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Neutrogena 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 Neutrogena to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Neutrogena? Defining Valuable in VRIO
A resource or capability is considered valuable for Neutrogena , if it allows the
Neutrogena to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Neutrogena to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Neutrogena.
What are Rare Resources for Neutrogena? Defining Rare in VRIO
In an industry that Neutrogena operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Neutrogena require rare resources to compete in the industry. If Neutrogena don’t have rare resources that are required to succeed in the industry then Neutrogena won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Neutrogena competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Neutrogena? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Neutrogena 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. Neutrogena 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 Neutrogena
What is a Organization for Neutrogena? Defining Organization in VRIO
Even if the Neutrogena 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 Neutrogena 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 Neutrogena 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 |
Alignment of Activities with Neutrogena 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 |
Product Portfolio and Synergy among Various Product Lines of Neutrogena | 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 |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for Neutrogena to thwart competition | Yes, IPR and other rights are rare and competition of Neutrogena 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 |
Pricing Strategies of Neutrogena | Yes, Neutrogena has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Neutrogena with a Temporary Competitive Advantage |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Neutrogena in delivering lower costs | No | Can be imitated by competitors of Neutrogena 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 Neutrogena | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Global and Local Presence of Neutrogena | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Neutrogena but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Supply Chain Network Flexibility of Neutrogena | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Neutrogena organizational structure and capabilities | Keeps the business running |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Ability to Attract Talent in Various Local & Global Markets | Yes, Neutrogena 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 Neutrogena | To a large extent yes | Providing Strong Competitive Advantage |
Position among Retailers and Wholesalers – Neutrogena retail strategy | Yes, Neutrogena has strong relationship with retailers and wholesalers | Yes, Neutrogena has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Brand awareness of Neutrogena products and services | Yes, the brand awareness of Neutrogena products are high | Yes, Neutrogena has one of the leading brand in the industry | No | Neutrogena has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with Neutrogena dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Neutrogena 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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