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Red Bull 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 Red Bull to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Red Bull? Defining Valuable in VRIO
A resource or capability is considered valuable for Red Bull , if it allows the
Red Bull to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Red Bull to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Red Bull.
What are Rare Resources for Red Bull? Defining Rare in VRIO
In an industry that Red Bull operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Red Bull require rare resources to compete in the industry. If Red Bull don’t have rare resources that are required to succeed in the industry then Red Bull won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Red Bull competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Red Bull? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Red Bull 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. Red Bull 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 Red Bull
What is a Organization for Red Bull? Defining Organization in VRIO
Even if the Red Bull 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 Red Bull 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 |
---|---|---|---|---|---|
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Successful Implementation of Digital Strategy at Red Bull | 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 |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Red Bull in delivering lower costs | No | Can be imitated by competitors of Red Bull but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Supply Chain Network Flexibility of Red Bull | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Red Bull organizational structure and capabilities | Keeps the business running |
Opportunities in the E-Commerce Space for Red Bull - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Red Bull 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 |
Sales Force and Channel Management of Red Bull | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide Red Bull sustainable competitive advantage. Potential is certainly there. |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with Red Bull dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Position among Retailers and Wholesalers – Red Bull retail strategy | Yes, Red Bull has strong relationship with retailers and wholesalers | Yes, Red Bull has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Customer Community of Red Bull | Yes, as customers are co-creating products | Yes, the Red Bull has able to build a special relationship with its customers | It is very difficult for Red Bull competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Red Bull customers community ecosystem | Providing Strong Competitive Advantage |
Financial Resources of Red Bull | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Red Bull has reasonably sound financial position | Red Bull has relatively sustainable Competitive Advantage |
Brand Positioning of Red Bull 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 |
Marketing Expertise within Red Bull | 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 Red Bull are often matched by competitors | Yes, Red Bull is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Alignment of Activities with Red Bull 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 |
Pricing Strategies of Red Bull | Yes, Red Bull has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Red Bull with a Temporary Competitive Advantage |
Red Bull 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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