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adidas 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 adidas to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for adidas? Defining Valuable in VRIO
A resource or capability is considered valuable for adidas , if it allows the
adidas to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow adidas to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for adidas.
What are Rare Resources for adidas? Defining Rare in VRIO
In an industry that adidas operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. adidas require rare resources to compete in the industry. If adidas don’t have rare resources that are required to succeed in the industry then adidas won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide adidas competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for adidas? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to adidas 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. adidas 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 adidas
What is a Organization for adidas? Defining Organization in VRIO
Even if the adidas 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 adidas 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 |
---|---|---|---|---|---|
Brand Positioning of adidas in Comparison to the Competitors | Yes | No | Can be imitated by competitors but it will require big marketing budget | Yes, the firm has positioned its brands based on consumer behavior | Temporary Competitive Advantage |
Track Record of Project Execution | Yes, especially in an industry where there are frequent cost overun | Yes, especially in the segment that adidas operates in | No, none of the competitors so far has able to imitate this expertise | Yes, adidas is successful at it | Providing Strong Competitive Advantage |
adidas 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 adidas | adidas is leveraging the customer loyalty to good effect | Provide adidas medium term competitive advantage |
Position among Retailers and Wholesalers – adidas retail strategy | Yes, adidas has strong relationship with retailers and wholesalers | Yes, adidas has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Customer Community of adidas | Yes, as customers are co-creating products | Yes, the adidas has able to build a special relationship with its customers | It is very difficult for adidas competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on adidas customers community ecosystem | Providing Strong Competitive Advantage |
Track Record of Leadership Team at adidas | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Opportunities for Brand Extensions for adidas products | Yes, new niches are emerging in the market | No, as most of the competitors are also targeting those niches | Yes can be imitated by the competitors | Brand extensions will require higher marketing budget | Temporary Competitive Advantage |
Brand awareness of adidas products and services | Yes, the brand awareness of adidas products are high | Yes, adidas has one of the leading brand in the industry | No | adidas has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Distribution and Logistics Costs Competitiveness | Yes, as it helps adidas in delivering lower costs | No | Can be imitated by competitors of adidas but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of adidas | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with adidas dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Product Portfolio and Synergy among Various Product Lines of adidas | 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 |
Alignment of Activities with adidas 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 |
adidas 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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