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Huggies 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 Huggies to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Huggies? Defining Valuable in VRIO
A resource or capability is considered valuable for Huggies , if it allows the
Huggies to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Huggies to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Huggies.
What are Rare Resources for Huggies? Defining Rare in VRIO
In an industry that Huggies operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Huggies require rare resources to compete in the industry. If Huggies don’t have rare resources that are required to succeed in the industry then Huggies won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Huggies competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Huggies? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Huggies 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. Huggies 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 Huggies
What is a Organization for Huggies? Defining Organization in VRIO
Even if the Huggies 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 Huggies 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 |
---|---|---|---|---|---|
Alignment of Activities with Huggies 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 |
Sales Force and Channel Management of Huggies | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide Huggies sustainable competitive advantage. Potential is certainly there. |
Successful Implementation of Digital Strategy at Huggies | 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 |
Supply Chain Network Flexibility of Huggies | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Huggies organizational structure and capabilities | Keeps the business running |
Global and Local Presence of Huggies | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Huggies but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Huggies 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 Huggies | Huggies is leveraging the customer loyalty to good effect | Provide Huggies medium term competitive advantage |
Pricing Strategies of Huggies | Yes, Huggies has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Huggies with a Temporary Competitive Advantage |
Position among Retailers and Wholesalers – Huggies retail strategy | Yes, Huggies has strong relationship with retailers and wholesalers | Yes, Huggies 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 Huggies dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Product Portfolio and Synergy among Various Product Lines of Huggies | 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 |
Customer Community of Huggies | Yes, as customers are co-creating products | Yes, the Huggies has able to build a special relationship with its customers | It is very difficult for Huggies competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Huggies customers community ecosystem | Providing Strong Competitive Advantage |
Access to Cheap Capital for Huggies | Yes, as a leading player in the industry and current macro economic conditions, Huggies has access to cheap capital | No | Can be imitated by the competitors of Huggies | Not been totally exploited | Not significant in creating competitive advantage |
Opportunities in the E-Commerce Space for Huggies - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Huggies 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 |
Opportunities for Brand Extensions for Huggies 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 |
Huggies 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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