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JD.com 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 JD.com to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for JD.com? Defining Valuable in VRIO
A resource or capability is considered valuable for JD.com , if it allows the
JD.com to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow JD.com to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for JD.com.
What are Rare Resources for JD.com? Defining Rare in VRIO
In an industry that JD.com operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. JD.com require rare resources to compete in the industry. If JD.com don’t have rare resources that are required to succeed in the industry then JD.com won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide JD.com competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for JD.com? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to JD.com 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. JD.com 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 JD.com
What is a Organization for JD.com? Defining Organization in VRIO
Even if the JD.com 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 JD.com 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 |
---|---|---|---|---|---|
Global and Local Presence of JD.com | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of JD.com but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Access to Cheap Capital for JD.com | Yes, as a leading player in the industry and current macro economic conditions, JD.com has access to cheap capital | No | Can be imitated by the competitors of JD.com | Not been totally exploited | Not significant in creating competitive advantage |
Opportunities in the E-Commerce Space for JD.com - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and JD.com 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 |
Track Record of Project Execution | Yes, especially in an industry where there are frequent cost overun | Yes, especially in the segment that JD.com operates in | No, none of the competitors so far has able to imitate this expertise | Yes, JD.com is successful at it | Providing Strong Competitive Advantage |
Product Portfolio and Synergy among Various Product Lines of JD.com | 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 |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for JD.com to thwart competition | Yes, IPR and other rights are rare and competition of JD.com 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 |
Pricing Strategies of JD.com | Yes, JD.com has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide JD.com with a Temporary Competitive Advantage |
Ability to Attract Talent in Various Local & Global Markets | Yes, JD.com 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 JD.com | To a large extent yes | Providing Strong Competitive Advantage |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of JD.com | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Position among Retailers and Wholesalers – JD.com retail strategy | Yes, JD.com has strong relationship with retailers and wholesalers | Yes, JD.com has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Track Record of Leadership Team at JD.com | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Customer Community of JD.com | Yes, as customers are co-creating products | Yes, the JD.com has able to build a special relationship with its customers | It is very difficult for JD.com competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on JD.com customers community ecosystem | Providing Strong Competitive Advantage |
JD.com 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 JD.com | JD.com is leveraging the customer loyalty to good effect | Provide JD.com medium term competitive advantage |
Successful Implementation of Digital Strategy at JD.com | Yes, without a comprehensive digital strategy it is extremely difficult to compete | No, as most of the firms are investing into digitalizing operations | Can be imitated by competitors | One of the leading player in the industry | Digital strategy has become critical in the industry but it can't provide sustainable competitive advantage to |
JD.com 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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