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Domino's Pizza 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 Domino's Pizza to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Domino's Pizza? Defining Valuable in VRIO
A resource or capability is considered valuable for Domino's Pizza , if it allows the
Domino's Pizza to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Domino's Pizza to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Domino's Pizza.
What are Rare Resources for Domino's Pizza? Defining Rare in VRIO
In an industry that Domino's Pizza operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Domino's Pizza require rare resources to compete in the industry. If Domino's Pizza don’t have rare resources that are required to succeed in the industry then Domino's Pizza won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Domino's Pizza competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Domino's Pizza? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Domino's Pizza 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. Domino's Pizza 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 Domino's Pizza
What is a Organization for Domino's Pizza? Defining Organization in VRIO
Even if the Domino's Pizza 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 Domino's Pizza 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 |
---|---|---|---|---|---|
Pricing Strategies of Domino's Pizza | Yes, Domino's Pizza has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Domino's Pizza with a Temporary Competitive Advantage |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of Domino's Pizza | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Product Portfolio and Synergy among Various Product Lines of Domino's Pizza | 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 |
Domino's Pizza 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 Domino's Pizza | Domino's Pizza is leveraging the customer loyalty to good effect | Provide Domino's Pizza medium term competitive advantage |
Global and Local Presence of Domino's Pizza | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Domino's Pizza but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with Domino's Pizza dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Successful Implementation of Digital Strategy at Domino's Pizza | 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 |
Opportunities in the Adjacent Industries that Domino's Pizza 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 |
Sales Force and Channel Management of Domino's Pizza | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide Domino's Pizza sustainable competitive advantage. Potential is certainly there. |
Financial Resources of Domino's Pizza | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Domino's Pizza has reasonably sound financial position | Domino's Pizza has relatively sustainable Competitive Advantage |
Ability to Attract Talent in Various Local & Global Markets | Yes, Domino's Pizza 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 Domino's Pizza | To a large extent yes | Providing Strong Competitive Advantage |
Access to Cheap Capital for Domino's Pizza | Yes, as a leading player in the industry and current macro economic conditions, Domino's Pizza has access to cheap capital | No | Can be imitated by the competitors of Domino's Pizza | Not been totally exploited | Not significant in creating competitive advantage |
Customer Community of Domino's Pizza | Yes, as customers are co-creating products | Yes, the Domino's Pizza has able to build a special relationship with its customers | It is very difficult for Domino's Pizza competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Domino's Pizza customers community ecosystem | Providing Strong Competitive Advantage |
Position among Retailers and Wholesalers – Domino's Pizza retail strategy | Yes, Domino's Pizza has strong relationship with retailers and wholesalers | Yes, Domino's Pizza has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Domino's Pizza 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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