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Clinique 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 Clinique to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Clinique? Defining Valuable in VRIO
A resource or capability is considered valuable for Clinique , if it allows the
Clinique to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Clinique to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Clinique.
What are Rare Resources for Clinique? Defining Rare in VRIO
In an industry that Clinique operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Clinique require rare resources to compete in the industry. If Clinique don’t have rare resources that are required to succeed in the industry then Clinique won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Clinique competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Clinique? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Clinique 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. Clinique 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 Clinique
What is a Organization for Clinique? Defining Organization in VRIO
Even if the Clinique 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 Clinique 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 for Brand Extensions for Clinique 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 |
Supply Chain Network Flexibility of Clinique | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Clinique organizational structure and capabilities | Keeps the business running |
Financial Resources of Clinique | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Clinique has reasonably sound financial position | Clinique has relatively sustainable Competitive Advantage |
Successful Implementation of Digital Strategy at Clinique | 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 |
Brand awareness of Clinique products and services | Yes, the brand awareness of Clinique products are high | Yes, Clinique has one of the leading brand in the industry | No | Clinique has utilized its leading brand position in various segments | 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 Clinique operates in | No, none of the competitors so far has able to imitate this expertise | Yes, Clinique is successful at it | Providing Strong Competitive Advantage |
Position among Retailers and Wholesalers – Clinique retail strategy | Yes, Clinique has strong relationship with retailers and wholesalers | Yes, Clinique has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with Clinique dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Opportunities in the Adjacent Industries that Clinique 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 |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for Clinique to thwart competition | Yes, IPR and other rights are rare and competition of Clinique 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 |
Ability to Attract Talent in Various Local & Global Markets | Yes, Clinique 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 Clinique | To a large extent yes | Providing Strong Competitive Advantage |
Access to Cheap Capital for Clinique | Yes, as a leading player in the industry and current macro economic conditions, Clinique has access to cheap capital | No | Can be imitated by the competitors of Clinique | Not been totally exploited | Not significant in creating competitive advantage |
Sales Force and Channel Management of Clinique | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide Clinique sustainable competitive advantage. Potential is certainly there. |
Customer Community of Clinique | Yes, as customers are co-creating products | Yes, the Clinique has able to build a special relationship with its customers | It is very difficult for Clinique competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Clinique customers community ecosystem | Providing Strong Competitive Advantage |
Clinique 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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