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Macy's 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 Macy's to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Macy's? Defining Valuable in VRIO
A resource or capability is considered valuable for Macy's , if it allows the
Macy's to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Macy's to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Macy's.
What are Rare Resources for Macy's? Defining Rare in VRIO
In an industry that Macy's operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Macy's require rare resources to compete in the industry. If Macy's don’t have rare resources that are required to succeed in the industry then Macy's won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Macy's competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Macy's? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Macy's 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. Macy's 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 Macy's
What is a Organization for Macy's? Defining Organization in VRIO
Even if the Macy's 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 Macy's 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 |
---|---|---|---|---|---|
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of Macy's | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Product Portfolio and Synergy among Various Product Lines of Macy's | 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 |
Ability to Attract Talent in Various Local & Global Markets | Yes, Macy's 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 Macy's | To a large extent yes | Providing Strong Competitive Advantage |
Access to Cheap Capital for Macy's | Yes, as a leading player in the industry and current macro economic conditions, Macy's has access to cheap capital | No | Can be imitated by the competitors of Macy's | Not been totally exploited | Not significant in creating competitive advantage |
Sales Force and Channel Management of Macy's | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide Macy's sustainable competitive advantage. Potential is certainly there. |
Global and Local Presence of Macy's | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Macy's but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Macy's 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 Macy's | Macy's is leveraging the customer loyalty to good effect | Provide Macy's medium term competitive advantage |
Opportunities in the E-Commerce Space for Macy's - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Macy's 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 |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for Macy's to thwart competition | Yes, IPR and other rights are rare and competition of Macy's 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 |
Customer Community of Macy's | Yes, as customers are co-creating products | Yes, the Macy's has able to build a special relationship with its customers | It is very difficult for Macy's competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Macy's customers community ecosystem | Providing Strong Competitive Advantage |
Financial Resources of Macy's | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Macy's has reasonably sound financial position | Macy's has relatively sustainable Competitive Advantage |
Supply Chain Network Flexibility of Macy's | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Macy's organizational structure and capabilities | Keeps the business running |
Alignment of Activities with Macy's 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 |
Brand Positioning of Macy's 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 |
Macy's 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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