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

Order a Danone VRIO / VRIN Analysis now

What is a Valuable Resource for Danone? Defining Valuable in VRIO

A resource or capability is considered valuable for Danone , if it allows the Danone to exploit opportunities or negate threats emerging out of both the micro business environment and the macro environment. If a resource does not allow Danone to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Danone.

What are Rare Resources for Danone? Defining Rare in VRIO

In an industry that Danone operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Danone require rare resources to compete in the industry. If Danone don’t have rare resources that are required to succeed in the industry then Danone won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Danone competitive advantage against players that don’t have those rare resources. HBR Case Study Solution

What is a Inimitable (Difficult to Immitate) Resource for Danone? Defining Inimitable in VRIO

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

What is a Organization for Danone? Defining Organization in VRIO

Even if the Danone 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 Danone 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
Supply Chain Network Flexibility of Danone	Yes	Yes	Near competitors also have flexible supply chain and share some of the suppliers	Fully utilized by Danone organizational structure and capabilities	Keeps the business running
Danone 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 Danone	Danone is leveraging the customer loyalty to good effect	Provide Danone medium term competitive advantage
Financial Resources of Danone	Yes	No	Financial instruments and market liquidity are available to all the nearest competitors	Danone has reasonably sound financial position	Danone has relatively sustainable Competitive Advantage
Customer Community of Danone	Yes, as customers are co-creating products	Yes, the Danone has able to build a special relationship with its customers	It is very difficult for Danone competitors to imitate the culture and community dedication	Going by the data, there is still a lot of upside in building on Danone customers community ecosystem	Providing Strong Competitive Advantage
Successful Implementation of Digital Strategy at Danone	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
Sales Force and Channel Management of Danone	Yes	No	Can be imitated by competitors	Still there is lot of potential to utilize the excellent sales force	Can provide Danone sustainable competitive advantage. Potential is certainly there.
Talent to Manage Regulatory and Legal Obligations	Yes	No	Can be imitated by competitors	Yes	Not critical factor
Intellectual Property Rights, Copyrights, and Trademarks	Yes, they are extremely valuable for Danone to thwart competition	Yes, IPR and other rights are rare and competition of Danone 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
Position among Retailers and Wholesalers – Danone retail strategy	Yes, Danone has strong relationship with retailers and wholesalers	Yes, Danone has dedicated channel partners	Difficult to imitate though not impossible	Yes, over the years company has used it successfully	Sustainable Competitive Advantage
Marketing Expertise within Danone	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 Danone are often matched by competitors	Yes, Danone is leveraging both its inhouse marketing department and external expertise	Temporary Competitive Advantage
Alignment of Activities with Danone 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
Access to Cheap Capital for Danone	Yes, as a leading player in the industry and current macro economic conditions, Danone has access to cheap capital	No	Can be imitated by the competitors of Danone	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 Danone dominant market position	Can be imitated by competitors	Yes	Providing Sustainable Competitive Advantage
Track Record of Leadership Team at Danone	Yes	Yes	Can't be imitated by competitors	Yes	Providing Strong Competitive Advantage

Danone 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