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Walmart 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 Walmart to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Walmart? Defining Valuable in VRIO
A resource or capability is considered valuable for Walmart , if it allows the
Walmart to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Walmart to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Walmart.
What are Rare Resources for Walmart? Defining Rare in VRIO
In an industry that Walmart operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Walmart require rare resources to compete in the industry. If Walmart don’t have rare resources that are required to succeed in the industry then Walmart won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Walmart competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Walmart? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Walmart 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. Walmart 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 Walmart
What is a Organization for Walmart? Defining Organization in VRIO
Even if the Walmart 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 Walmart 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 |
---|---|---|---|---|---|
Access to Cheap Capital for Walmart | Yes, as a leading player in the industry and current macro economic conditions, Walmart has access to cheap capital | No | Can be imitated by the competitors of Walmart | 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 Walmart dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Track Record of Leadership Team at Walmart | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Position among Retailers and Wholesalers – Walmart retail strategy | Yes, Walmart has strong relationship with retailers and wholesalers | Yes, Walmart has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Walmart in delivering lower costs | No | Can be imitated by competitors of Walmart but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Product Portfolio and Synergy among Various Product Lines of Walmart | Yes, it is valuable in the industry given the various segmentations & consumer preferences. | Most of the competitors are trying to enter the lucrative segments | Can be imitated by the competitors | The firm has used it to good effect, details can be found in case exhibit | Provide short term competitive advantage but requires constant innovation to sustain |
Brand awareness of Walmart products and services | Yes, the brand awareness of Walmart products are high | Yes, Walmart has one of the leading brand in the industry | No | Walmart has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Financial Resources of Walmart | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Walmart has reasonably sound financial position | Walmart has relatively sustainable Competitive Advantage |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for Walmart to thwart competition | Yes, IPR and other rights are rare and competition of Walmart 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 |
Track Record of Project Execution | Yes, especially in an industry where there are frequent cost overun | Yes, especially in the segment that Walmart operates in | No, none of the competitors so far has able to imitate this expertise | Yes, Walmart is successful at it | Providing Strong Competitive Advantage |
Opportunities in the Adjacent Industries that Walmart 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 |
Alignment of Activities with Walmart 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 E-Commerce Space for Walmart - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Walmart 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 |
Walmart 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 Walmart | Walmart is leveraging the customer loyalty to good effect | Provide Walmart medium term competitive advantage |
Walmart 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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