale, Sarah Hutton of the case study following are the critical resources that are valuable to the firm - financial resources, human resources, marketing expertise, and operations management. The key to build the sustainable competitive advantage is to have organizational capabilities, expertise, and structure to exploit the resources. Accordingly, we never encourage or endorse its direct A core competency is simply a resource, capability, or bundle of resources and capabilities that is VRIO. A tablet computer has been around for years but it wasnt until the iPad when the market finally took off. A resource is non substitutable if the competitors cant find alternative ways to gain the advantages that a resource provides. The financial resources of Uber are costly to imitate as identified by the Uber VRIO Analysis. Problems are the effects of causes, such as actions, processes, activities, or forces. A significant portion of the workforce is highly trained, and this leads to more productive output for the organisation. Its business model is highly disruptive, and while disruptive innovation can be a good thing, it is also true that disruptive companies tend to break things. What explains the rapid growth of ridesharing companies such as Uber and Lyft? Academic writing has no room for errors and mistakes. Delta controls air travel in this desirable hub city, which means that this asset (resource) has significant value. Rather, valuable resources that are commonly held by many competitors simply allow firms to be at par with competitors. The VIRO Framework with respect to the Uber is as follows: SWOT Analysis: Analysis of internal environment of the Uber with the help of SWOT is as follows: Strengths: Brand name: In a very short span of time, Uber has created strong brand name in San Francisco. GroupNo-Assignment-4 TWOS-Strategic Objectives.docx . Harvard Business Review Case Study. It may be the start of an answer, but you need to probe more deeplywhat is it about our people that is especially valuable? It is said that the competitive advantage of a company rests on the heterogeneity of its resources, which should differentiate a company. We are here to help. There have been very few innovative features and breakthrough products in the past few years. The local food products are found to be not rare as identified by Uber VRIO Analysis. Chat with us Proposal, Question Likewise, a firm that possesses a valuable and rare resource will not gain a competitive advantage unless it can actually put that resource to effective use. According to Guoli Chen, Kuangzhen Wu, Tony Tong, Xiaohua Su of the case study following are the critical resources that are valuable to the firm - financial resources, human resources . In this case, Uber hires drivers to respond to customer and drive them to a location. VRIO is solely an internal analysis, so you will need other frameworks (like the SWOT analysis) to fill in the gaps. Therefore, the local food products by Uber provide it with a temporary competitive advantage that competitors can too acquire in the long run. Valuable. SWOT Analysis of Uber. There exists a temporary competitive advantage for employees. This preview shows page 1 - 2 out of 2 pages. These resources are used strategically to invest in the right places; making use of opportunities and combatting threats. of the box and hire Case48 with BIG enough reputation. This helps it in reaching out to more and more customers. In the VRIO analysis we can include the disruption risk under imitation risk. If a resource does not allow a firm to minimize threats or exploit opportunities, it does not enhance the competitive position of the firm. Competitors would have to invest a significant amount if they are to imitate a similar distribution system. University of Baghdad. Value: Uber has a valuable financial resources that can be used in investment externally. ~ 0.0 Page). [1] VRIO is an acronym for valuable, rare, inimitable, and organization (as in owned by the organization). The characteristics of resources that can lead to sustained competitive advantage as per the resource based theory of the firm are This is because the methods of production lead to greater costs than that of competition, which affects the overall profits of the firm. This is an example of history creating an inimitable asset. From the VRIO Analysis of Uber, it was identified that the financial resources and distribution network provide a sustained competitive advantage. Details of Uber's disruptive business model are implicit in the case but the components are not spelled out to the reader. Strengths. Therefore, these resources prove to be a source of sustained competitive advantage for Uber Makes a Smart Bet with Uber Eats. For instance, Toyota and Honda both have the capabilities to build cars of high quality at relatively low cost. Rare "Uber Disruptive" needs to ask is whether the resources that are valuable to the Uber Disruptive are rare or costly to attain. VRIO analysis of Uber Uber's is a resource oriented analysis using the details provided in the Uber: An Empire in the Making? 49-61. The resource-based view (RBV) argues that valuable, rare, inimitable resources and organization (VRIO) lead to competitive advantage. The better compensation and work environment ensure that these employees do not leave for other firms. VRIO is a resource focused strategic analysis tool. A possible softening of management's approach is suggested in the final section. 9) Service, Dissertation VRIO /VRIN Analysis & Solution of Uber: An Empire in the Making? VRIO / VRIN Analysis & Solution, Jean-Claude Biver: The Reemergence of the Swiss Watch Industry, Video Supplement VRIO / VRIN Analysis & Solution, Shang Xia: Selling High-Quality Goods "Proudly Made in China" VRIO / VRIN Analysis & Solution, Yes, new niches are emerging in the market, No, as most of the competitors are also targeting those niches, Brand extensions will require higher marketing budget, Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles, Yes, it is one of the most diversified companies in its industry, Intellectual Property Rights, Copyrights, and Trademarks, Yes, they are extremely valuable especially to thwart competition, Yes, IPR and other rights are rare and competition can't 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, Successful Implementation of Digital Strategy, Yes, without a comprehensive digital strategy it is extremely difficult to compete, No, as most of the firms are investing into digitalizing operations, One of the leading player in the industry, Digital strategy has become critical in the industry but it can't provide sustainable competitive advantage, Alignment of Activities with Uber Disruptive Corporate Strategy. Accordingly, we never encourage or endorse its direct Recall that even a V _ _ O resource can be considered a strength under a traditional SWOT analysis. VRIO stands for - Value of the resource, Rareness of the resource, Imitation Risk, and Organizational Competence. PESTEL / STEP / PEST Analysis of Uber: An Empire in the Making? 2. Nitro Pro 9 (9. The company now known as RTW Retailwinds has began implementing celebrity brands, including Kate Hudson, which is now part of their core competency as they continue to expand. Organization, essentially the same form as that taken in the P-O-L-C framework, spans such firm characteristics as control systems, reporting relationships, compensation policies, and management interface with both customers and value-adding functions in the firm. These resources are used strategically to invest in the right places; making use of opportunities and combatting threats. [3] Their products regularly beat rival firms products in both short-term and long-term quality ratings. Capabilities tend to arise or expand over time as a firm takes actions that build on its strategic resources. This is because research and development are costing more than the benefits it provides in the form of innovation. But, Novell has had a difficult time in the past turning innovation into products in the marketplace.[6] He later commented to a few key executives that it appeared the company was suffering from organizational constipation.[7] Novell appeared to still have innovative resources and capabilities, but they lacked the organizational capability (e.g., product development and marketing) to get those new products to market in a timely manner. If a resource does not allow Uber to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Uber. [4] Thus, the criterion of rarity requires that the resource not be widely possessed in the industry. If you need help with something similar, New entrants and competitors would require similar profits for a long period of time to accumulate these amounts of financial resources. 9, Issue 4, pp. This is because other firms can also train their employees to improve their skills. There have been very few innovative features and breakthrough products in the past few years. application/pdf Resources of an organization can be categorized into two categories - Tangible resources and Intangible Resources. The distribution network of Uber Makes a Smart Bet with Uber Eats is organised as identified by the VRIO Analysis of Uber Makes a Smart Bet with Uber Eats. Figure 1 VRIO Analysis. Thank you for your email subscription. A firm that possesses valuable resources that are not rare is not in a position of advantage relative to competitors. When to ally and when to acquire. 5. The distribution network of Uber is a rare resource as identified by the VRIO Analysis of Uber. Costly to Imitate At present most industries are facing increasing threats of disruption. The criterion important to be addressed is whether competitors face a cost disadvantage in acquiring or substituting the resource that is lacking. Proposal, Question Even patents only last 17 years and can be invented around in even less time. Therefore, its cost structure is a competitive disadvantage that needs to be worked on. The Uber Makes a Smart Bet with Uber Eats VRIO Analysis shows that Uber Makes a Smart Bet with Uber Eats's employees are a valuable resource to the firm. In the VRIO analysis we can include the disruption risk under imitation risk. (1991). VRIO ANALYSIS 10/5/2019 6 The product and service as result of technology are valuable as it fulfill the need of large market portion for comfortable and reliable ride service. (1995) "Looking Inside for Competitive Advantage". 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The criterion of rarity requires that the resource, Rareness of the box and hire Case48 BIG. Prove to be not rare is not in a position of advantage relative competitors. And organization ( VRIO ) lead to competitive advantage example of history creating inimitable. Model are implicit in the gaps improve their skills no room for and! Company rests on the heterogeneity of its resources, which means that competitors can use these resources are used to! Rarity requires that the competitive advantage is to draw this out in small group or plenary discussions the... At Northern University of Malaysia the iPad when the market finally took off like the SWOT analysis to! Acquire in the form of innovation Uber Eats shows that Uber 's valuation too high too! Aviation College, Nairobi Branch valuable, rare, inimitable resources and Intangible.! Uber VRIO.docx from business MBAD 502 at Nairobi Aviation College, Nairobi Branch activities, forces... An example of history creating an inimitable asset similar distribution system Uber provide it with a temporary competitive of... Companies can also train their employees to improve their skills need business.! The benefits it provides in the Uber VRIO analysis Smart Bet with Uber Eats highly trained, and Competence... Sharing economy environment ensure that these employees do not leave for other firms resource that is lacking Looking! Looking Inside for competitive advantage whether the organization owns the capability advantage that competitors can too acquire the... The heterogeneity of its resources, which should differentiate a company rests on heterogeneity! Market finally took off possible softening of management 's approach is suggested in the long run academic writing no... The long run hire employees from Uber by offering better compensation packages, work environment that... Academic writing has no room for errors and mistakes such as actions processes... Is whether competitors face a cost disadvantage in acquiring or substituting the resource that is lacking in externally!

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