Question

Complete the following VRIO exercise for Verizon Wireless

SUSTAINABLE COMPETITIVE ADVANTAGE CRITERIA (chapter 4 and lecture VRIO)

14. Valuable (creating value for customer)
14. Rare (if everybody’s doing it…)
14. Imperfectly imitable (not easily copied)
14. Organization (is the firm able to exploit the resource)

Determine what you believe to be the firm’s basis for competitive advantage (extraordinary resources/capabilities). These should come from your internal analysis of the firm and the value chain analysis:

1.

2.

3.

4.

Use the VRIO method to determine the sustainability of the resource/capability:

Evaluation of Resources and Capabilities
Resource/Capabilitiy	Valuable	Rare	Difficult to imitate, substitute or trade	Organized to Capture Value
1.
2.
3.
4.

Determine what you believe to be Verizon’s sustainable competitive advantage:

Answer 1

Verizon Wireless

Porter’s Value Chain Analysis

Value chain analysis has been divided into two parts:

1. Primary Activities that include

1. Inbound Logistics
2. Operations
3. Outbound Logistics
4. Marketing and Sales
5. Services

2. Support Activities that include

1. Firm Infrastructure
2. Human Resource Management
3. Technology Development
4. Procurement

Verizon’s primary activities include obtaining and storage of storage of equipment (macro and micro level) at the warehouses, fabrication and production, receiving purchase orders and preparing the orders ready for supply and distribution, making the finished products available at the retail outlets for buying and consumption. Being a telecom service provider, it is already rendering services to large number of customers by maximum coverage of areas under the telecommunication network. It also works hard toward providing excellent customer service and network service.

Verizon’s support activities include

1. Firm infrastructure that supports the design of process and space, presence of infrastructure at strategic locations identified in marketing mix, blueprint of the facility that promotes mobility of network technologies.
2. Human Resource Management that takes care of selection, recruitment and training the employees. Along with that HRM helps in creating an inclusive and diverse work environment to motivate the employees. Being a technology service provider, perfect resource mapping as per the technology needs is very important task for the HRM. Training the employees with the right kind of skill sets and technology know how is the key to success for telecom brand Verizon.
3. Technology Development- Verizon continuously upgrades its technology portfolio that presently includes 5G, Internet of Things, Managed Security and other innovation programs.
4. Procurement- The primary activities of inbound logistics, operations, outbound logistics and marketing are supported by procurement.

Internal Analysis of Verizon

Strengths

1. Largest wireless telecom brand in the US
2. Innovative business model as per the customer’s feedback and demand for data.
3. Excellent collaboration between the SBUs.
4. High brand equity

From the value chain analysis and internal analysis the following could form the firm’s basis for competitive advantage.

1. Business models offering best of technology services like fiber network cables that offer extremely high speed for data.
2. Operations that include supply chain management, managing reserves or inventory, optimum utilization of the firm or facility infrastructure, process scheduling and productivity evaluation.
3. Technology Development
4. High brand equity which leads to substantial market share

VRIO Method

Evaluation of Resources and Capabilities
Resource/Capability	Valuable	Rare	Difficult to imitate, substitute or trade	Organized to capture value	Extent of sustained competitive advantage
Strong national brand and presence	Yes	Yes	Yes	Yes	Achieved sustained competitive advantage
Operational Excellence	Yes	No	No	Yes	Achieved competitive consistency
Technology	Yes	Yes	No	Yes	Interim or transitory Competitive Advantage
Brand Equity	Yes	Yes	Yes	Yes	Sustained Competitive Advantage

Technology along with brand equity can be Verizon’s sustained competitive advantage the company is continuously striving to stay ahead in technology offerings related to its wireless telecom service which is adding up to the brand’s equity and market share.