Sears 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 Sears Holdings to do better resource allocation and build a defensible value and supply chain.

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What is a Valuable Resource for Sears Holdings? Defining Valuable in VRIO

A resource or capability is considered valuable for Sears Holdings , if it allows the Sears 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 Sears Holdings to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Sears Holdings.

What are Rare Resources for Sears Holdings? Defining Rare in VRIO

In an industry that Sears Holdings operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Sears Holdings require rare resources to compete in the industry. If Sears Holdings don’t have rare resources that are required to succeed in the industry then Sears Holdings won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Sears 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 Sears Holdings? Defining Inimitable in VRIO

A valuable and rare resource can provide a competitive advantage to Sears 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. Sears 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 Sears Holdings

What is a Organization for Sears Holdings? Defining Organization in VRIO

Even if the Sears 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 Sears 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
Opportunities in the Adjacent Industries that Sears 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
Talent to Manage Regulatory and Legal Obligations	Yes	No	Can be imitated by competitors	Yes	Not critical factor
Successful Implementation of Digital Strategy at Sears Holdings	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
Access to Cheap Capital for Sears Holdings	Yes, as a leading player in the industry and current macro economic conditions, Sears Holdings has access to cheap capital	No	Can be imitated by the competitors of Sears Holdings	Not been totally exploited	Not significant in creating competitive advantage
Distribution and Logistics Costs Competitiveness	Yes, as it helps Sears Holdings in delivering lower costs	No	Can be imitated by competitors of Sears Holdings but it is difficult	Yes	Medium to Long Term Competitive Advantage
Access to Critical Raw Material for Successful Execution	Yes	Yes, as other competitors have to come to terms with Sears Holdings dominant market position	Can be imitated by competitors	Yes	Providing Sustainable Competitive Advantage
Intellectual Property Rights, Copyrights, and Trademarks	Yes, they are extremely valuable for Sears Holdings to thwart competition	Yes, IPR and other rights are rare and competition of Sears 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
Financial Resources of Sears Holdings	Yes	No	Financial instruments and market liquidity are available to all the nearest competitors	Sears Holdings has reasonably sound financial position	Sears Holdings has relatively sustainable Competitive Advantage
Customer Community of Sears Holdings	Yes, as customers are co-creating products	Yes, the Sears Holdings has able to build a special relationship with its customers	It is very difficult for Sears Holdings competitors to imitate the culture and community dedication	Going by the data, there is still a lot of upside in building on Sears Holdings customers community ecosystem	Providing Strong Competitive Advantage
Vision of the Leadership for Next Set of Challenges	Yes	No	Can't be imitated by competitors of Sears Holdings	Not based on information provided in the case	Can Lead to Strong Competitive Advantage
Opportunities in the E-Commerce Space for Sears Holdings - using Present IT Capabilities	Yes, the e-commerce space is rapidly growing and Sears 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
Marketing Expertise within Sears 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 Sears Holdings are often matched by competitors	Yes, Sears Holdings is leveraging both its inhouse marketing department and external expertise	Temporary Competitive Advantage
Track Record of Leadership Team at Sears Holdings	Yes	Yes	Can't be imitated by competitors	Yes	Providing Strong Competitive Advantage
Alignment of Activities with Sears 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

Sears 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